Expansion of Celebrity Investment in Nicotine Pouches
With nicotine pouches gaining traction, some American companies—especially in tech—are distributing them to employees as productivity boosters. A startup, Seshu, is now broadening its celebrity investor base in hopes of aligning with a major industry player like Zyn.
Seshu, branding itself as one of the few pouch producers without Big Tobacco backing, recently announced that Grammy-winning artist DJ Khaled has invested and will promote a new raspberry lemon flavor. He’s joining a roster that includes well-known figures like Ashton Kutcher, Post Malone, Lance Armstrong, country star Zach Bryan, and electronic music stars like Diplo and The Chainsmokers.
The influx of celebrities is part of a larger $40 million fundraising effort, which also includes investment from firms like 8VC and jerky giant CEO Troy Link.
Yet, looming behind this enthusiasm is the cautionary tale of Juul, an e-cigarette company that experienced a drastic management shakeup amid numerous lawsuits claiming it targeted teenagers. Public scrutiny has heavily focused on Juul’s aggressive social media strategies involving influencers.
Seshu has stated its intent to learn from Juul’s missteps, with a spokesperson citing the company as a “lesson learned for the entire category.” They emphasize that their celebrity partners are all over 30, ensuring they reach the right audience. None of the involved stars were available for comment.
“We’ve built Sesh differently: no TikTok, no imagery aimed at minors, and we insist on age verification at every purchase point,” the spokesperson stated. “Our partners share our mission; they aren’t just influencers trying to engage young audiences.” DJ Khaled, known for his numerous hits and collaborations, showcased Sesh in a recent Instagram video, racing a jet ski to deliver the product to a coastal mansion.
Interestingly, while many in Silicon Valley avoid traditional tobacco, corporate employees in tech and finance seem to favor these nicotine pouches to enhance their concentration at work.
The pouches, roughly the size of a thumbnail, are placed between the gums and cheeks, similar to chewing tobacco, but without any tobacco content. Priced between $5 and $7, the pouches contain “synthetic nicotine” and “food-grade ingredients.”
Sesh made headlines earlier this year when companies like Palantir—whose co-founder is also tied to 8VC—installed vending machines filled with Sesh products in their offices.
A report from Global Markets projects the nicotine pouch market will leap from nearly $10 billion this year to an impressive $56.7 billion by 2035. Last year, Zyn held a hefty 26% market share, while Sesh didn’t even break into the top 15. Although Sesh leaders haven’t disclosed specific revenues, they noted a staggering 533% increase in first-quarter revenue year-over-year.
Co-founder and CEO Max Cunningham, believing in the potential of nicotine pouches, quit his liquor sales job and flew to Sweden to meet with the “godfather” of nicotine pouches, Thomas Ericsson, to explore new product formulations.
Cunningham referenced how he entered this industry back in 2021, long before nicotine pouches gained their current popularity. “My aim was just to bring this product to market,” he explained.
As Sesh attempts to carve out its niche, it faces challenges like New York State’s new “bro tax.” This would apply the same hefty 75% tax on nicotine pouches as is imposed on cigarettes, potentially making them prohibitively expensive for teens.
The term “bro tax” stems from the popularity of these pouches, particularly among men. While convenience stores and business organizations have criticized the tax, public health advocates support it as a measure to prevent smoking among youth.
“The proposals introduced by the Governor are practical steps aimed at enhancing public health, combating the tactics of major tobacco companies, and bolstering protections against dangerous products,” said a representative for Governor Hochul.
Cunningham voiced concerns that other states might adopt similar legislation. “I get the need for revenue, but I hope it won’t hinder the growth of this category,” he noted.
Previously, the FDA had permitted Zyn to market its product, which is considered less harmful than traditional cigarettes. Meanwhile, the agency recently stated it wouldn’t prioritize enforcement against pending nicotine pouch companies.
Although Sesh has obtained marketing authorization, it is still waiting for FDA approval to sell its pouches. Cunningham expressed anxiety about this, having invested $15 million from the $40 million raised towards achieving FDA clearance.
Sesh positions itself as a balanced alternative in the nicotine market against other major tobacco companies that have introduced their own nicotine pouch products. Cunningham asserts that Sesh’s pouches provide a steadier release of nicotine compared to the more immediate spikes associated with Zyn.
“I believe these products are vital. They’ll be beneficial for public health,” Cunningham asserted.
However, Dr. Michael Fiore, co-founder of a tobacco research center, previously indicated that many tech workers might not be users and that the pouches could lead to addiction among new users.
Big tobacco players, including Philip Morris International—the owner of Zyn—have begun diversifying their nicotine pouch offerings.
A spokesperson from Philip Morris mentioned, “Strong category leaders naturally draw attention and competition. We support adding better options for adults over 21 who continue to use nicotine, as long as they’re marketed responsibly.”
Cunningham clarified that Sesh has not entered formal marketing agreements with its celebrity backers. So far, the primary focus has been on collaborating with retailers, which he believes lends credibility and helps in establishing connections with potential partners. “It’s more organic than anything. If they’re genuinely using a product, I’m optimistic it’ll garner notice,” he remarked.
At the same time, Juul is re-emerging with new approvals aimed at assisting with smoking cessation.
