PAX, the San Francisco-based company, puts out what has been dubbed the “iPhone of vaporizers,” now in its third generation. It is also the genius behind the sleek closed (pod) system nicotine delivery device that looks more like a USB thumb drive than an e-cigarette. It additionally launched a super-premium THC vaporizer, expected to further increase its exposure to the cannabis category, currently available in two states—Colorado and California.
PAX 3, Juul and PAX Era, respectively, are the technological offspring of PAX Labs, a premium electronic player intending to reinvent the smoking experience. Tobacco Business recently caught up with Tyler Goldman, PAX’s technology-savvy CEO since August. Here are his industry and company thoughts from a premium perch:
Tobacco Business: Please give us an update on Juul since the August 8 deadline passed. How have sales been, and where is Juul selling the best, channel-wise?
Goldman: Sales have continued to grow for us in quite an accelerated fashion; it’s true of the starter kits and the (pod) refills—both are much higher than we anticipated. That’s resulted in a shortage. We are working very hard, but we’re still not there yet, to get the
supply chain output to meet the current demand, so it’s halted opening up new doors. Today we’re only in 7 percent of c-stores—our primary distribution is in c-stores and vape stores, which is newer. We increased our production to 2 million pods per month, but we’re still only meeting 50 percent of demand. With new automated machinery, we should be at 5 million pods by January. We expect to significantly expand our distribution footprint.
Please share any interaction you have had thus far with the FDA regarding the PMTA process for Juul. How do you expect the costs associated with getting FDA approval to affect your business?
FDA is not at the forefront of my mind. We are going through the process of getting FDA approval; we’re in the middle of it right now for Juul. My understanding is that we’ve had an ongoing dialog with FDA and it’s a very positive one. The costs associated with getting approval are not immaterial, but they’re not changing the way we do business in any way. They’re not out of the ordinary for a business of our size; it’s not limiting how we’re running the business.
Where do you see PAX in the market moving forward? What role would you like
the company to take in the vaporizer/eCig/cannabis world?
We want to build the greatest lifestyle experiences in these categories. The category is not driven by enough quality products, value-added to lifestyle. Many companies don’t look at it that way, and I don’t think cannabis necessarily looked at it that way, but we’re looking
for better opportunities to produce that. There are a lot of parts involved in providing a great level of experience, including making our products available. We have a lot of work to do and right now, I’m spending half my time on the recruiting side. We need more talent in a number of places, including channel experts in tobacco stores, vape stores, and dispensaries. If you know of any, send them my way.
Read this full interview in the November/December 2016 issue of Tobacco Business magazine. Members of the tobacco industry are eligible for a complimentary subscription to the magazine. Click here for details.