Almost 60% of 34 million adult smokers in the US are looking for alternatives.1
And with 1.3 billion tobacco users worldwide,2 that means a LOT of consumers want a better way to get their smoking fix.
The tobacco industry is a huge and growing market:
- Revenue: US$793B in 2021
- Growth: 2.87% CAGR 2021-20253
But smokers – and the industry – are facing some serious headwinds.
Take the menthol cigarette segment. It’s an $85B global market growing at a CAGR of 3.1%.4 Over 18 million Americans smoke menthols.5
But the FDA announced in April6 they’re working on banning menthol in cigarettes within the next year due to the addictiveness and harm being caused. Canada banned them back in 2017.7
Meanwhile, governments continue to further restrict where people are free to smoke8 – from restaurants to bars, parks, workplaces and more – all to improve public health.9
Then, there’s rising taxes. According to the World Health Organization (WHO), “taxes need to be increased regularly” and:
“Increasing the price of tobacco through higher taxes is the single most effective way to encourage tobacco users to quit.” 10
It doesn’t help that tobacco is one of the world’s biggest health threats, killing over 8 million people yearly, including 1.2 million non-smokers from exposure to second-hand smoke.11
All of these factors have created the perfect storm for innovative solutions to current smoking options and one company has figured out how to bypass rising taxes and create a product that could be considered a “smoker’s dream.”
Poda has developed products that satisfy smoker’s cravings by perfecting the newest and possibly best alternative to cigarettes: Heat-not-Burn (HNB) products.
HNB systems are considered to offer reduced-risk products because they do NOT burn anything.
Instead, they heat organic materials to release the product’s nicotine and flavor without producing smoke. (There’s no liquid involved, so HNB products are NOT e-cigarettes.12)
Even giant tobacco companies are pushing a smokeless future13 and are already selling HNB products to the market.
Back in 2017, Forbes wrote:
“A little-known tobacco technology, Heat-not-Burn (HNB), has the potential to slash smoking-related death and disease by appealing to the millions of smokers who’ve failed to quit using e-cigarettes and traditional nicotine-replacement therapies.”14
Fast forward to today and the world’s largest tobacco company, Philip Morris International, is selling its Heat-not-Burn product – IQOS – in 64 countries, with an estimated 17.6 million users…AND with an incredible 25% of the company’s revenue coming from these new products.15
It’s no exaggeration to say these disruptive Heat-not-Burn (HNB) products have revolutionized the tobacco industry.
But the WHO points out a MAJOR problem that remains for big tobacco:
“All forms of tobacco use are harmful, including HNB tobacco products. Tobacco is inherently toxic and contains carcinogens even in its natural form.”16
Another company in the market called TAAT Global Alternatives has taken it one step further by developing a tobacco-free AND nicotine-free smoking experience using hemp cigarettes.
TAAT began trading on the CSE just under a year ago and has seen it’s stock price rise from C$0.71 on June 22, 2020 to a high of C$6 on February 16, 2021 and is now sitting C$3.40 with a market cap of $333 million.
The thing is TAAT’s Beyond Tobacco products burn just like regular cigarettes, so even though they don’t contain harmful chemicals from nicotine, they still require users to light them on fire and inhale smoke into their lungs.
That’s why Poda Lifestyle & Wellness Ltd. (CSE: PODA, OTC:PODAFCSE: PODA, OTC: PODAF) is determined to continue the HNB revolution…but WITHOUT tobacco…and with several other big competitive advantages as well.
Poda just inked a deal with Big Tobacco company ESON for a pilot distribution of its patented HNB products through ESON’s existing network in Europe and Asia where it currently sells over 50 million units per month.17
ESON has developed a patented proprietary blend of tobacco-free products, designed numerous electronic nicotine delivery systems and has successfully licensed its IP to some of the biggest tobacco companies like Japan Tobacco International, Imperial, British American Tobacco, even Philip Morris International.
And ESON’s CEO Daniel Chen said he anticipates tremendous success with the NEAFS by PODA product.
