Yolandar Song
A recent study by Stanford University found that 24% of young people use nicotine-free vape products. The sample for this study was collected from 6,131 U.S. residents aged 13 to 40. The frequency of use of nicotine-free products is shown in the following table. We can draw a conclusion that many smokers tend to try nicotine-free and low-nicotine products to achieve smoking cessation.
2FIRSTS Tabulation
Whether demand or demand with intent, some vape liquid manufacturers see potential in both low-nicotine and nicotine-free products and some retailers are integrating low-nicotine or nicotine-free smoking alternatives into their product portfolios as tobacco regulations continue to be implemented in 2022.
Nicotine-free
Recently, Endexx has reviewed the company's financial report on its major achievements in the fourth fiscal year, and it even moved up its financial report by one quarter due to good performance in this quarter.
The main brand of Endexx is CBD Unlimited, which has been the main developer of Hemp-Derived products since 2014.
Endexx announced its revenue on November 30. The annual revenue has exceeded its best figure by more than 500% as of the first fiscal quarter of 2023. The company is focused on the development and sale of natural plant-based external skincare products and CBD products, but the revenue growth didn't come from skincare products. It is largely attributed to the acquisition of HYLA, a nicotine-free vape production company.
Endexx announced the acquisition of Hyla US Holdco Limited on September 8, 2022, a producers and distributors of nicotine vape products, have brought two benefits to Endexx. The first is the expansion of international distribution networks in 10 countries (Dubai, Saudi Arabia, the UK, the Czech Republic, Slovakia, Germany, France, the Kingdom of Bahrain, Egypt and Switzerland), which Endexx expects to provide further leverage for its men's products sales. The second one is the comprehensive revenue of Endexx increased significantly thanks to the distribution and sales of Hyla's previous nicotine vape products.
According to Proactive, the acquisition of a controlling stake in nicotine-free vape producer Hyla US Holdco Ltd would add 10 new countries to the company's international distribution network, said Todd Davis, CEO of ENDEXX Corp.
It is worth noting that HYLA received two new purchase orders of over 200,000 units in the first month of joining Endexx.
Then, Endexx announced that it had won three major orders for its newly acquired non-nicotine plant-based vape product HYLA, which would generate a total of $2.3 million in revenue for the first two fiscal quarters of 2023 on October 27, 2022. Orders are from distributors in the western United States, Central Asian countries and Dubai, UAE, and orders from Dubai stretch over six months with rapid growth potential.
"The major events of the fiscal fourth quarter enabled us to quickly accelerate our reach in the retail space of skin care and painkillers by building our presence in major retail sites," said Todd Davis, CEO of Endexx. The acquisition of HYLA further expands our international distribution network. It allows us to significantly expand our revenues by selling and marketing HYLA's unique non-nicotine, Guarana-based vape product, and we believe it will be an important demand market and provide us with an international channel to sell our other product lines in regions where HYLA already operates. We are optimistic about the future of Endexx, as we are implementing and beginning to see signs of our future potential."
Low-nicotine
The FDA issued a ban on menthol cigarettes and all flavored cigars/cigarettes last year. VLN ® Menthol King is the only legally combustible menthol cigarette in the U.S. market and the FDA-authorized combustible cigarette that meets FDA's strict nicotine reduction product standards.
In April 2022, 22nd Century Group launched consumer-centered cigarettes of very low nicotine (VLN cigarettes, or VLNC) in the Chicago area according to vaping360. It has obtained marketing authorization from the FDA with through PMTA and MRTP. Smoke, smell and taste of VLN belonging to 22nd Century Group's cigarettes are similar to cigarettes, but nicotine is about 95% lower than traditional cigarettes.
The 22nd Century Group further expanded the scope of its previously announced VLN® low nicotine cigarette products in Colorado, and its reach was expanded to Arizona, Utah, and New Mexico on October 26, 2022.
In early November 2022, 22nd Century Group released its business highlights and financial results for the third quarter of 2022. "In the past few months, 22nd Century has made great commercial progress in low-nicotine tobacco, cannabis and cannabis businesses," said James A. Mish, CEO of the 22nd Century Group. Our VLN® product launch has expanded from a special pilot in Chicago to five states today. We plan to expand the base to as many as 18 states over the next 12 months. It enables us to occupy more than half of t U.S. tobacco market worth $80 billion and secure a place in most states with enacted MRTP excise tax provisions that benefit the licensing of our unique products. Even a 1% share we think is very easy to achieve based on our pilot results. The FDA continues to advance its interest in nicotine reduction policies, and the 22nd Century is at the forefront of this chance with the only MRTP-authorized combustible cigarettes 95% reduced nicotine."
The report shows that the 22nd Century Group will focus on launching VLN® at least 12 to 18 states such as Illinois, Colorado, Arizona, New Mexico, and Utah over the next 12 months. In addition to Illinois and Colorado, VLN was authorized by Circle K to be sold at all of its New Mexico stores. Nicotine-free low-nicotine tobacco products may bring new economic growth points to the traditional tobacco and next generation nicotine industries.
References
[1] Endexx's non-nicotine vape company acquisition sees revenue soaring in fiscal 1Q
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