14
TOBACCO BUSINESS
MARCH/APRIL 2014
NEWS & TRENDS
MARCH/APRIL 2014
Altria Buys Green Smoke’s Vapor Biz
PM USA’s parent company pays $110 million in cash to expand
its Nu Mark e-cigarette business.
Altria Group’s subsidiary Nu Mark has en-
tered into an agreement to acquire the e-
vapor business of Green Smoke and its affili-
ates for approximately $110 million in cash.
Founded in 2008, Green Smoke sells both re-
chargeable and disposable e-cigarettes and
had around $40 million in revenues last year.
The company has operations in the United
States and Israel, although most of its sales
are in the U.S.
The move will significantly expand Altria’s
vapor division, which currently consists of its
Nu Mark e-cigarette company and its recent-
ly introduced disposable brand MarkTen.
“NuMark’s entry into the e-vapor category
with its MarkTen product was an important
development in Altria’s innovation strategy,”
says Marty Barrington, Altria’s chairman and
CEO. “Adding Green Smoke’s significant e-
vapor expertise and experience, along with
its supply chain, product lines and customer
service, will complement Nu Mark’s capa-
bilities and enhance its competitive position.
Further[more], Green Smoke’s culture of
innovation and history of producing high-
quality products are consistent with Altria’s
culture.”
The agreement includes provisions for
Altria to retain key Green Smoke manage-
ment infrastructure and talent. “We are very
pleased to be joining the Altria family of com-
panies,” says Robert Levitz, Green Smoke’s
CEO. “We are dedicated to innovation and
believe joining Nu Mark will help us deepen
that expertise and create new opportunities
for our customers, our employees and our
products.”
Analysts see themove as a strong strategic
play by Altria. “Altria took a deep scan of the
entire e-vapor space and felt Green Smoke
was the right fit at the right time,” says Bon-
nie Herzog, tobacco analyst for Wells Fargo,
who pointed out that the deal will help Philip
Morris develop a portfolio of e-vapor brands
to complement itsMarkTen product line. “We
believe that Altria can leverage its sales force,
retailer relationships, and marketing exper-
tise to quickly bring broader distribution to
Green Smoke,” says Herzog, who also hopes
the category as a whole will benefit from the
acquisition. “From a regulatory perspective,
this acquisition may put further pressure on
the FDA to regulate e-vapor products as they
become increasingly more mainstream.”
Highlights
Rhode Island
Seeks E-Cig
Tax
Rhode Island Governor Lincoln
Chaffee wants to impose an 80
percent tax on e-cigarettes, cit-
ing a belief that “electronic ciga-
rette laws should mirror tobacco
product laws.” Opponents are
protesting the proposed tax,
saying it will incent smokers to
continue smoking and fail to pro-
duce the additional revenue the
state is after as e-cigarette us-
ers will simply buy out of state.
Illinois E-Cig
Proposal
Commissioner Jeffrey Tobolski
(D-McCook) of Cook County, Illi-
nois plans to introduce a propos-
al that will require e-cigarettes to
be sold from behind retail store
counters, and ban their sales to
minors. Chicago, which is the
county seat, approved a similar
measure last month.
Hawaii
In Hawaii, the Senate Health
Committee and Commerce and
Consumer Protection Commit-
tee passed a Senate bill that will
raise the legal age to purchase
tobacco products and e-ciga-
rettes from 18 to 21. However,
the committee deferred another
measure that would have im-
posed an excise tax on e-cigs.