“Poda has developed an incredible HNB platform, and their zero cleaning pods offer consumers a hasslefree HNB product that delivers consistently great results, day after day. Additionally, the vapor is flavorful and robust, offering cigarette-like satisfaction to discerning adult smokers,” – Daniel Chen, ESON CEO
With over 400 million adult smokers in China, this partnership with ESON could provide Poda Lifestyle & Wellness Ltd. (CSE: PODA, OTC:PODAFCSE: PODA, OTC: PODAF) with a fast-tracked opportunity to rapidly develop its market share in the Chinese market.
The Better Heat-not-Burn System & Investment Opportunity
Its public listing comes at the perfect time since the company is about to launch and globally commercialize its HNB systemand flagship Beyond Burn™ Poda Pods.
Poda reduced-risk HNB products have a long list of competitive advantages, the first of which is that they contain ZERO tobacco.
Instead, they use a proprietary blend of tea leaves infused with synthetic nicotine to perfectly mimic tobacco.
The result? Smokers have a smoke-free alternative to their regular habit without sacrificing any of the satisfaction they’re used to (unlike with e-cigarettes or nicotine gums).
Smoke-free also means the toxic parts of traditional cigarette smoke are likely to be almost entirely absent from the emissions produced by Poda Lifestyle & Wellness’ Beyond Burn™ Poda Pods.19
Another big advantage is the company’s aggressively competitive pricing compared to tobacco-containing HNB products.
- They avoid rising tobacco taxes and duties (remember, they’re tobacco-free)
- They have low production costs (more on that in a moment)
But the BIGGEST differentiator of all is there’s NO cleaning required. This solves the major pain-point that other HNB products suffer from: the need for regular cleaning.
Remember IQOS, the Philip Morris tobacco HNB product mentioned earlier? You have to clean it after every 20 sticks or so. Even then, the cigarette smell never really goes away. It’s like having an ashtray in your pocket.
In contrast, Poda Pods are the FIRST and ONLY cigarettes to have a completely closed end. So there’s no mess (it all stays in the sealed pods).
That also means no ash, no maintenance, no residual odor in the heating device, AND no cross contamination between pods – each pod is a fresh experience.
In other words, this is no ordinary HNB system.
Poda spent the last 6 years in extensive R&D and invested over $5 million in product development to make that possible.
They’ve also assembled a team of proven executives and advisors that understand the HNB market and have the know-how to build the company and grow shareholder value.
With the global HNB market projected to grow at an incredible CAGR of 32.8% from 2020 to 2027,20 and a clearly superior HNB system ready for global launch, newly-listed Poda Lifestyle & Wellness Ltd. (CSE: PODA, OTC:PODAFCSE: PODA, OTC: PODAF) represents a rare ground-floor investment opportunity and chance to be part of the future of reduced-risk smoking.
Even More Competitive Advantages
So, we’ve already covered these Poda advantages:
- NO tobacco
- NO smoke
- NO cleaning
- NO residual odor
- NO cross contamination between pods
- Synthetic nicotine
- Competitive pricing
The good news for investors is there are several more reasons smokers are likely to prefer Poda HNB devices and products:
- Environmentally Friendly: Poda Pods are fully biodegradable, which is a perfect fit with growing consumer demand for sustainable products.
- All-Day Convenience: Fast-charging battery can heat an entire pack of Poda Pods on a single charge for all-day satisfaction.
- Heat Anything: HNB system enables the potentially reduced-risk consumption of tobacco, e-cigarette liquids, cannabis, caffeine, medicinal herbs and many other products…that flexibility means huge growth opportunities for the company.
- Flavor Options: Smokers love flavors. Poda Pods will have 6 to choose from initially, including the beloved menthol, with many more to follow.
- Could Help Smokers Quit Cigarettes: Poda’s tobacco-free blends and smoking-like experience could make smoking cessation treatment programs more effective.
With Poda Lifestyle & Wellness Ltd. (CSE: PODA, OTC:PODAFCSE: PODA, OTC: PODAF) about to globally commercialize its superior HNB system and products, investors should keep a close eye on how these advantages could drive outsized market share capture and stock price gains in the coming months.
Business Development Advantages: Patents, Production, Revenue & Distribution
The Poda team hasn’t just created superior product offerings. They’ve also done the heavy lifting to prepare for its global launch this year.
Vital Patents Protection:
Poda’s one-of-a-kind HNB system IP is fully patented in Canada and is patent pending in 65 additional countries.
