Over the course of the last few years, the vaping industry has had its share of doom and gloom scenarios. For many business owners in the industry, it’s been a roller coaster ride. However, the September 12th announcement by the FDA was by far the most negative declaration from Commissioner Gottlieb’s administration, as he openly stated that “all options are on the table.” These options included a complete ban of flavors, online sales and/or products until Premarket Tobacco Product Applications (PMTA) approval.
But despite the initial hardline approach by the FDA, the industry will not be subject to regulatory overreach with respect to its core – flavors, online sales, and maintaining the current PMTA timeline. So, are we switching to a different kind of roller coaster? Will it be a ride with M&A opportunities and new capital entering from strategic competition? The answer appears to be “yes!” Already, Altria (NYSE: MO) is in talks to acquire a minority stake in JUUL Labs.
Additionally, as these strategic acquisitions by public companies occur, private equity capital will follow as they’ll now have a defined path to exit. Yet, for business owners, it’s not as simple as showing growth and double-digit margins. To be complementary, only the most buttoned up companies from a regulatory and compliance perspective will make the grade as acquisition candidates.
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