George Soros, Michael Bloomberg, Bill Gates and many others have committed financial resources to persuade the Food and Drug Administration to reclassify e-cigarettes as tobacco products, in order to ban the sale of traditional cigarettes to minors and to mandate stricter safety regulation. But it looks like there is one company that isn’t afraid to profit off of it: the $4.4 billion Stratos Group, which provides electronic-cigarette brands to America’s big tobacco companies, such as Altria and R.J. Reynolds.
Just last week, Stratos reached a deal with Illinois company FreedomLine Vape Co, to create what is essentially a more potent version of Nicorette gum—one that is engineered to deliver nicotine in a non-appealing state. According to the e-cigarette designer Lorin Hedelius, the company and FreedomLine Vape developed a flavor called Nicotine DM as a response to FDA regulations and criticism that the competition’s liquid flavors tasted too sweet.
“We have come up with a flavor that is in most of the same general areas of sweetness and bitterness,” says Hedelius. Unlike Nicorette gum—which contains the addictive glycerin compound as well as an ingredient that stimulates the taste receptors in the mouth—Nicotine DM contains two active ingredients that don’t induce as intense an opioid sensation: a corticotrophin releasing hormone, or CMRH, and a compound called dopyrin.
It should be noted that FreedomLine Vape Co’s website reveals that it has one e-cigarette product, Cherry Rush Vapors. Despite it being billed as a “modern, fun, fully flavored, e-candy” item, Hedelius says that Cherry Rush Vapors is really the company’s only offering (though it can be purchased for vape manufacturers).
Stratos Group, on the other hand, produces around 50 e-cigarette products. “And they’re all different flavors,” Hedelius adds. It’s not yet clear whether Stratos’ 50 flavors will all be sourced from FreedomLine Vapors or whether the 50 Vapor Masters pack from Stratos includes a different variety. (FreedomLine Vapors has not responded to a request for comment.)
This is all part of the industry’s ambition to cater to different tastes by creating more varied flavors of vaping devices, says Evan Morris, an associate professor of global and comparative marketing at the University of Michigan’s Ross School of Business. While Morris doesn’t believe it’s a wise business decision, Hedelius believes that it was a winning strategy for FreedomLine Vapors.
“FreedomLine Vapors took the desire to improve flavor and slapped it on a product that wasn’t even the flavor that it was sold as being,” says Hedelius. “We decided to introduce a natural, natural flavor.” Now FreedomLine Vapors customers can simply choose from a wide variety of flavors, such as lemon and lime, cherry and blackberry, strawberry and strawberry, or grape and caramel. Hedelius expects that the novelty of Natural Cherry DM will not only attract Cherry Rush Vapors’ current fans, but also draw new customers and “come-and-get-it” customers who previously preferred plain liquid flavor.
Stratos Group has worked for an array of cigarette companies since 2000 and, Hedelius says, “they approached us with their desire to license our technology and control their supply chain.”