That covers over 70% of the world’s population.
The applications are progressing through various stages of the patent process, with all current filings expected to be granted by the end of 2023.
Poda’s Beyond Burn™ heating devices are produced at a world-class e-cigarette factory that gives Poda Lifestyle & Wellness Ltd. (CSE: PODA, OTC:PODAFCSE: PODA, OTC: PODAF) the triple advantage of low-cost production, exceptional quality, and unlimited scalability for future growth.
Poda Pods are currently manufactured at the company’s facility which uses automated production equipment Poda developed.
The proprietary process is extremely low-cost.
Better yet, they can now install that same automated equipment at strategic locations globally to meet regional demands while also reducing distribution costs and potentially lowering labor costs.
Its current production capability is 400,000 pods per month. They plan to scale that up in Q3 2021 to meet increasing demand.
In other words, Poda Lifestyle & Wellness Ltd. (CSE: PODA, OTC:PODAFCSE: PODA, OTC: PODAF) has already invested in and built the engine and now they’re ready to turn the ignition on and work it 24/7/365.
The Poda revenue model is diversified across 3 complementary verticals:
- Beyond Burn™ heating devices
- Beyond Burn™ Poda Pods (think “recurring revenue”)
- White labelling partnerships (also recurring revenue)
In Q2 2021, Poda will launch its online retail sales portal. Since they’ll be able to sell directly to consumers worldwide, that single catalyst could drive serious investor interest in the stock.
At the same time, Poda is in ongoing distribution discussions and is pursuing various distribution agreements with FMCG (fast moving consumer goods) distributors globally.
White labelling opportunities will also enable Poda to extend its distribution reach.
But the biggest near-term catalyst for investors to watch for is Poda’s Q2 2021 market test with the help of Shenzhen ESON Technology Co., Ltd. (ESON).
ESON currently distributes over 50 million of its proprietary NEAFS sticks per month into the Chinese and European markets. NEAFS sticks are IQOS-compatible single-use products.
In Q2 2021, ESON will test launch a “NEAFS by Poda” product using ESON’s current distribution channels.
The test is expected to include a minimum of 1 million units to gauge the level of market interest and adoption.
If the market test is a success, Poda and ESON have agreed to partner around an ongoing offtake agreement with expected initial volumes to exceed 10 million Poda pods per month.
With those business development advantages already in place – patents, production, revenue model and distribution – Poda Lifestyle & Wellness Ltd. (CSE: PODA, OTC:PODAFCSE: PODA, OTC: PODAF) has multiple exciting near-term catalysts coming up and perfect timing to penetrate and disrupt the emerging HNB market.
Heat-Not-Burn and the Better Future of Smoking
We already discussed the headwinds facing the tobacco industry, including:
- Bans on menthol cigarettes
- Restrictive non-smoking regulations
- Rising taxes on tobacco
- Known major health threats of cigarette smoking
That’s all good news for Poda Lifestyle & Wellness Ltd. (CSE:PODA, OTCPK:PODAF) and its investors.
But the most obvious sign that HNB is the future of smoking is that big tobacco is saying exactly that.
Just look at the website of the world’s largest tobacco company, Philip Morris International.
The first thing you see is its new tagline:
No surprise, really, considering:
- They’ve sunk over $8.1 billion into developing its smoke-free business21
- They sold 76 billion heated tobacco units in 2020 for a YoY gain of 27.59%22
- 25% of the company’s revenue now comes from these new products23
But while HNB is paving the way for a better smoke-free future, Poda Lifestyle & Wellness Ltd. (CSE:PODA, OTCPK:PODAF) is offering an even better HNB alternative that’s also tobacco-free…a clear competitive advantage that sets them apart from the pack.
Outshining the Competition
As well, we’ve already seen how Poda has several major advantages over the industry-leading IQOS line from Philip Morris International and Altria Group (the parent company of Philip Morris USA):
- NO tobacco
- NO cleaning
- NO residual odor
On top of that, the IQOS system is TWICE the price of Poda’s HNB system.
The fact is, even though these Big Tobacco heavy hitters are shifting towards a “smokeless future,” it seems that they may have missed the mark in creating a superior product for the market.
