Lorillard purchases Blu E-Cigs

[BuzzKill]

Tonight at 9:00pm EST “Lorillard buys Blu Cigs” on VP Live
VapersPlace | VP Live

We are going to do a roundtable discussion.
My guest will be:
rolygate - admin of ECF
Chris - admin of Vaportalk
Jan - admin of vapersforum
Scott - admin of Nu-vapor
and me - admin of Vapers Place

Hopefully I will have Jason Healy (owner of Blu Cigs) on next week.

You may want to get a business professional on there as well that deals with these types of things to add some perspective.

 

[kevbow]

The replay is up
Lorillard buys Blu Cigs by VP Live on SoundCloud - Create, record and share your sounds for free

 

[Docliv]

Hi All,

We all knew this was coming, but I suspect most everyone was surprised at how soon it occurred. I know a bit about patent issues and am convinced that most "cigarette-type" e-cigs will have an issue to deal with Lorillard/Ruyan. Popular eGo and Echo-type units are different enough to be exceptions. However, with all the available funds and attorneys BT has, why wouldn't they go for their own patents to cover these units as well?

e-liquid is another issue. I am positive that we'll soon be trading stringent manufacturing protocols (better for everyone safety-wise) for taxation on e-liquid. Every form of Federal, State & local government will want their piece to replace dwindling tobacco cigarette taxation income. I strongly doubt BT will be adding any nasty things to any e-liquid they make directly as they are most certainly NOT stupid and going up against the FDA, even they can't afford to screw up the "harm reduction" train they will be riding on.

All this means to us is simply "growing pains" for an industry that has clawed its way out of the business basement into the almost mainstream area with little help from anyone (with the exception of CASAA & ECF and a few others).

Since I have always been a "terminal optimist", I venture to propose (IMHO) that overall all tobacco smokers will benefit greatly from BT's formal entrance into the industry. Only they have the manufacturing and legal resources to take on BP and the FDA effectively. Sure, things may cost a bit more, but let's face it... the health of millions will be vastly improved. Isn't that what our industry was created for?

VAPE ON!

 

[kwalka]

Hi All,

We all knew this was coming, but I suspect most everyone was surprised at how soon it occurred. I know a bit about patent issues and am convinced that most "cigarette-type" e-cigs will have an issue to deal with Lorillard/Ruyan. Popular eGo and Echo-type units are different enough to be exceptions. However, with all the available funds and attorneys BT has, why wouldn't they go for their own patents to cover these units as well?

E-liquid is another issue. I am positive that we'll soon be trading stringent manufacturing protocols (better for everyone safety-wise) for taxation on e-liquid. Every form of Federal, State & local government will want their piece to replace dwindling tobacco cigarette taxation income. I strongly doubt BT will be adding any nasty things to any e-liquid they make directly as they are most certainly NOT stupid and going up against the FDA, even they can't afford to screw up the "harm reduction" train they will be riding on.

All this means to us is simply "growing pains" for an industry that has clawed its way out of the business basement into the almost mainstream area with little help from anyone (with the exception of CASAA & ECF and a few others).

Since I have always been a "terminal optimist", I venture to propose (IMHO) that overall all tobacco smokers will benefit greatly from BT's formal entrance into the industry. Only they have the manufacturing and legal resources to take on BP and the FDA effectively. Sure, things may cost a bit more, but let's face it... the health of millions will be vastly improved. Isn't that what our industry was created for?

VAPE ON!

Thank you for your input... I'm curious, did you listen to last nights broadcast? I am about halfway thru as we speak/type.
For those of you who intend to check it out, feel free to fast forward to the 25.00 minute mark, as the first 25 is basically senseless banter, unrelated to the topic.

If any of the participants are reading this, Roly, Thanks for your time. Its great to filter out the nonsense, and hear some opinions from those who have been around the block.

 

[Docliv]

Sorry kwalka, I missed it. Will check it out later.

 

[kwalka]

Sorry kwalka, I missed it. Will check it out later.

I just think, w your background you will find it very interesting, FTM, every vaper will find it interesting.

 

[rolygate]

@Kwalka
Thanks. I think that like Russ says, it will be of great benefit - initially. I reckon for around three years or so it will give us a massive boost. After the honeymoon, when commercial considerations start to bite, Blu might end up going the TVECA route, and perhaps assist the FDA with the removal of competitors or at least not make it too difficult for them.

That means the products used by 92% of long-term users, i.e. you and me. Only 8% of users polled still use a mini. Due to statistical issues you could probably double that figure and add some - but anyway, around 80% or more of long-term users traded in their mini with prefilled cartos for something that worked better.

I know I have a bee in my bonnet about the corruption created by the pharma industry and I probably went over the top with that last night. A result of too much wine, not enough sleep, and a really annoying echo on the audio for the panel that scrambles the brain. That's my excuse anyway.

