Are you looking to trade vape stocks? E-cigarette stocks aren’t large in number because vaping is still a fairly new process. However, you can check out stocks like $PM, $XXII, and $MO. These tobacco stocks could see a jump to vaping.
The month of June saw two major events in the vaping industry. In the last decade, vaping has become almost as popular as smoking an old-fashioned cigarette. However, the Biden Administration and the Food and Drug Administration (FDA) decided to look into tobacco consumption. Biden and federal regulators are looking to slash the amount of nicotine in cigarettes, which could increase vape sales. On the other hand, the FDA decided to ban Juul e-cigarettes, which was later temporarily halted by a federal court appeal.
In this article, we will explore the major players in the vape stocks industry and how their stocks can be affected in the coming quarters. There has been a lot of controversy in the tobacco industry. Although e-cigarette sales are rising, they are a relatively new market. Therefore, their health concerns or benefits are still unknown. On the other hand, numerous studies have concerned conventional cigarettes and their health risks. Therefore, investing in this industry can be hazardous.
Does Juul Have a Stock?
Let’s begin with Juul. When you think of vape stocks, that’s who you think of. The company’s product is top-rated among teens and young adults.
Juul isn’t public, but 35% of the company belongs to one of the largest producers and marketers of tobacco products in the world, Altria Group (NYSE: MO).
When the FDA banned Juul products, Altria’s stock hit significantly. Although the ruling is temporarily on hold until July 12th, it’s a significant step backward for Juul and other companies in the industry.
In the last 12 months, Juul products were the second-best-selling vape products in the US. This represented a 33% market share. If the ban is maintained, many Juul users will seek the best-selling brand, which we will look at in the last section.
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The FDA’s ruling would ban any sales and production of Juul e-liquid products. The government organization cited incorrect data on the ‘’toxicological profile” of many Juul products.
It also expressed health concerns, but no hazard information was released. This allowed Juul to challenge the ruling. The ruling is based on a lack of information provided by Juul rather than immediate health concerns.
The company also challenges this. So, the FDA is also looking at similar companies and their products, which could scare vapers and send them back to cigarettes.
Biden’s proposal to limit nicotine content is still far from being approved. However, it could positively impact many vape companies and vape stocks.
1. Philip Morris (NYSE: PM)
Philip Morris is one of the world’s largest producers of cigarettes thanks to its success with Marlboro. Its products are sold in 180 countries.
In 2014, PM decided to expand its products to meet the new demand for e-cigarettes and alternative, less harmful products. So, it launched its brand called IQOS. It is branded as a tobacco heater.
According to the FDA, it is safer than smoking a regular cigarette. However, e-liquid companies like Juul claim their product is even safer. But they’re a good company to consider for vape stocks.
In 2021, the numbers for IQOS were very positive. It was licensed to Altria for sale in Atlanta, Georgia, and expanded into new markets such as Richmond, Virginia, and Charlotte, North Carolina. The US isn’t its main market. Outside of the US, the market share for IQOS increased to 7.3%.
The product currently has over 20M users, of which over 70% stopped smoking completely and switched solely to IQOS. The company is receiving positive feedback from the FDA and is planning to expand its presence in the US market.
To conclude the Philip Morris section, the company has its toes dipped in both the cigarette and vape market. In addition, it is slowly and successfully expanding its tobacco heater brand internationally.
2. British American Tobacco (OTCMKTS: BTAFF)
British American Tobacco (BAT) is another cigarette company that joins the ranks to compete in the e-cigarette market under the name Vuse. BAT is the value share leader in the US, Canada, France, Germany, and the UK.
These are the top 5 vapor markets in the world. The product is also gaining significant momentum in the US, with a 33,4% market share in the last 12 months. In addition, it is the leader by value share in 22 states.
Furthermore, Vuse is the world’s first carbon-neutral vape brand. In the first half of 2021, BAT recorded strong growth for its vape products.
The company recorded a 59% revenue growth and a 70% volume growth and converted 900K new customers to its products. In addition, it claims the throne for the number 1 vape brand with a 32% global value share. So, put this on a vape stocks list.
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3. 22nd Century Group (NASDAQ: XXII)
If you haven’t heard about 22nd Century Group, it’s perfectly normal. The company makes low-nicotine content cigarettes. Regulators claim it is less detrimental to our health since it is less addictive. It is also an excellent tool to reduce and eventually stop smoking. It is the only company with low-nicotine cigarettes. If Biden’s nicotine reduction plan comes to life, the 22nd Century benefits. It is still too early to see significant growth, but the company should be added to your watchlists if there are any cigarette changes. But wait, there’s more.
The company also produces genetically engineered cannabis plants with psychoactive compounds. So, besides being in the cigarette business, it is also biotech. Cannabis is legal in half of the country, and every few months, new states want to legalize it recreationally or medically.
If the 22nd Century can combine its low-nicotine cigarettes and cannabis, it can make a splash on the market. Some tobacco and cannabis users, as well as investors, would be interested in this product. So, vape stocks could see a shot in the arm.
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FDA & Health - Vape Stocks
All these numbers look good on paper but mean nothing without the FDA’s seal of approval. Does BTA have it? Indeed, it does. The FDA approved BTA’s e-cigarettes and tobacco-flavored pods. According to the data, Vuse products have fewer harmful chemicals than cigarettes. BAT claims there are around 99% fewer toxic chemicals in their product. Overall, they claim less risk.
Marketing of certain products remains, however, forbidden. However, this doesn’t seem an issue since most users share their thoughts on every product word-of-mouth.
Final Thoughts: Vape Stocks
Multinational cigarette companies such as Altria, Philip Morris, and British American Tobacco run the best-selling vape stocks. If you think about it, it makes perfect sense. In the eventual case of cigarette usage declining, users will naturally switch to vape products.
Cigarette companies win in both cases. The legendary Marlboro man will no longer smoke a cigarette but a lemon-flavored Juul.
There is always the possibility of major tobacco companies adding cannabis to their list of products once the plant becomes federally legal. Today’s list included an odd player, 22nd Century Group, a biotech/low nicotine company with the potential to gain significant market share.
Biden plans to limit nicotine levels in cigarettes. In addition, the FDA is targeting vape companies and the level of chemicals in their products that could endanger their legality. As a result, the stock of the companies mentioned in this article can be volatile if these proposals are implemented.
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