Then there’s British American Tobacco and its glo tobacco HNB system. It’s not tobacco-free and it only works with its tobacco sticks,24 unlike Poda’s system with the flexibility of heating other products.
Imperial Brands has done extensive consumer testing of its Pulze HNB system in a number of our European markets…but again, this system isn’t tobacco-free either.25
Then, there’s TAAT Global Alternatives which has developed tobacco and nicotine-free hemp cigarettes that “mimic the tobacco cigarette experience in taste, smell, touch, sight, and sound.” Of course, it also doesn’t offer the nicotine that smoker’s crave, so it’s unclear if this alternative will satisfy traditional smokers or not. TAAT products also differ from the others because they are burnt just like regular smokes, which can be seen as both a positive and negative depending on what the user wants.
Smokin’ Hot Management & Advisory Team
Ryan Selby – Co-founder and CEO: Successful multi-patented inventor that originated the Poda concept. Business developer that’s led the company since it started in 2015. Over 15 years of industry experience designing, developing, patenting, commercializing and distributing innovative products and accessories for the smoking industry. As a passionate believer in the massive potential for reduced-risk smoking products, he’s committed to growing Poda on a global scale.
Ryan Karkairan – Co-founder and VP Design: Co-developed the initial Poda concept. Actively leading ongoing R&D efforts as Poda continues to develop innovative reduced-risk smoking products and accessories. Worked in the smoking industry for over 10 years and held senior management positions in both Sales and R&D. Extensive knowledge of the reduced-risk industry.
Daniel Chen – Strategic Advisor: Founded Shenzhen ESON Technologies Co. Ltd. in 2010, which has designed numerous electronic nicotine delivery systems and has successfully licensed IP to and served as an original equipment manufacturer for some of the world’s biggest tobacco companies, including Japan Tobacco International, Imperial, British American Tobacco, Godfrey Phillips India, Philip Morris International and China National Tobacco. In 2020, founded the NEAFS brand, a non-tobacco synthetic nicotine blend that is IQOS compatible.
Juan Manuel (Jon) Ruiz – Strategic Advisor: Mr. Ruiz was a key executive for one of the largest tobacco companies in the world, Philip Morris International (PMI), for more than 15 years. In 2004, he was appointed Chief Executive Officer of Tabaqueira, a former Portuguese state monopoly that was acquired by PMI and contributed as one of PMI’s top 10 EBITDA producers worldwide. In 2006, Mr. Ruiz was assigned the integration of Coltabaco in Colombia, one of PMI’s largest single investments to date. After 15 years at PMI and 20 years in the fast-moving consumer goods space, Mr. Ruiz decided to expand his professional experience as CEO of Colombia’s leading media group.
- Huge Market:3 billion tobacco users worldwide26driving revenue of US$793B.27
- Headwinds Facing Tobacco Industry:Bans on menthols; restrictive regulations; rising taxes; known major health threats.
- Growing Demand for Better Alternatives:Global HNB market projected to grow at CAGR of 32.8% from 2020 to 2027.28
- Poda Pods have ZERO Tobacco:Huge competitive advantage over other HNB systems, especially since the WHO says, “All forms of tobacco use are harmful, including HNB tobacco products.”29
- Even More Competitive Advantages:No cleaning. No residual odor. No cross contamination between pods. Environmentally friendly. Heat-anything flexibility. And more.
- Aggressively Competitive Pricing:Made possible by avoiding rising tobacco taxes & duties and by having low production costs through proprietary production automation.
- Heavy Lifting Already Done:6 years of R&D and over $5 million already invested in product development.
- Fully Patented: The unique Poda Lifestyle & Wellness Ltd. (CSE:PODA, OTCPK:PODAF) HNB system IP is fully patented in Canada and patent pending in 65 additional countries, covering over 70% of the global population.
- Strong Management Team:Proven executives and advisors that understand the HNB market and have the know-how to build the company and grow shareholder value.
- Multiple Near-Term Catalysts:Global launch and commercialization in 2021. Ramping up production. Expanding distribution through white labelling, online sales, distribution agreements, and the Q2 2021 ESON market test that’s expected to include a minimum of 1 million “NEAFS by Poda” sticks.
Learn why Poda Lifestyle & Wellness could be the smoke-free alternative stock of 2021.
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FORWARD LOOKING INFORMATION
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