PODA Technologies (PODA- CSE) owns a very valuable patent——THE ONLY patent protected Heat-Not-Burn system that doesn’t need cleaning.
The future of the smoking industry is smokeless products—and especially Heat-Not-Burn. ESG is here to stay folks—and the appeal of smokeless products is that they eliminate the harmful chemicals and by-products that smokers take into their bodies.
This is the biggest growth industries that nobody has heard of here in North America. In Europe and Asia it’s big—and it is about to get really big, really fast, right here, right now.
JUUL came out of nowhere with vapes to become a multi-billion company in 36 months.
TAAT-CSE came out with a nicotine-free stick and went from 75 cents to $5 in three months. Smokers want a healthier product and the stock market knows how big a market that can be.
PODA is this same kind of company. The size of this Heat-Not-Burn opportunity is stunning.
Philip Morris (PM-NYSE; $89) plans to have 50% of its revenue from smokeless by 2025…….and 100% of revenue from smokeless just ten years from now.
We are talking about a US$135 BBBBillion market cap company wanting to change ALL their customers to Heat-Not-Burn. Wow! Talk about going all-in!
And PODA has
- their Heat-Not-Burn product finished
- the manufacturing lined up and
- their patents issued.
It is the cleanest, most convenient product for this multi-multi-billion dollar market.
This market will go from zero to $50 billion in North America in just a few short years.
I thought automakers were getting serious about transitioning to electric cars, but what Philip Morris plans to do with the speed of their transition puts that to shame.
Since Philip Morris believes that smokeless will be the future ——what that means is that a smoking market that is worth $800 billion in revenue every single year is on the verge of being fully transformed.
There is no company with more leverage to this massive transformation than PODA.
PODA has built out its pilot production facility to manufacture the cigarettes that go into their Heat-Not-Burn device. It can produce 400,000 units a month now and can ramp up to even higher levels quickly.
If you are a smoker who smokes 10 cigarettes a day—or 3,650 a year–with PODA’s device you will get the same experience with every one. The flavor is always fresh. With all other options, even with all of the cleaning, that is not the case.
This is a GREAT product for consumers—it’s cleaner, and much less harmful than traditional smokes. I think the PODA device will play a big role in the big transition of this massive market.
PODA’s Different Approach
Makes It A Winner
Unlike Philip Morris and the rest of THE INDUSTRY——PODA took a different approach to Heat-Not-Burn and developed an entirely closed capsule.
The PODA device has an airflow channel where the air is drawn in from the side, drawn down into the capsule, and then out through the center of the capsule.
That completely isolates the airflow inside the stick—and there is ZERO contamination from the contents of the stick.
That’s KEY—every time the smoker uses it, the experience is EXACTLY THE SAME—unlike IQOS and any other device out there where the performance goes down steadily without constant cleaning.
Can you imagine somebody who is smoking 20 cigarettes a day, 365 days a year, 7,300 times a year——stuck in a never-ending cleaning loop?
Some people are clearly willing to do it because Heat-Not-Burn has a 25% market share in Japan already—but there is ZERO CHANCE that they are going to choose to do all of this cleaning if they could simply be using a PODA device instead.
THE INDUSTRY came at the issue trying to adapt a cigarette to fit in a heating device—while the PODA team instead focused on building the best possible Heat-Not-Burn system with unconventional thinking.
Their fresh point of view was the only one that resulted in a closed-end loop and a Heat-Not-Burn product that doesn’t require cleaning or develop a nasty smell.
Because of that PODA was able to apply for and get an incredibly broad full patent to protect their technology from competition——a HUGE WIN because they are the only company that can now have a closed-end cigarette.
CHINA IS A HUGE MARKET FOR PODA…
…AND THEY HAVE A HEAD-START
But—MY ABSOLUTE FAVORITE PART of this story—is what PODA has cooking in the 400-million-smoker-market of China. The company has partnered with Daniel Chen who already has the biggest selling alternative cigarette brand—a Heat-Not-Burn brand with herbal ingredients that are sourced from tea.
I spoke with Chen—and he loves the PODA product offering and is readying to roll it out in China as the first real Heat-Not-Burn product that the country has seen.
That puts PODA (and Chen) in the position of having:
1 – The only non-cleaning Heat-Not-Burn device
2 – In the first mover position
3 – In the biggest smoking market in the world
With PODA manufacturing in China and Japan showing how quickly smokers jump onboard the Heat-Not-Burn train I can’t wait to see what PODA can accomplish in China over the next 24 months.
PODA = Clean, Convenient
Heat-Not-Burn is about to go from 0-100 miles an hour here in North America and around the world—as Philip Morris shows.
The reasoning is very simple:
1 – It is the most profitable product to sell for THE INDUSTRY. So that is what they want to push.
2 – It is the smokeless product that is the closest thing to real smoking that you can get, so it is also the preferred choice for the consumer.
Heat-Not-Burn has been off the radar for us in North America because the FDA just recently approved Heat-Not-Burn for sale. And we can look to Japan—where Heat-Not-Burn has gone from no market share to 25% of the entire smoking market in 5 years—for what comes next.
Clearly—the consumer is ready to embrace it.
PATENT PROTECTED AND READY TO ROLL
PODA is fully patent-protected and ready to roll.
They have what I think is clearly the best solution for one of the fast growing multi-billion-dollar markets that you’ve never heard of.
You can see how big the smokeless market is for Philip Morris right from the start of their analyst day presentation for this year: Slide One—Heat-Not-Burn, Slide Two—Heat-Not-Burn, Slide Three–same thing…and on and on.
They have accepted that this is future.
Philip Morris has gone all-in on smokeless, and they are most bullish about Heat-Not-Burn specifically. They have that nagging weakness IQOS though…..you can see that through the constant hammering home of the cleaning message they do.
PODA has the only offering that doesn’t require cleaning, doesn’t smell and has the best performance.
PODA meanwhile has the Heat-Not-Burn solution—ZERO CLEANING—that everyone needs; both customers and THE INDUSTRY
DISCLOSURE: I own more than 1 million shares of PODA.
PODA TECHNOLOGIES has reviewed and sponsored this article. The information in this newsletter does not constitute an offer to sell or a solicitation of an offer to buy any securities of a corporation or entity, including U.S. Traded Securities or U.S. Quoted Securities, in the United States or to U.S. Persons. Securities may not be offered or sold in the United States except in compliance with the registration requirements of the Securities Act and applicable U.S. state securities laws or pursuant to an exemption therefrom. Any public offering of securities in the United States may only be made by means of a prospectus containing detailed information about the corporation or entity and its management as well as financial statements. No securities regulatory authority in the United States has either approved or disapproved of the contents of any newsletter.
Keith Schaefer is not registered with the United States Securities and Exchange Commission (the “SEC”): as a “broker-dealer” under the Exchange Act, as an “investment adviser” under the Investment Advisers Act of 1940, or in any other capacity. He is also not registered with any state securities commission or authority as a broker-dealer or investment advisor or in any other capacity.