Big Tobacco Purchases Another E-Cig Company, Why It Matters

Japans largest tobacco company Japan Tobacco Inc. announced today that it has acquired U.S. e-cig company Logic technologies.

The Florida based company offers a full line of e-cig products, sold primarily in gas stations and convenience stores nation wide. The company also recently expanded its line by launching its first attempt at an open tank system.

Japan Tobacco Inc will finance the acquisition with a combination of cash and debt, upon receiving regulatory clearance. This marks the first time a major tobacco company has acquired a large independently owned U.S. based e-cig company since Altria acquired Blu in 2010.

Why it matters

There has been a lot of recent movement in the ciggalike sector of the vape industry. With companies like breathe appointing a big pharma executive to its board and now this acquisition.

It signals big pharma and big tobacco circling the industry, realizing there’s no way to stop our momentum as more and more smokers make the switch to vaping.

 

Instead they seem to be adopting a “if you can’t beat them, join them” philosophy.

Japan Tobacco Inc’s purchase comes on the heels of an 8.4% decline in cigarette sales during the first quarter of the year. Vaping continues to grow in popularity, and cigarette sales decline worldwide.

The question that begs to be asked is: When will big tobacco and big pharma set their sites on the vape community? And seek to get market share amongst drippers.

Will we see a big tobacco buy owned mod or rda?                    

More importantly, would any  mod maker or e-liquid company actually sell out to big tobacco or pharma? Probably.

The concern here is with more and more e-cig brands getting backed by big pharma and tobacco money, it leaves the independently owned companies at risk.

Numerous e-liquid brands, and hardware manufacturers will be at a disadvantage. It is important to keep in mind, that although the vaper community is large and growing daily, it is still the minority. Millions have switched to vaping, but only a small percentage of them become passionate aficionados.

Japan Tobacco Inc’s acquisition is one more step forward for big tobacco, buying market share, and using their vast resources to sell inferior products to uninformed citizens looking to try vaping.