CHICAGO — Alternative smokeless-tobacco firm Black Buffalo Inc. announced it has raised $9.75 million in growth capital to increase its manufacturing capacity and marketing presence at retail locations and convenience stores nationally, officials said.
Founded in 2015, the Chicago-based firm has developed eight alternative, smokeless-tobacco products, which include five long-cut and three pouch varieties, all of which contain pharmaceutical-grade nicotine but no tobacco leaf or tobacco stem.
“Black Buffalo’s products were developed by a team that collectively dipped traditional smokeless tobacco products for over 60 years,” said Mark Hanson, co-founder and president of Black Buffalo. “Our guiding principle has always been that dipping is about much more than just nicotine delivery. It’s also about the ritual: from the crack of the seal, to the look and feel of the high-definition embossed tin, to the rich, moist flavor of that first pinch or pouch.”
Black Buffalo plans to expand its marketing presence, upgrade its manufacturing capacity, increase its online distribution and launch into convenience stores and physical retail outlets nationwide. Thus far, adult consumers age 21 and older have been able to purchase Black Buffalo’s smokeless, tobacco-alternative products online at BlackBuffalo.com.
Among its investors are Pendyne Capital, Naples, Fla.; Watchfire Ventures, Santa Barbara, Calif.; and Open Pantry Food Marts, Pleasant Prairie, Wis.
With proceeds from this capital raise, Black Buffalo has assembled premarket tobacco product applications (PMTAs) for its entire product portfolio, which the company intends to submit to the U.S. Food and Drug Administration’s Center for Tobacco Products in the coming months. Additionally, Black Buffalo has purchased and expects delivery in the second quarter of 2020 of a high-throughput pouch maker from an industrial manufacturer.
Black Buffalo’s sales have increased in 2020, with month-over-month revenue growth of 31% in March 2020 and 23% in April 2020. “One of the best parts of our initial e-commerce strategy has been having a direct relationship with our customers, whom we affectionately call ‘the Herd.’” said Jeffery David, co-founder and chief marketing officer for Black Buffalo. “[Our company] will always lead with product, but we’re equally excited about the opportunity to continue to build upon our already strong brand.”