PODA Offers a New Take on Heat-Not-Burn Products

Countries worldwide are adopting tobacco harm reduction policies to reduce smoking-related deaths and diseases. While smoking prevention and cessation are the centerpieces of these strategies, scientists believe that public health outcomes among smokers could significantly improve if they switch to non-combustible alternatives.

Heat-not-burn products, such as Philip Morris’ IQOS, may reduce exposure to harmful chemicals found in conventional tobacco products. While the FDA allows IQOS to make these claims, some studies suggest that heat-not-burn tobacco products are only slightly less harmful than traditional cigarettes—making them suboptimal harm reduction tools.

Poda Holdings Inc. (CSE: PODA) (OTC: PODAF) (FSE: 99L) has spent the past six years developing heat-not-burn products. Unlike IQOS and other competitors, Poda’s Beyond Burn™ products contain a unique tobacco-free blend of pelletized tea leaves infused with synthetic nicotine. The result: Consumers get the experience of tobacco without the harmful effects of tobacco.

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Innovative Technology

Poda Holdings’ flagship Beyond Burn™ Poda Pods are filled with a patented blend of tea leaves and synthetic nicotine that perfectly mimics tobacco, offering adult smokers a smoke-free alternative to their regular habit without sacrificing satisfaction. Since these pods mimic tobacco, there’s far less appeal to underage users than vape products.

In addition to its tobacco-free contents, the unique design leads to a zero cleaning experience that’s unique in the heat-not-burn industry. The compostable pods can also be adjusted to contain nearly any substance of interest, including caffeine-infused products, cannabinoid-infused products, real tobacco, or medicinal herbs.

The company has built a robust intellectual property portfolio surrounding its pods, devices, and manufacturing processes, including patents in over 60 countries worldwide. As the heat-not-burn industry grows, the patent portfolio could become a massive licensing opportunity or motive behind an acquisition by a tobacco giant.

Compelling Economics

The global tobacco market generates about $800 billion in annual revenue with about 1.3 billion adult smokers. As governments seek to curb smoking, smoking alternatives have become increasingly popular. Phillip Morris believes that heat-not-burn products could entirely replace cigarettes within 20 years.

CEO Ryan Selby discusses the company’s Advisory board

The tobacco-free nature of Poda Holdings’ products means that they aren’t subject to tobacco duties. As a result, the products can be sold at a lower price point or higher profit margins than tobacco-based competitors. At the same time, the razor-razorblade business model translates to high-margin recurring income over time.

Currently, the company manufactures and packages products in China using an extremely low-cost automated process. The small-scale pilot manufacturing capabilities alone provide more than 400,000 pods per month, while the company recently delivered an order for 500,000 Beyond Burn Poda Pods to a significant customer.

Looking Ahead

Poda Holdings Inc. (CSE: PODA) (OTC: PODAF) (FSE: 99L) offers investors a unique ground-floor and pure-play opportunity to invest in heat-not-burn products. In addition to scaling up production, the company recently hired Christoph Tepr, a Big Tobacco sales leader, to spearhead its expansion across Europe and other international markets.

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About Ryan Allway

Mr. Allway has over a decade of experience in the financial markets as both a private investor and financial journalist. He has been actively involved in the cannabis industry since its inception, covering public and private companies.