Chill Brands shares lost around a third of its value on Monday after the UK government announced it would introduce measures to ban disposable vapes entirely to stop them getting into the hands of children.
The news sent Chill Brands into a tailspin and they were trading down around 22% at the time of writing after recovering from the worst levels.
“Chill Brands implies it is not affected by the latest announcement because recharging ports on its products mean they are not classified as disposable,” said AJ Bell investment director Russ Mould.
“The market seems to question this logic given the fierce share price sell-off. Effectively, investors are saying there is a major risk to earnings, whether it is from Sunak’s latest announcement or the general direction of travel by the government to stop young people getting into the vaping habit.”
According to Action on Smoking and Health (AS), 7.6% of 11 to 17-year-olds now vape on a regular basis, compared to 4.1% in 2020. Health experts have publicly welcomed today’s news.
Chill Brands has developed a range of vaping products containing zero nicotine and are stocked by WH Smith, Morrisons, and Shell and BP roadside garages. Chill’s zero nicotine vapes are not designed in the garish colours associated with the explosion of use among children.
The company said they are working on a new range that will be fully compliant with incoming laws.
In response to the UK government’s ban, Callum Sommerton, Chief Executive Officer of Chill Brands, said:
“The vaping landscape is constantly evolving, creating opportunities for businesses that are able to navigate the regulatory environment. The Chill brand has gained rapid traction with the support of major retailers, and I am confident that it will continue to do so as we move forward with our plans to launch reusable pod system vapes.
“Chill Brands Group is an agile company, and we are prepared to adjust to any legislation that may be enacted. In the meantime, our existing high-puff count and rechargeable devices will continue to be sold by US and UK retailers who have demonstrated a strong appetite for products brought to market under the Chill brand.”
