It could be said that Kaizad Hansotia was always meant to be an entrepreneur. Born in Bombay, India, and raised in Hong Kong and London, the worldly young man immigrated to the United States with his family at the age of 13 already confident that his future was set. "My father owned companies all over the world," he says. "He was the largest watch distributor in the U.S., so after I finished high school in Miami, I went to work with him in the watch business" .

But fate had mapped a different path for Hansotia. While at the beach on a trip to India in 1989, he spotted two gentlemen rolling cigars. "I started talking to them and ended up buying all of their production-a couple hundred boxes-and their company, Gurkha, for $149," Hansotia recalls. "Originally I bought the cigars to give away as corporate gifts to our watch clients, but what happened was that they loved them so much they started sending me purchase orders." Having no real knowledge of the cigar business, Hansotia pursued the enterprise nevertheless. "I enjoyed it," he says. "So I left my father's watch business. He thought I was nuts. He said any kind of alcohol or tobacco business would be hard to penetrate because of the giants in the industry, but I told him, "I don't want to compete with Imperial Tobacco-I want to do something no one has done.'"

He wasn't kidding. With only two major prestige brands-namely, Davidoff and Dunhill-out there, Hansotia set out to best them. "I thought, What's the first thing I have to consider? The packaging,'" he says. "It needs to be attractive." He addressed that matter by creating extravagant containers, such as hand-finished boxes made of mango wood and individual glass tubes with copper colored melted wax seals, a strong contrast to the typical paper boxes in which most cigar brands were being offered.

"Then I went for the best tobacco I could find-one bale here, two there, enough to make a few thousand cigars at a time. People would scoff, but I wanted the cr?me de la cr?me de la cr?me. So I started making limited runs of a few hundred boxes." Next he took them around individual stores, where customers were allowed to sample them. "They were dumbfounded when they tasted the difference between regular cigars and super-premium cigars," Hansotia says.

But he didn't stop there. Though he admits he had "no clue" about the cigar business at the beginning, he did know that historically tobacco had been imported on ships, in empty rum barrels, a process that inadvertently infused the cigars with rum flavor. "I took that one step further and used cognac," he reveals. And not just any cognac: In 1996, Gurkha's HMR (Her Majesty's Reserve) became the world's most expensive cigar, flavored as it is with Louis XIII French cognac (which, in case you haven't bought any lately, runs about $1,200 a bottle). A box of 20 runs $15,000 and the company produces only 30 boxes annually, most of which are snapped up by Fortune 500 CEOs, A-list Hollywood stars and assorted other select cigar aficionados with an exorbitant amount of disposable income and impeccable taste.

Gurkha (the name is a tribute to British Army units, the Brigade of Gurkhas, composed of Nepalese soldiers who would make their own cigars from the local crops of tobacco) is still a small company by industry standards, though today it has expanded to include two dozen varieties of cigars as well as its K-Series, comprising 13 flavors of cigarillos-everything from cognac to passion fruit to kiwi vanilla-and even super-premium ground coffee and espresso beans. But small was Hansotia's intention from the start. "The whole idea was always to be a boutique company," he explains, using the auto industry as an analogy for his philosophy. "You have your GMs and your Fords, and no one is going to touch them; they're giant conglomerates. Then you have premium cars, like Mercedes and BMW. And then there is the most prestigious automaker, like Rolls Royce or Ferrari-Rolls Royce makes about 400 cars a year, but they always sell out. That's what our company is like. Every one of our cigars is pre-sold. And people collect them. Gurkha is a lifestyle. It's a feel-good product that gives you two hours of absolute bliss." And he's not just blowing smoke.