Vancouver-based TAAT Global Alternatives, a manufacturer of hemp-based cigarettes, has announced that it has closed an additional private placement of $8 million by a group of private investors led by Debbie Chang. Chang is the co-founder of Horizons Ventures, which serves as the venture capital arm of billionaire Hong Kong business magnate Li Ka-shing.

“It is a wonderful validation for such prolific investors to be making a follow-on investment into TAAT as we continue our entry into the $814 billion global tobacco industry, with multiple international expansions already underway,” said Setti Coscarella, CEO and director of TAAT.

TAAT’s hemp cigarettes have been engineered to look, smell, and taste like traditional tobacco cigarettes. The product is marketed specifically as unique nicotine-free alternative to cigarettes. TAAT’s CEO and director, Setti Coscarella, was previously in an executive role at Phillip Morris.

“When companies go to investment banks now, especially at an early stage in capitalization, it can be difficult to pick up long term sticky shareholders,” Coscarella explained.

“In this particular case,” Coscarella said of Horizons Ventures, “you're dealing with long term shareholders who bought in early on Facebook and still own it all, as well as Zoom and still own it all. They bought in early on Dollar Shave Club and held it until Unilever bought it out,” he said.

Coscarella said Horizons Ventures favors TAAT because they “like the space and they like the ability for us to help solve a problem. They typically look at things that are more of a social good. And they like the fact that for our product, it's a non addictive option for smokers,” Coscarella said. Unlike vapes, which are still delivering nicotine, these hemp cigarettes help eliminate the addiction to nicotine by mimicking the experience in every other cosmetic way.

“They believe, as do I, that there is an enormous market opportunity for a product like this. The want to participate early because that’s the nature of the business they do. In China, alone, there’s over 300 million smokers. That’s more smokers in one country than there are people in the United States,” Coscarella said.

This product differs from other smokeable hemp products in several ways. Using hemp and other proprietary biomass that Coscarella declined to categorize, citing confidentiality reasons, TAAT has engineered a flavor profile “similar to if not better than tobacco,” he said. It being a hemp product, there is also CBD present in the hemp flower, which has been shown in studies to satiate nicotine withdrawal.

“From a smokers perspective, they'll feel satisfied using our product, both from a taste standpoint, from a form standpoint. And from an effect standpoint,” Coscarella said.

Coscarella shared impressive financials from TAAT’s current fiscal year, which ends October 31. In Q1, TAAT posted sales figures worth $165,000; Q2 clocked in at $685,000 worth of sales, and Q3 cleared 1.3 million. He expects that to continue to grow as the company adds more stores, states, and countries.

Earlier this year, TAAT could only be found in Ohio.

“Right now, we're in about 20 states, we're in well, over 1000 stores and we are starting to participate in a lot of trade shows,” Coscarella said, adding that TAAT also has international distribution and can be found in the United Kingdom, Ireland and Australia, with the balance of Europe coming not far behind.

Other than the fact he’s got a hot potato of a product on his hand that has the ability to secure significant capital, Coscarella wanted to make one thing abundantly clear about TAAT’s “Beyond Tobacco” cigarettes, as TAAT calls them.

“Our product is not intended to get people to enter the category,” Coscarella said. “There's almost a billion and a half smokers worldwide. We want we want to tackle the market of existing smokers. So if you don't smoke, don't start if you do smoke, you should probably quit. And if you don't quit, then you can try TAAT.”