Too many people knock the tobacco industry and by doing so they buy into the anti's propaganda. All you can accuse BT of doing, in reality, is being a bunch of incompetent liars and even more incompetent managers: they may have lied about cigarettes being harmful and addictive - but everyone knew they were lying so in my eyes it doesn't count. What is a lie when everyone knows you are lying? Bad management I think - hardly an effective strategy to make more people ill. And then leaving all the documentation lying around that proved they knew they were lying - what were they thinking of? As I say, they may be incompetent buffoons but hardly dangerous killers; if you buy a pack of cigs you know exactly what you are doing and don't try to tell me otherwise. In any case they are only the minor partner in the cigarette business, the state is the major partner. The state takes 90% of the income, BT gets 10%. Who exactly is the party to blame when a business is owned 90-10? I'd say it is the 90% owner, personally.

BT doesn't want you to get sick and die as it is basically just bad business all round. Who wants that? But unfortunately that's what the product does, so there's no getting away from it. Their big mistake was to lie about it - but then everyone knew they were lying so it doesn't really count. On the other hand, pharma's entire business model is based on more people getting more sick. BP needs more people continually getting sick, and the more ill they get, the better. The profits from chemotherapy drugs, COPD drugs, cardiac drugs, vascular drugs and all the rest are tens of billions - maybe even hundreds of billions - of dollars a year. They are desperate to stop ecigs because there is a very real prospect of a 50% or more cut in that income. People who use ecigs don't need chemotherapy drugs.

Pharma's entire business model is built around getting legislation that ensures more people get sick. Among their ranks they have the world's proven biggest criminal fraudsters, and that's most likely just the tip of the iceberg. To me they are a cancer in society that needs removing - but that will never happen as they own too much of government.

You can criticize big tobacco all you like but at least they are out in the open, and they'd prefer it if you didn't get sick and die. They have, or have had, some incompetent buffoons running the business but that's not a capital offense. In contrast pharma works behind the scenes suborning officials, publishing propaganda against safer tobacco alternatives through front groups, and getting legislation to ensure people continue to get sick and need their products.

I know which I prefer.

 

[Petrodus]

Tonight at 9:00pm EST “Lorillard buys Blu Cigs” on VP Live
VapersPlace | VP Live

We are going to do a roundtable discussion.
My guest will be:
rolygate - admin of ECF
Chris - admin of Vaportalk
Jan - admin of vapersforum
Scott - admin of Nu-vapor
and me - admin of Vapers Place
Hopefully I will have Jason Healy (owner of Blu Cigs) on next week.

I listened to the broadcast and made some notes
Recommend others download the broadcast for future reference
_______________

It would be a smart move for Blu to buy Johnson Creek

Bottle liquid will eventually be a thing of the past

Per Fox News last year ecig sales was between 250 and 550 Million dollars

This is the "golden years of vaping"
things will not get better...only worse

The FDA is paid to kill e-cigs. They are owned by the pharmaceutical industry

MODs (3-4% of the vaping community) will not be a part of the future of E-cigs and "They" really don't care about the minority.

Next company to be sucked up will be NJOY

I trust BT much more than BP - (1:06:30 - 1:08:30)
Excellent

The market from here on out will "BOOM"

The majority of e-smokers are Not Enthusiasts. The public at large who smoke prefer non-complicated miini with a cart ... no messing around ... just pull it out and vape as an alternative to smoking. We can argue that point, however, it is true. In the short term many will Google and find the ECF and or vendors offering alternatives and MODS. That will Not be in the long-term future.

It fun to speculate about the future but there are many variables that have not surfaced and much will come from what Blu does and doesn't do.

95% of the market is fixed batteries with cartomizers. There will be benefits and their will be draw-backs. Nothing will really start for another year

Would the FDA be concerned about the Black Market created?
NO ... Its just too small of a percent of the market for them to worry about. Some smokers roll their own but the overwhelming majority buy the packs. The FDA will of course do some saber rattling but will not spend a lot of effort in this area

Blu doesn't care about MODs and bottled juice that helps keep us (the 4%) off cigarettes. They don't care because it’s only the 4%. There is no way the FDA will go for bottled juice and MODs. The FDA will do what the F_ck they want to do (period)

Will prices go up in the future: yes
The area that will rape the public is cartomizers
Get ready for cartomizers to go up in price to $35 a pack

Marketing of e-cigs will be in-store sales and on-line sales will go away.
But the majority of e-cigs are bought on-line !!!!
Well ... That Is About To CHANGE

Lorillard will not fight for MODS and bottled juice, which is obvious something that the FDA will oppose. The FDA may lay down under pressure from Lorillard and say OK to fixed batteries and cartomizers. Lorillard will say OK

At some stage Lorillard will agree with regulations that benefit them even though those regulations hurt other products and small vendors. They don't care about the 5% of the market ... Not at all ... Why should they?

