Will 2018 Be The Year of The Buyout?

In the fight for survival of the fittest, we may be familiar with the food chain diagram. The one that shows small organisms at the bottom being eaten by larger ones above. They are fodder for yet bigger animals until we get to the apex and arrogantly think that Man is at the top of the heap.

The world of business can be just as dangerous! Small fish (businesses) can get devoured, ie, beaten, by larger ones, but sometimes they donít kill each other. They just buy the weaker one.

But it is not always the big fish that absorbs the small one! In some cases, it can be the opposite.

Consolidation!

Many predict the death of 90 percent plus of all vape industries in the years to come, with just a few large ones controlling the market. Time will tell. Some of the “Big Fish” are easy to identify since we collectively call them Big Tobacco. Altria. Phillip Morris. British Tobacco.

Just a few years ago they ignored the vape industry and chose not to play. Today, they do play and in a big way, and Altria recently invested into a large vape retailer.

North Carolina-based Avail Vapor got a “minority investment” from Altria and some speculate they will use the 100 plus retail chain to roll out new Altria products to the public. Time will tell on that, too.

Last year the big acquisition news was the purchase of wholesale giant, VaporBeast, by publicly held Turning Point Brands. As one of the major players in tobacco distribution (think Beech-Nut and Stoker’s chew) and alternative products (Zig Zag rolling papers), Turning Point paid $27 million to gain a foothold into the vaping industry.

A lesser known, but significant player is Cloudy Collabs, formerly known as Cloud Chasers, Inc. (CCI) which was acquired by the Harris Brothers from Mobile, AL.

Gary Harris and brother Cordell launched their initial business very small in 2013 and like many, started selling products to friends and family through word of mouth and swap meets.

In 2014, they opened their first retail location, Cloud 9 Vapes, and they are one of the few 24/7/365 shops in the country. They started this concept with just one location, but plan to roll it out to their others.

“We get a lot of hospital and shift workers near our main shop,” Gary Harris said, “and we have to be particular about which shops we keep open all night.”

They recently bought Cloudy Collabs, a major manufacturer of hardware and e-liquids, who they knew well, since they were one of their first customers years earlier. They have rebranded that company back to their former Cloud Chasers, Inc name. That company was neglected due to a distracted owner, so the Harris Brothers saw the opportunity and jumped on it.

“We were one of their first wholesale accounts from the beginning,” Gary Harris said, “and we’ve been using them ever since.”

In 2016, the former owner of CCI effectively “quit” his own company to pursue other areas. The brothers hated to see CCI close and since they wanted to get into manufacturing and distribution this seemed like the right opportunity.

“We approached the owner and after discussions with his partners and attorneys we put it together. It wasn’t planned, but it worked,” Harris said, “but we’re not done yet! We’re always looking for new partnerships and collaboration.”

When asked what advice they’d offer potential and pending partnerships he said, “Trust your gut and don’t be afraid to take chances.”

Read more at https://vapenews.com

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