Can Phillip Frost Bring Vaporizers to the Mainstream?
Last year we were reading about Vaporin, a Miami-based e-cigarette retailer and distributor, when they reported that a billionaire investor Phillip Frost had taken a 10.8% stake in the company. Not long after that, another company that deals with electronic cigarettes, Vapor Corp, expressed their desire to merge with Vaporin, and in March this year both companies proudly announced the completion of their merger. Vapor Corp’s brands include Krave, VaporX, Hookah Stix and VaporinTM. As both medical and recreational marijuana fever continue to spread across the country, all heads in the industry have now turned to Frost.
Vaporizers are in, e-cigarettes are out
Vaporin is a relatively new competitor in the emerging e-cigarette industry, to be more specific – in the vaporizer segment. Since February 2014 when Vaporin began its commercialized operations, they have seen steady growth both through its online and traditional locations known as “The Vape Store.” Roughly five months after commencing operations, Vaporin had accumulated a gross profit of over 41% on just over 600k in revenue. Not a bad start for such a young company. Actually, scratch that – it’s an amazing start considering they had only four retail outlets at the time! Besides traditional “cigalikes” and vaporizers, Vaporin sells both wax and herb cannabis vaporizers. Now that 24 states have legalized some form of marijuana, this could prove to be a lucrative business model.
E-cigarettes market is blooming
Estimated at 2.5 billion dollars, the e-cigarettes market will continue to grow, and with Phillip Frost in the game, many are expecting it to be one of the most rapid growths ever. Nearly 63% of Americans said they don’t mind someone using an e-cigarette in their vicinity, which only confirms the big expectations. If people’s perception towards e-cigarettes is that open-minded, industry insiders are hoping that the same approach would be applied to marijuana vaporizers. There is obviously a big difference between a cigarette and an e-cigarette. That being said, it shouldn’t come as a surprise that big tobacco players have been late to the game.
Big Tobacco ‘s struggle in the vaporizer sector
They must’ve come to a conclusion that it is better for them to stay exclusively tobacco-related. Why else would they be so late to the game? The three largest tobacco companies all account for poor 25% of all e-cigarette sales, which in their case happen through large convenient stores. Surprisingly for many of players in the industry, none of these large tobacco companies have placed a significant stake in the vaporizer market, which now accounts for approximately 50% of the entire market. With four stores and an active sales channel through its website, Vaporin has established itself in the vaporizer industry and as it continues to open new stores the company is poised to increase its share of the ever increasing marijuana vaporizer market. There’s a rumor out there that Phillip Frost will make the word “vape” as popular as the word “Google.” It seems as if he might just make it. We’ll be watching, that’s for sure.