Turning Point Brands, Inc. (NYSE: TPB) is buying the cigarillo company Unitabac, LLC. The purchase includes cigarillo products and all related intellectual property, including Cigarillo Non-Tip (NT) Homogenized Tobacco Leaf (HTL), Rolled Leaf and Natural Leaf Cigarillo Products. The terms of the deal were not disclosed.
Cigarillos are typically short, narrow cigars. Unlike cigarettes, cigarillos are wrapped in tobacco leaves or brown, tobacco-based paper. Blunts are standard-size cigars that are hollowed out and filled with cannabis. Several cannabis companies have begun to cater to a smaller blunt option like a cigarillo size.
“We are incredibly excited to welcome the Unitabac cigar brands to the Turning Point Brands family,” said Larry Wexler, CEO, Turning Point Brands. “Industry analysts have highlighted that the multibillion-dollar cigarillo market growth is being fueled, in part, by the rapidly expanding movement toward cannabis legalization. Gaining access to Unitabac’s product portfolio provides us with the necessary assets to build a more competitive platform to participate in this large and growing market. Our intention is to leverage both the Zig-Zag tobacco brand strength and the extensive reach of our retail distribution platform to further penetrate the cigar category by introducing new line extensions under the Zig-Zag tobacco brand and expanding the reach of the Unitabac cigar products.”
The acquired brands compete in three core segments: Trivo, Hype and Hi-Fi within the Cigarillo NT HTL segment; Cloud9 within the Natural Leaf Cigarillo segment; and Badlands within the Rolled Leaf segment. These cigars are all Grandfathered Products or subject of Substantial Equivalence Reports in place with the U.S. Food and Drug Administration (FDA).
“Turning Point Brands’ deep knowledge of the evolving consumer experience, coupled with the Company’s sales and marketing leadership, make the team an ideal partner for Unitabac,” added Rush Patel, Founder, Unitabac. “With Turning Point Brands’ competitive advantages, grounded in superior marketing and distribution reach, I am confident our portfolio of products and brands developed over the past decade will continue to flourish under its forward-looking stewardship.”