Vaping-related illnesses and deaths have been gaining a lot of attention in recent months. As of Nov. 5, there have been 2,051 cases of lung injuries related to e-cigarette or vaping use that have been reported to the Centers for Disease Control and Prevention (CDC), with 39 people dying thus far.
And while the development is definitely concerning for the cannabis industry given that tetrahydrocannabinol (THC) products have been involved, it’s unlikely to have a crippling effect on the industry. Here’s why.
Problems aren’t widespread enough to suggest a serious problem with vaping products
Vaping cannabis is not a new phenomenon in the industry, and yet, illnesses related to it have suddenly popped up, without warning. In 2016, it was estimated that there were more than 2.1 million middle school and high school students vaping cannabis And yet, there was no outbreak of illnesses tied to vaping that year.
There are certainly more vaporizer users today and more companies getting involved in the segment of the market, which has led to more products being made available. This indicates the possibility that only certain types of products are at fault. That certainly seems to be the case, especially given that the majority of the vaping-related illnesses and deaths appear to be happening in the U.S. If there were truly some fundamental problem related to vaping then the issues would likely be more widespread than they are today. The CDC believes the illnesses are a result of chemical exposure and are analyzing many different types, including Vitamin E acetate, which has been identified as the probable chemical causing the health issues.
Image Source: Getty Images.
There are growing signs that the problems behind the vaping illnesses are linked to products from the black market. With less control over black-market products, there’s potential for consumers to face more risks in buying cannabis products from illicit sellers. These vaping illnesses could encourage customers to buy from the legal market. However, until there’s a definitive conclusion as to what’s behind the outbreak of illnesses, there’s a good chance more users will simply steer clear of vaping products.
There’s also the risk that states and cities could ban vaping entirely, which is what’s already happened in Massachusetts, where a ban is in effect while regulators get a better grasp of what’s going on and how best to oversee it. Even President Trump is looking at banning flavored vaping products.
Users can simply adjust how they intake cannabis
For now, cannabis users who are concerned about the outbreak of vaping-related illnesses can change how they consume cannabis. Since the outbreak began, sales data in multiple states has shown that vaping sales have declined, and that’s led to edibles taking up a bigger piece of the pie. And while that doesn’t mean edibles are seeing a significant increase in sales, it’s something that could be a possibility for users looking to ingest cannabis but wanting to move away from vaping products. For vape maker KushCo Holdings (OTC:KSHB), the company’s CEO Nick Kovacevich has acknowledged that the company has “been seeing a slight pullback in sales for the overall vape market.”
This is where a company like Curaleaf Holdings (OTC:CURLF), which has a wide variety of products, could be well-equipped to handle a change in consumers’ tastes and preferences quite well. From flowers to lotions to capsules and edibles, the company can reach a broad base of customers. However, the company has full confidence in its vaping products, noting in a September news release that it had not received any complaints about any of its products causing health problems for consumers.
What does this mean for investors?
Vaping-related deaths are definitely bad news for the cannabis industry, especially with THC products being linked to many of the illnesses. However, with the industry being as diverse as it is and with consumers having many different options to choose from, it’s not likely that people will stop using cannabis entirely. A more likely scenario is that they will go through safer channels, like buying from established brands like Curaleaf and other big cannabis companies. Alternatively, they could also opt for a safer option altogether like cannabidiol (CBD), which could benefit a company like Charlotte’s Web (OTC:CWBHF) which has a big presence in that segment of the market.
Marijuana stocks will likely be impacted by weak vape sales, but the good news is that’s something that’s likely to have a short-term impact. Once the issues surrounding vaping illnesses are addressed and consumers have a better idea of what’s behind them, vape sales could quickly recover, leading to some stronger results for Curaleaf and its peers.
David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Charlotte’s Web and KushCo Holdings. The Motley Fool has a disclosure policy.”>