Since the Deeming Rule was announced by the FDA in 2016, all of the major cigarette companies have made investments in — or outright purchases of — independent vaping businesses.
Before the Cosmic Fog investment, Fontem and its e-cigarette company blu purchased the My. Von Erl pod vape from its Austrian owners, and rebranded it as the myblu. That product has just been released in the U.S. and U.K. Before it was bought by Fontem, Von Erl had signed a distribution deal last summer with the Imperial subsidiary.
Altria Group, the parent company of Philip Morris USA — makers of Marlboro cigarettes — has made several forays into the vapor market. In addition to buying a stake in vape shop chain Avail Vapor, the tobacco giant bought pod vapes Cync and Phix. The Phix is now being sold by Altria as the MarkTen Elite.
British American Tobacco (BAT), which has been active selling vaping products in the U.K., recently bought American tobacco company Reynolds American (best known as RJ Reynolds). The BAT vapor portfolio isn’t being sold the the U.S. yet, but presumably we’ll see Reynolds-branded vapes soon — aside from its declining gas station cigalike Vuse, that is. And late last year, BAT purchased South African indie vape leader Twisp.
The cigarette companies smell the change in the air, and want to remain relevant. If they have to buy the entire vapor industry to do it, they could — easily. Altria, for example, had nearly $15 billion in profits alone last year. That’s three times the total sales of all American vape businesses combined.
Since no vapor products not on the market as of August 8, 2016 can be sold without going through the annoying-to-impossible (annoying to Big Tobacco — but impossible for vape companies) PMTA process, cigarette manufacturers may be saving themselves some money by buying up existing brands.
Whether they’ll bother to take a chance on submitting PMTA’s for any of these new purchases is anyone’s guess. What they’re really waiting for is the FDA’s response to the Philip Morris International (PMI) PMTA and modified risk applications for its IQOS heat-not-burn device. The result of those submissions will probably determine the future of low-risk nicotine products in the U.S.