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Vape concerns vs legality

A wave of illnesses and deaths in the U.S. linked to vaping products may dampen demand for soon-to-be-legal cannabis vapes in Canada later this year, industry watchers say.

An ongoing vaping probe south of the border — where as many as five people have died and hundreds more have fallen ill — may slow sales growth in what has been one of the fastest growing categories in the industry, said Jennifer Lee, Deloitte Canada’s Cannabis national leader.

"It's going to create some hesitation in the market," she said in an interview. However, new users are more likely to be deterred than smokers who are looking to shift to reduced-risk products, Lee added.

A growing number of health and regulatory authorities in recent days have urged consumers to stop vaping until it is clear what the root cause is.

The U.S. investigation could present a hindrance, or an opportunity, for the sector, depending on the ultimate conclusion, said Michael Armstrong, an associate business professor at Brock University in St. Catharines, Ont.

"It's an opportunity for the legal producers to say, 'OK, look, our products are tested. We have consistent manufacturing processes.'... Whereas with black market products, who knows what got put into those cartridges," he said.

But if vaping itself triggers the problem, rather than a particular additive, "that would be a much bigger problem for the Canadian cannabis industry."

The string of mysterious, in some cases fatal, lung illnesses linked to vaping in the U.S. comes as Canada prepares to legalize new categories of cannabis products, including liquid concentrates for vaping, later this year.

Cannabis vaporization is gaining popularity as a more discreet way to consume pot and, similar to tobacco vapes, as a less harmful option that smoking a joint.

According to 2018 figures in U.S. states which had legalized cannabis for medical or recreational use, these devices were the second-largest category of sales at 21 per cent, behind flower at 46 per cent and ahead of edibles at 11 per cent, according to Deloitte.

In anticipation of a similar demand in Canada, several Canadian cannabis companies have struck vaping deals in recent months.

In July, Vancouver-based Auxly Cannabis Group Inc. announced it received a $123-million investment and the global licences to vaping technology under a research and development partnership with tobacco giant Imperial Brands. And in June, U.S. vape maker Pax Labs Inc. struck a partnership with four Canadian licensed producers — Aphria, Aurora Cannabis, Organigram and Supreme Cannabis — to allow them to offer their cannabis concentrates in pods that work with their devices.

But on Monday, the American Medical Association was the latest health authority to sound the alarm on vaping, urging people to avoid using the products until more information is known.

"The e-cigarette-related lung illnesses currently sweeping across the country reaffirm our belief that the use of e-cigarettes and vaping is an urgent public health epidemic that must be addressed," said the association's president Patrice A. Harris in a statement.

Health Canada last week warned of potential risk of pulmonary illness associated with vaping and urged users to monitor themselves for symptoms such as cough, shortness of breath and chest pain but said there were no cases in the country to date.

In the U.S., there have been at least 450 possible cases of respiratory illnesses linked to vaping, including at least five deaths, this year.

The Centers for Disease Control and Prevention said that "many" of these patients reported recent use of products containing THC or tetrahydrocannabinol, a compound found in cannabis that produces a high and urged consumers to steer clear of vaping until their probe is complete.

The CDC told reporters that some laboratories have identified Vitamin E acetate in some of the product samples, which will be further examined, but at this stage "no one device, product or substance has been linked to all cases."

The Food and Drug Administration said many of the samples tested contain THC and Vitamin E acetate, a substance found in topical and dietary supplements. The FDA said it does not have enough information to conclude that this substance is the culprit, but also advised against vaping for now.

"Because consumers cannot be sure whether any THC vaping products may contain Vitamin E acetate, consumers are urged to avoid buying vaping products on the street, and to refrain from using THC oil or modifying/adding any substances to products purchased in stores," it said.



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