This is a Game Changer and there is no getting around it.

 

[kwalka]

I listened to the broadcast and made some notes
Recommend others download the broadcast for future reference
_______________

It would be a smart move for Blu to buy Johnson Creek

Bottle liquid will eventually be a thing of the past

Per fox news last year ecig sales was between 250 and 550 Million dollars

This is the "golden years of vaping"
things will not get better...only worse

The FDA is paid to kill e-cigs. They are owned by the pharmaceutical industry

MODs (3-4% of the vaping community) will not be a part of the future of E-cigs and "They" really don't care about the minority.

Next company to be sucked up will be NJOY

I trust BT much more than BP - (1:06:30 - 1:08:30)
Excellent

The market from here on out will "BOOM"

Do you have a camera hidden in my room? Thats scary what you just posted. There is neither one more nor one less note on my list than what you just posted.
I couldn't agree more.

My next question for you and Roly is, are we now in a position where we should consider stockpiling nic base? I know the consensus is we have at least a couple of years, but I'm not willing to risk or bet on anything when it comes to BT, BP, or the FDA.
I personally wouldn't know the first thing about DIYing. It wouldnt take much for me to get a quick education and make it happen, but as of this point I am still dialing in my sweet spot w premixed juices.

 

[rolygate]

Stockpiling of anything is not necessary. There is at least a year to go before the FDA could enforce any kind of new regulations, which are only at the concept stage right now. First they have to get any new regs past the court battles that will ensue as the trade resist them. The trade can't stand by and watch the FDA kill off flavors, liquid refills, internet sales etc. You'll have months (if not years) of notice.

And then there are the postal packet and black market issues: if something can't be sold here, then maybe you can just order overseas and have it posted in. That's normally what happens. Blocking an extra zillion packets a week with ecig supplies is not something that will happen overnight, it needs more than just the FDA wanting it to happen. Then there is the black market: if you can't buy something officially you can usually get it unofficially. Laws and regulations don't magically stop things being available.

 

[kristin]

I also listened last night and disagree on two contentions:

1) The prices are guaranteed to go up.

Counter argument: Lorillard will have the purchasing power to buy huge amounts and reduce supply costs - much like Walmart does. Lorillard has to know that prices much lower than overly-taxed cigarettes are a huge draw for smokers who switch and will therefore be inclined to offer the lowest prices and fight unjustified "sin taxes."

2) Lorillard will never have any interest in the secondary market (upgraded devices and refill liquids) and will comply and/or co-conspire with the FDA to destroy it.

Counter argument: Lorillard will very quickly discover (if they don't already know) that vapers are not smokers - the brand loyalty is not there and repeat business may be much lower than desired, as vapers seek better options that fulfill their needs/wants in an e-cigarette. After discovering that they are losing current customers to a very lucrative secondary market, they will have two options - destroy the market so no one benefits or buy into it and profit from both the primary and secondary markets. If you were a business owner, which would you choose?

 

[kwalka]

I also listened last night and disagree on two contentions:

1) The prices are guaranteed to go up.

Counter argument: Lorillard will have the purchasing power to buy huge amounts and reduce supply costs - much like Walmart does. Lorillard has to know that prices much lower than overly-taxed cigarettes are a huge draw for smokers who switch and will therefore be inclined to offer the lowest prices and fight unjustified "sin taxes."

2) Lorillard will never have any interest in the secondary market (upgraded designs and refull liquids) and will comply and/or co-conspire with the FDA to destroy it.

Counter argument: Lorillard will very quickly discover (if they don't already know) that vapers are not smokers - the brand loyalty is not there and repeat business may be much lower than desired, as vapers seek better options that fulfill their needs/wants in an e-cigarette. After discovering that they are losing current customers to a very lucrative secondary market, they will have two options - destroy the market so no one benefits or buy into it and profit from both the primary and secondary markets. If you were a business owner, which would you choose?

I think prices will go up because Lorillard has effectively guaranteed tobacco taxes, no? Also how will they survive if they dont eliminate the juice supply? I dont believe that 80% of vapers are content w cartridges once they realize they can refill for 1/10th the cost. Maybe 80% of vapers, myself included, started w a blu type product, but I knew immediately that it was going to take much more than that to keep me off analogs. I had an eGo kit within a week and a half and I never looked back.
Lorillard will do studies to confirm that the current product is a gateway e cig, and if they want to make real profit they will have to tap the secondary market. So , I think they will attempt to buy out JC or someone similar.

