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Last Updated on December 1, 2017 by Team Spinfuel
Does Smoke Juice Have A New Meaning?
For the past few days we’ve received several emails from our readers asking us what we thought about the Johnson Creek and Republic Tobacco partnership. Because we’ve written extensively about Johnson Creek’s products there seems to be an interest out there as to whether our position, or our opinion of Johnson Creek has changed. I would like to address those emails today in this column rather than answer each email individually. So if you have a few minutes, grab a cup of coffee or a Diet Coke, refill your clearomizer, and read on…
Republic Tobacco Buys 50% of Johnson Creek Enterprises.
If you haven’t yet heard, Johnson Creek, makers of some of the best e liquids in the world, last week announced that Republic Tobacco had taken a 50% stake in the company. In the simplest terms possible, Republic Tobacco now owns half of Johnson Creek. The other half of JC has been retained by Christian Berkey; the founder of Johnson Creek.
Republic Tobacco will take over all of the distribution of Johnson Creek’s “smoke juice” and other products, and both parties claim that Johnson Creek’s presence in the retail market will become much greater because of it. The expected expansion of Johnson Creek, to meet the new, higher demand for their products, will produce some 15 to 20 new jobs at the manufacturing plant in Hartland Wisconsin since they will be adding a third shift to the factory line. Johnson Creek also expects gross sales to jump from 16 million dollars in 2013 to 25 million this year, not all of the increase due to Republic however, since it is already mid-March.
All of this sounds wonderful for Johnson Creek and its customers, which includes myself, and most of the staff, but I am concerned about it. From a strictly business POV it makes sense for Johnson Creek to do this kind of a deal, and Republic Tobacco does distribute some major convenience store products, like rolling papers, Drum tobacco, and other “roll your own” cigarette products.
Oh wait. That’s it.
Republic Tobacco is in the business of distributing the very thing we vapers have gotten away from, tobacco, in addition to selling what can only be considered as ‘paraphernalia’ for marijuana users. Since I haven’t smoked dope in decades and wouldn’t want to be caught dead with a pack of rolling papers in my back pocket I can’t help but see Johnson Creek in a different, somewhat tainted new light.
Is that fair?
From the beginning of my own adventure into the world of electronic cigarettes I have always held the utmost respect for Johnson Creek. They were, and for the time being remain, that shining light of sophistication and class among all the e cigarette and e liquid companies I know and love.
That shining light is just a bit duller this morning, and I admit that it is my own bias against tobacco that makes it so. I believed Johnson Creek was better than that. I believed that when the time came for Johnson Creek to divest themselves of some of their own equity in order to expand that they would be somehow more selective in the choices for a new, equal partner.
All Companies Do It
Well, not all companies sell 50% of their equity in one fell swoop, but the practice of selling off some ownership in order to grow the company is common practice. In the cold light of ‘strictly business’, perhaps Republic Tobacco was the best deal around, but since I’ve reached the age I am, unable to think in a ‘strictly business’ fashion goes a long way to explain why I’m not typing this from a yacht anchored in Palm Beach. I’ve walked away from deals in the past over something as small as the way the other person treated his cat. So what do I know?
For me to be critical of this new partnership when I don’t know the details or the financial condition of either company, or where these companies plan to take Johnson Creek, it’s not only unfair to both companies involved, it usually backfires on me when I do, because the details start to emerge and its spun in a way that makes my criticism seem misplaced . So, I’m not being critical, not really, I’m just voicing my concern and, more importantly, my disappointment, along with crossed fingers in that this will be a good thing for all involved.
Vaping is NOT Smoking
There is something much bigger than Johnson Creek or Republic Tobacco at play here. It’s the whole idea that vaping is far removed from smoking. Today, that distinction is a little harder to justify.
Spinfuel eMagazine has been spouting the line that ‘vaping is not smoking’ since our inception, and we’ve worked really hard to try and make people see the difference, people out there in the world tend to see vaping as ‘just another way’ to smoke.
Seeing Johnson Creek climb into bed with a tobacco company is going to make it harder for us, and other pro-vaping people and groups, to support that position when the opposition can come back and say that if vaping was so different than smoking, why does a tobacco company own one of the biggest e liquid manufacturers?
Of course, Johnson Creek’s ‘partnership’ with Republic Tobacco isn’t the only e cigarette + tobacco company acquisition. Lorillard bought Blu Cigs, and Swisher and a few others have gotten in the game as well. Still, this is the first “e liquid” company to be purchased by a tobacco company, and that does make a difference.
There is a reason we call products like Blu Cigs ‘cig-a-likes’. It’s because they look and act like cigarettes. Seeing someone on the street vaping a Blu next to a person smoking a cigarette you could easily make the mistake that the Blu user is smoking. That is hard enough to justify our belief, but now… even with our larger batteries and fancy tanks, the liquid we vaporize will come from a tobacco company, at least partly.
Let’s face it, when you buy a bottle of Johnson Creek’s Makana you’re buying the bottle from Republic Tobacco company just as much as you’re buying it from Johnson Creek. I don’t know how I feel about that…yet.
Will Details Matter?
In this case, I don’t see how the details of this acquisition matter when it comes to another tobacco company buying up a company doing business in the electronic cigarette industry. There is no way of getting around the fact that every bottle coming from the Hartland Wisconsin plant is going to have the words “Distributed by Republic Tobacco”, how easy will it be now to claim that there is an ocean of difference between vaping and smoking?
Conclusion
Far be it from me to criticize a company for wanting to be more successful, or to make strategic alignments with other companies that can help grow the company quickly. Soon you’ll be able to pull up to a 7-11 and pick up a bottle of KILN HOUSE Genuine No. 22, a can of beer and a candy bar. It sure is easier to do that then place an order on a website and wait for the mail. But is it wiser? Only time will tell, but it doesn’t look good from where I’m standing.
With the stroke of a pen the argument that vaping is not smoking got harder to make.
