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April 28, 2012

Leading Ecig Brand Blu Cigs Acquired by Lorillard, Inc.

Blu Cigs Acquired by Lorillard, Inc.

Some great news for leading ecig brand blu Cigs. On April 25th, they were acquired by Lorillard, Inc., one of the oldest and largest companies in the United States.

Lorillard's subsidiary, Lorillard Tobacco Company, is the third largest cigarette manufacturer in the U.S., so it goes without saying that their experience and investment capabilities can certainly take blu Cigs to the next level in the ecig industry.

Lorillard Acquisition of blu Ecigs Good for blu Cigs 

Having access to the kind of financial capitol a large company like Lorillard has can definitely help an electronic cigarette company like blu Cigs, especially when it comes to product research and development, product marketing, and product distribution.

Of the recent acquisition, Jason Healy, President and co-founder of blu Cigs, had this to say:


"This is a very exciting move for me and my team. I am particularly excited about what this means for the brand and our customers. It gives us access to the tremendously experienced team and resources as Lorillard and will allow us to move to the next level on our expansion and product development. I'm happy to say that now as part of Lorillard, blu ecigs will be able to deliver an even greater level of quality and innovation to its customers that they have com to expect from blu. I can't wait to get started on this next phase and to see the response from our amazing customers."

Along with the acquisition announcement, blu also wanted to extend a huge "thank you" to all of the blu Cigs customers for their support and loyalty to the blue Cigs ecig brand, and added:

"We can't wait to serve you in the future as we continue to grow and unveil  new products and services. From an operational point of view, it will be business as usual for our customers, retailers and other partners through a normal transitional period."

Blu Cigs Acquisition Also Good for Lorillard

Lorillard paid $135 million in cash in order to acquire blu Cigs. Lorillard manufactures the Newport brand of tobacco cigarettes, which dominates the market for menthol cigarettes (popular among young smokers). So this acquisition is good news for Lorillard as well, especially since their cigarette sales (and those of the other tobacco cigarette brands) have been falling in recent years due to the introduction of electronic cigarettes, which are vastly superior to tobacco cigarettes.

In addition, a weak economy and unemployment have negatively affected overall tobacco cigarette sales, so acquiring blu Cigs was a indeed dandy choice for Lorrillard.

Good News for Vapers and the Ecig Industry?

We think it is. Ecigs offer many benefits when compared to tobacco cigarettes, such as: no smoke, no tar, no odor and no carbon monoxide. Plus, they're a lot cheaper! This acquisition gives blu Cigs the opportunity to lead in the development and advancement of ecig technology, and take the ecig industry as a whole to new levels.

Blu Cigs is the leading electronic cigarette company, and has the highest brand awareness and customer loyalty. In addition, they use only vegetable-based U.S. made ingestible ingredients, which no doubt gives them a great advantage when it comes to possible future regulatory oversight.

The bottom line is that blu's acquisition by Lorillard Tobacco Company will further accelerate the ever-increasing growth of the electronic cigarette industry as a whole, and thus, lead to better, safer, cheaper and more awesome ecig products and accessories.

And with a large, successful company now on the side of the ecig industry, a company with vast regulatory experience and sales expertise, the ecig industry as a whole is sure to have many more growth opportunities in the future than it would have had were it not for a heavy-weight throwing themselves into the ring.

My Concerns Regarding the Lorillard and blu Cigs Acquisition

With this acquisition, I do, of course, have a few concerns. One of my main concerns is that large companies like Lorillard (and the others who are sure to join the ecig party soon) will eventually lobby and pressure government to pass regulations that will make it virtually impossible for all but the largest and richest companies to meet, implement and follow. This happens ALL THE TIME in the business world. It's how BIG companies keep small companies from competing with them. And it sucks!

So I wouldn't be surprised if we see some new (and somewhat ridiculous) regulations enacted in the next few years...or sooner. My hope is that the free market will continue to regulate ecigs, just like it has done for the past several years, without problem or incidence. But that seems somewhat unlikely to me.

And while some industry regulations are good, many, many are not. Bottom line, regulations are NOT your friend. The free market is! And it's proved itself to be so, time and time again all throughout history. My big worry is that, with big tobacco on the scene, more chemicals will be added to ecig e-liquid, and the tobacco companies will use their massive political and social influences to negate many of the positives the ecig industry has given all of us thus far.

To me, it's a toss up. And it all hinges on whether or not Lorillard chooses to do the "right" thing. And that's a somewhat scary situation, IMHO. Bottom line, regulations are NOT our friend; the free market is! It's done wonders for us thus for...so why mess with it?!!

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