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It has been a busy month for TAAT Lifestyle & Wellness (CSE:TAAT/FRA:2TP2), the manufacturer of an alternative to tobacco. The launch of the company’s online store successfully came off the ground, so much so that it managed to sell over CAD $50,000 worth of its alternative cigarettes in the first 48 hours of the online launch and over CAD$100,000 during its first weekend. These included its Original, Smooth and Menthol alternative cigarettes.

For a product that is unknown and has come to the market for the first time, this is exceptionally good. Orders placed through the online store have been shipped to 20 different US states with the average order value of just under $60. So far, the company has been selling its nicotine-free and tobacco-free cigarettes mainly in Ohio but is in the process of expanding this to US-wide retail sales.

In February it added new retail points of sale across Ohio, particularly in Cincinnati and Columbus, OH. Additionally, nationwide campaigns led by a consumer packaged goods sales agency that directly services over 100,000 convenience stores in the US have started this week and will now run concurrently with the TAAT online store.

Shares hit 7-year high after online sales start

Shares have hit a seven-year high ahead of the online launch last week to trade at 5.92 and although they have nudged lower in the last few days they still remain within reach of that level.

Online traffic was boosted by a targeted online advertising campaign that started earlier in February with advertisements using embedded promotional content on certain websites. As part of its plan to increase sales across the US the company raised its manufacturing rate by 233%.

“All of our initiatives for bringing TAAT to market in the United States are strategically coordinated and I believe that e-commerce plays a significant role,” said TAAT’s chief executive Setti Coscarella.

TAAT is positioning itself as an alternative to tobacco aimed at existing smokers, a market that came close to $1trn in value during 2020. The company’s first step is capturing a sizable share of the $100-plus billion US tobacco market, but further down the road plans to expand sales into Canada and Europe.

Given all of the health risks associated with smoking, a significant portion of the world’s 1.3bn tobacco users globally are looking for other smoking options, including tobacco and nicotine-free alternatives. The problem so far has been replicating the same taste as traditional cigarettes and TAAT has been able to overcome this issue using its proprietary Beyond Tobacco base material which undergoes a patented 14-step refining process to taste, smell and smoke like tobacco.

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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.

Vanya Dragomanovich

Vanya Dragomanovich

Vanya is an award-winning financial journalist who has worked in both television and newswires. She spent over 10 years at Dow Jones covering commodity markets, including metals, coffee, cocoa and oil. She also reported from the floor of the London Metals Exchange, and appeared on CNBC to discuss international metals markets. Since then she has written for several leading financial publications, including serving as commodities editor for FTSE Global Markets.

Vanya continues to cover international commodities markets globally, specialising in particular on metals and alternative energy. She is also the author of a book on CFD trading.

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