Shares in alternative tobacco specialist TAAT Lifestyle & Wellness Ltd. (CSE: TAAT) are up 44% year-to-date and the news flow from the nicotine-free cigarette maker continues to bear out investors’ positive view. TAAT only started selling its products in the US in December but the first few weeks of sales, for the moment only based in Ohio, showed a company on track to build a loyal following, and build it fairly quickly.
Around 60% of retailers involved in the initial sales have reordered at least once, some asking for bigger quantities than in the first batch and some buyers are already requesting the brand by name.
A new deal penned this week with Texas-based sales agency Crossmark will help the company expand across the US and into Canada. Crossmark sells across more than 100,000 retail shops in North America and will use its extensive promotional, trade marketing and analytics capabilities to drive US-wide sales growth.
TAAT is starting to focus on digital sales strategy
The nicotine-free cigarette maker is also focusing on online sales. By November nearly one third of all visitors to the TryTAAT landing page requested a sample pack of the nicotine-free hemp cigarettes, an exceptional conversion rate by industry standards. The planned TAAT online store is expected to accelerate the adoption of TAAT as a replacement for tobacco cigarettes.
While retail investors are only becoming aware of the alternative tobacco maker now, venture capital had already discovered the company late last year when a group of investors, including Debbie Chang, co-founder of Horizon Ventures, exercised almost 5m common share purchase warrants on TAAT at C$2.00 each. This provided the company with total gross proceeds of C$10m (£5.92m) which were then used to accelerate commercialisation efforts.
- Podcast: Setti Coscarella, TAAT Global Alternatives, on Q3 results and European expansion (4 days ago)
- TAAT Global Alternatives receives second round of C$10m from Horizon Ventures for Beyond Tobacco (5 days ago)
- TAAT’s third quarter numbers see massive growth in sales from US distribution (12 days ago)
The company is still relatively little known among investors but this began to change this week when shares rallied a walloping 50% in one day. The trigger? The stock made it onto the radar of Reddit trader and YouTuber Keith Gill, aka Roaring Kitty. When a Wall Street Journal interview with Gill carried a photograph showing an open notepad with TAAT on the list of stocks that Gill was looking at, shares rallied a stonking 50% on the day to $3.06. Since then they have settled back at $2.68 but TAAT stock is still up 44% since the start of the year and building on last year’s impressive rally of almost 120%.
TAAT is only just getting started. With its lifestyle and wellness approach to smoking aimed at existing smokers keen to replace nicotine and tobacco-based cigarettes with a healthier option it is well positioned to carve out its own space in the $814 billion global tobacco industry. The cigarettes are produced using proprietary base material called Beyond Tobacco, which undergoes a 14-step production process to include a patent-pending refinement technique that causes the material to have a taste and smell similar to actual tobacco.