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TAAT Global Alternatives (CSE:TAAT / OTCQX:TOBAF), the manufacturer of a viable alternative to nicotine tobacco which seems to be taking the US by storm, has confirmed it is entering another US state.

TAAT Original, Smooth, and Menthol products are now carried by 19 tobacco retailers across the state of Illinois, complementing new launch initiatives on the east coast for Georgia, North Carolina, South Carolina, and Alabama, as well as ongoing launch efforts in the state of Ohio which began in Q4 2020.

TAAT now sold in over 300 stores across the US

As of this writing, TAAT’s products are sold in a total of more than 300 stores across the United States in addition to being sold online through e-commerce, with orders having been shipped to smokers aged 21+ in over 35 states since mid-February 2021.

Illinois was selected as the next market in which to launch TAAT for several strategic regions. In addition to a smoking incidence rate among adults of 15.5%1 which is above the national average of 14%, Illinois borders on Indiana (population 6.7 million, adult smoking incidence rate of 21.1%1) which also borders on Ohio, thus potentially allowing TAAT to build an initial presence in this state from its availability at retail in Ohio and Illinois.

This is important as TAAT is specifically targeting existing smokers who want to break their nicotine habits, rather than seeking new smokers. States with a large, existing population of smokers make the most sense for TAAT.

Moreover, as of May 2021, there were approximately 150% more sample pack requests on TryTAAT from smokers aged 21+ in Illinois than in Nevada, where TAAT’s operations are based.

Local sales expertise

TAAT says it has onboarded a local sales manager to cover Illinois who has several years of experience in tobacco sales with industry-leading firms to include Altria (manufacturer) and Eby-Brown (major tobacco wholesaler).

TAAT says it has identified a significant opportunity to capitalise on the high taxation rate of tobacco cigarettes in Cook County, Illinois. This county-level tax of USD $3.00 per pack is combined with Illinois’ state-level tax of USD $2.98 per pack, in addition to locality-level taxes in Chicago, Evanston, and Cicero (USD $1.18, USD $0.50, and USD $0.16, respectively).

As a result, the average tax-inclusive retail price of a pack of tobacco cigarettes in Illinois is USD $9.724, which is nearly 112% higher than the MSRP of TAAT in Illinois of USD $4.59 per pack. This is a significant advantage for TAAT which we identified in our early analysis of the company’s core product last year – namely that it does not sell tobacco, and its products are not taxed as tobacco.

Listen: Podcast with Setti Coscarella, CEO of TAAT Global Alternatives

Data confirms that cost is a factor in tobacco alternatives

In a study of over 1,200 smokers aged 21+ in Ohio, Michigan, Illinois, and Pennsylvania conducted by TAAT earlier this year, over 65% of respondents who indicated a desire to discontinue or cut down on smoking cited the financial burden of purchasing tobacco cigarettes as a reason they disliked smoking cigarettes.

TAAT Chief Executive Officer Setti Coscarella said: “The opportunity for TAAT in Illinois is significant as there are well over one million smokers aged 21+ in the state; many of whom reside in Cook County and are subjected to the highest tax burden in the nation when it comes to buying tobacco cigarettes. Right from the beginning, we have placed TAAT in 19 tobacco retailers across the state, which we intend to leverage along with existing online demand in Illinois to further penetrate this market.”

Coscarella explained that TAAT has conducted consumer research earlier this year with smokers aged 21+ in markets to include Illinois, and nearly two thirds of respondents who stated their desire to leave nicotine behind specified that the cost of smoking tobacco cigarettes was a contributing factor to this desire.

“We are pleased to be making a better alternative to tobacco cigarettes available at a price point that is less than half what the average pack of tobacco cigarettes costs in Ohio, as we broaden our initiatives to capture market share in the USD $814 billion global tobacco industry,” Coscarella explained.

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Please note this article does not constitute investment advice. Investors are encouraged to do their own research beforehand or consult a professional advisor.

Stuart Fieldhouse

Stuart Fieldhouse

Stuart Fieldhouse has spent 25 years in journalism and marketing, including as a wealth management editor for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong. He was the founder editor of The Hedge Fund Journal.

Stuart has worked at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Based in The Armchair Trader’s London office, Stuart continues to advise fund managers, private banks, family offices and other financial institutions.

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