Please keep in mind I am a new guy here, who is still in awe at how easy it was to go from 2+ PAD to exclusive vaping, and I feel very strongly, as I'm sure most of you do, that it will be a tragedy if this is taken away.

 

[Petrodus]

I also listened last night and disagree on two contentions:
Counter argument: Lorillard will very quickly discover (if they don't already know) that vapers are not smokers - the brand loyalty is not there and repeat business may be much lower than desired, as vapers seek better options that fulfill their needs/wants in an e-cigarette. After discovering that they are losing current customers to a very lucrative secondary market, they will have two options - destroy the market so no one benefits or buy into it and profit from both the primary and secondary markets. If you were a business owner, which would you choose?

First impression would be to buy into the secondary market and benefit from both markets.
HOWEVER ... ONLY if I wouldn't have to enter a new fight with the FDA.
If so ... Destroy the secondary market.

 

[morri]

I just read that if every cigarette smoker in America smoked ONE less cigarette a day, the tobacco business would lose from one to two BILLION dollars a year. Imagine then, what kind of threat we are to them.

 

[kristin]

I think prices will go up because Lorillard has effectively guaranteed tobacco taxes, no?

No. Not all tobacco products are taxed at the same rate as cigarettes. Higher cigarette rates are justified by the government because of accepted studies that show cigarettes are a high health risk and a burden on society. There is no such evidence about e-cigarettes to justify higher taxes than regular sales taxes.

Also how will they survive if they dont eliminate the juice supply?

How are all of the other primary market e-cig companies currently surviving with the availability of refill liquids? Apparently, most e-cigarette users use primary market devices and are perfectly happy with them. The secondary market is much smaller and even that doesn't make all e-cigarette users happy. I estimate about 25% find "something missing" with any and all e-cigarettes and still use some form of tobacco.

These are the kinds of things that the tobacco industry will be very interested in hearing and once they are aware, it opens up a whole range of possibilities rather than being stuck with the basic mini and carto to sell. Vapers can be proactive and urge the tobacco companies to look into these things and not alienate a potentially vast secondary market - but it would take them getting over the belief that the tobacco industry is only out to screw them over.

 

[kristin]

First impression would be to buy into the secondary market and benefit from both markets.
HOWEVER ... ONLY if I wouldn't have to enter a new fight with the FDA.
If so ... Destroy the secondary market.

I don't believe they'd be able to destroy the secondary market anymore than they've been able to destroy RYO, counterfeit and black market cigarettes. They'd be smarter to include refill liquid in their negotiations from the get-go.

If they can't figure that out themselves, then CASAA's mission remains fighting legislation that would endanger the availability of effective and affordable smoke-free alternatives and destroying the secondary market would be in direct conflict with that mission.

As smokers, most if us were so demoralized, so beaten down and even convinced we were the horrible people the ANTZ said we were that it took out any fight we had against anti-smoker laws. We felt we couldn't justify our "nasty, filthy habit that endangered bystanders." The tobacco companies were in the same quagmire.

As vapers, we don't have that moral dilemma. We WILL fight for ourselves this time - as we have been.

I just read that if every cigarette smoker in America smoked ONE less cigarette a day, the tobacco business would lose from one to two BILLION dollars a year. Imagine then, what kind of threat we are to them.

All the more reason to make their e-cigarettes a satisfying and affordable option for smokers. Right now, blu does not pose much of a threat, because many, if not most, smokers find the mini unsatisfying and a PIA to use and return to smoking or turn to the secondary market.

 

[Petrodus]

The war against e-cigarettes (on one front or another) continues ...

Personally, I'm looking forward to listening to VP Live when they have
Jason Healy (owner of Blu Cigs) as a guest.

Not that I am gullible, and will blindly believe everything he says,
but it will be very interesting to hear what he says.

 

[NC_Fog]

Jason Healy is just gonna say whatever Lorrillord tells him to say. He is now just one of their puppets.

 

[kristin]

For the record - my posts here have simply been to get people to slow down a bit and not panic. I'm by no means suggesting that this move is guaranteed to be wonderful and that BT is our great friend now. Honestly, I haven't made my mind up and I do have the same concerns many of you have. It could go either way and these are just some of my own personal thoughts as a vaper, not as CASAA. My points are not at all indicative of what CASAA as an organization is planning and certainly NOT to suggest that CASAA is all "rah-rah Big Tobacco" now. CASAA is approaching this cautiously and should have an official opinion out about it soon. This whole thing scares me, too, but I'm trying to stay calm and rational and be as optimistic as possible.

 

[DC2]

This whole thing scares me, too, but I'm trying to stay calm and rational and be as optimistic as possible.

If we don't stay calm and rational, we have no chance to fight anything that needs fighting.
And if we give up and go scurrying off into our little holes, then we are really done for.