Christina Lake Cannabis [CNSX: CLC] has signed a deal with TAAT Lifestyle & Wellness which will allow it become the distributor of TAAT’s proprietary Beyond Tobacco in the Canadian market.
Regular readers of The Armchair Trader will know that TAAT is already building a third path for smokers in the US who want to kick the habit, but have found nicotine patches and vaping inadequate.
TAAT’s Beyond Tobacco, which is being actively sold in Ohio and has now gone live for distribution across the USA, seeks to simulate the characteristics of a tobacco cigarette without the addictive qualities of nicotine. The company is already re-stocking distributors in Ohio which have sold out in a matter of weeks.
Christina Lake Cannabis has been granted the exclusive rights to distribute TAAT in Canada, for a two year renewable term. The deal represents a further feather in CLC’s cap and an important contributor to its underlying value. As Canadian law generally requires hemp products and derivatives to be produced, distributed, and sold through entities licensed by Health Canada, CLC’s status as a Licensed Producer under the Cannabis Act could enable TAAT to be produced and sold in the Canadian market, where the tobacco industry is valued at CAD $19.1 billion.
After TAAT was first announced in mid-2020, considerable interest was received from legal-aged Canadian smokers who appear to be drawn to the unique properties of TAAT as a tobacco-free and nicotine-free product, as well as its low price point compared to tobacco cigarettes (e.g., USD $3.99 for TAAT™ in Ohio vs approx. USD $7.00 for Marlboro).
“The Canadian environment for cannabis and hemp can be tricky to navigate, which creates barriers for players from outside of Canada when it comes to entering the market here,” explained Nicco Dehaan, COO at Christina Lake Cannabis. “We believe TAAT has created a novel product formulation which has clearly resonated well with smokers aged 21+ in the United States. Between our ability to develop and produce TAAT and its Beyond Tobacco base material for the Canadian market, as well as to distribute TAAT through authorized sales channels, I believe that we can unlock a lot of value for both CLC and TAAT as they work towards expanding into a new country for the first time.”
Some readers will be wondering whether there is scope for Christina Lake Cannabis to also source hemp for TAAT, as it is already an established cannabis grower in Canada with successful strains of cannabis suitable for non-greenhouse growing.
CLC’s inaugural harvest in 2020 yielded 32,500 kg / 71,650 lb of sun-grown cannabis, which is primarily being extracted to produce winterised cannabis oils and distillates for the Canadian market. Although CLC does not presently cultivate hemp, which would be used to produce Beyond Tobacco, CLC has sourced multiple local growers who can supply high quality, toxin-free hemp biomass which is suited to the ideal composition of Beyond Tobacco, the base material of TAAT products.
As TAAT™ continues its rollout in the United States, CLC tells us that it could capitalise upon this momentum to strategically place TAAT in authorised online retail and sales channels across Canada to capture the interest of legal-aged smokers who might desire a nicotine-free and tobacco-free alternative to tobacco cigarettes.