Vaping: What do we do about it?

Vaping: What do we do about it?

The news cycle has been focused on cannabis for months now, largely related to legalization and increasing M&A, however of late, another story has circulated related to vaping. A number of deaths and sicknesses around the country have been linked to vapes, some of which are filled with THC. At Cresco Capital Partners as investors and insiders in this industry we see it as our job to dive into issues that will continue to arise as this market goes from illicit to legal and ultimately to put consumers first.

Our founder, Matt Hawkins, was on CNBC to discuss. You can click here to see how he viewed this serious issue and how we conduct due diligence in order to protect our investments, communities and consumers.

Vape Market Summary: Say no to counterfeit, home cooked carts, untested products, hackable vapes and cutting agents. 

Please read below for our abbreviated take on vape related illnesses and what is currently known about them.

What are we seeing?

The loss of at least 12 people and hundreds falling sick to what is believed to be a reaction to vaping, is a tragedy. We see this as yet another reason for legalization. Our concern is that without proper legalization oversight black market products will continue to get into people's hands. Our federal illegal environment has prevented the types of research, tracking and oversight from being done that exists for most other consumer products. This issue taking center stage could very will create a catalyst for legalization on a federal level, a significant positive.

What are we telling consumers?

First it is important to know the “Don’ts” as the industry is still in its nascent stages:

1.       Don’t buy or invest in counterfeit/illicit products or companies. Scares such as this are another reason why licensed dispensaries are so critical as they have tested, labeled, verified and lab tested products.

2.       Be cautious of utilizing products with cutting agents i.e. Vitamin E acetate or other artificial cutting agents that are commonly used by the e-cigarette industry such as PG, VG, or TEC. One way to do this is to identify products that list “non-cannabis derived terpenes and artificial and natural flavors” on the label and not purchasing unless you understand the underlying ingredients.

3.       Lab testing is critical. We wouldn’t buy/invest without a lab testing report on our underlying products and vapes. These testing requirements screen out known toxic compounds such as; solvents, fungicides, pesticides, mold, and heavy metals.

4.       We prefer to invest and utilize non “hackable” vapes. These are called closed loop vapes which means you can’t manually refill them as you can the open loop 510 thread vape cartridge which are the main expected source of recent illness.

5.       Along the same vein, say no to home cooked cartridges. We have heard of people treating these 510 carts like essential oil mixtures, creating their own kitchen mixtures. This is not the area to try homemade solutions.

 What are the facts?

The US vape market has generated $3.6 billion in sales. Vaping of cannabis oil has been occurring now for over 6+ years in semi regulated markets such as California with 100s of millions of grams of oil consumed, with small to no related issues reported. We don’t believe this uptake mechanism will go away. We do believe it needs better regulation and monitored access which is the unintended side effect of having it be illegal.

What are the regulatory dangers? 

We sat with members of the senate cannabis subcommittee last Friday. The White House is reported to be considering a ban on flavored nicotine vaping products. Because marijuana is federally unlawful, such a prohibition would not likely explicitly include vaping products containing THC, but it could include hemp-derived CBD vaping products.

Either way, we are mindful that vaping is raising public safety concerns (rightfully so!), and cannabis vaping is likely high on the radar. The effort to ban flavored e-cigarettes has started picking up momentum as in Massachusetts, Michigan, San Francisco, and Boulder, Colorado, they have banned flavored e-cigarettes. We will see what that means for cannabis, but the industry is urging policymakers to not confuse teen e-cigarette vaping with adult use cannabis vaping. 

Where we stand?

We are closely monitoring the regulatory situation and will continue to see where the dust settles. In cannabis we’ve seen sales across legal states continue to pick up year over year despite a downturn in vape sales (10-30% depending on the state) since the advent of this issue. Consumers however are simply pivoting from vape products to edibles or flower, which is the benefit of our diversified investments. 

 In summary, this is a tragic and unnecessary loss of life for those who have been touched by the illness and in our opinion a further impetus for legalization in order to ensure products we all consume are safe, non-counterfeit and contain what the labels states.

Codie Sanchez

Cresco Capital Partners

Jeff T.

Open to network with others in the tobacco and cannabis industries.

5 年

So you are saying the legal market is more trustworthy than the traditional market that propelled cannabis to state it is in now? What about the reports on legal businesses selling counterfeit vapes or paying to have lab tests fixed?

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