Kaival Brands (NASDAQ:KAVL) stock is generating a lot of buzz on Wall Street today. For one, Philip Morris International (NYSE:PM) just introduced an e-vapor product in Canada, which both companies have interest in. Kaival also now has an international licensing agreement with Philip Morris.
Kaival and Philip Morris are the exclusive global distributors of products manufactured by Bidi Vapor. Bidi provides vaping products for adult smokers 21 and over, including e-vapor device VEEBA.
Pursuant to a licensing agreement, Philip Morris and Kaival Brands will now distribute VEEBA in Canada. However, the licensing agreement doesn’t just cover VEEBA. It also specifies certain intellectual property rights related to Kaival’s premium vaping device — known as the BIDI Stick in the U.S. — as well as “potentially newly developed devices.”
Clearly, Philip Morris is getting serious about moving into the vaping market in North America. Today, however, the impact on Kaival Brands is immediate — and apparently quite positive.
What’s Happening With KAVL Stock?
At least for today, traders on Wall Street are largely bullish on the developments with Kaival Brands. As of this writing, KAVL stock is up 6% on heavy trading volume.
This makes sense, as Kaival Brands is a tiny company with a market capitalization of around $42 million. Meanwhile, Philip Morris is a well-capitalized tobacco giant with evident plans to expand its presence in the vaping market.
So, having Philip Morris as a partner is a major coup for Kaival Brands. The company’s President and COO Eric Mosser is “excited to support PMI’s efforts to provide a range of alternatives compared to cigarettes.”
Granted, the KAVL stock bulls still have some catching up to do. After all, shares were significantly higher a year ago. Still, the licensing agreement with PMI and the launch of VEEBA in Canada are undoubtedly welcome developments.
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On the date of publication, David Moadel did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.