Cannabis Execs On Vaping Illnesses: Black Market To Blame

As of Oct. 1, 1,080 cases of vaping-related illnesses have been reported in the U.S., according to the CDC.

Forty-eight states and one U.S. territory have announced cases of lung disease associated with vaping, and there have been 19 confirmed deaths, with the latest being a 17-year-old boy in the Bronx, New York City whose death was reported Tuesday.

Although research has not yet found a specific chemicals responsible for the outbreak, the CDC is recommending a halt on all vaping consumption while an investigation is ongoing.

While the Trump administration announced a plan to ban all flavored e-cigarettes from the market, some states like Massachusetts have banned vaping sales altogether in response to the public health concerns.

Of 578 patients with information on the substances they used, about 78% reported using THC-containing products, and 37% reported exclusive use of THC-containing products, the CDC said.

A recent NBC News investigation found toxic substances like hydrogen cyanide and vitamin E acetate in 13 out of 15 THC products purchased on the black market in California.

The same research found no toxic substances in three legal products that were also tested.

As the situation escalates and physicians remain in the dark as to the scientific reasons behind the epidemic, Benzinga reached out to two of the most prominent legal vaping brands for their take on the subject.

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TILT Holdings COO: No Dramatic Effect On Sales

Tim Conder, COO of TILT Holdings (OTC: TLLTF) said his company has not seen a decrease in sales since the so-called “vaping crisis” became publicly known.

TILT owns and operates Jupiter Research, a brand that sells and develops vaping products, including THC-filled cartridges.

TILT generates over 70% of its revenue from vaping equipment and oils since the acquisition of Jupier in early 2019, according to a recent report by MJBizDaily.

This level of exposure to the vaping market puts it second only to Greenlane Holdings GNLN, which reported $181 million in annual revenue, with 80% coming from the vaping industry, versus TILT’s $98 million.

“The most important thing is to continue to offer our highest standards from manufacturing on our end and then to provide transparency into that process for our customers,” Conder said.

Consumers should “demand transparency throughout the supply chain” and have an understanding of where the hardware is manufactured and under what guidelines the cannabis extracts have been produced, he said.

The company is not expecting these events to heavily affect the development of the cannabis vaping industry in the long term, the COO said.

“From our perspective, we foresee a very robust vaping industry from the cannabis end, and we look forward to the growth of that part of the market,” Conder said.

The biggest takeaway from the outbreak of lung illness will be the strengthening of brands and operators that have the tightest adherence to safe production practices, accompanied by an understanding of the importance of regulation to ensure consumer safety, he said.

Ionic Brands CEO: Pay Attention To Ingredients

The overall industry has seen a decrease of between 15% to 18% in sales of legal vaping products for recreational use since the outbreak of vaping related illnesses emerged in August, Ionic Brands Corp (OTC: IONKF) CEO and Chairman John Gorst told Benzinga.

The Headset platform is showing a decline of cannabis vape sales of 5.1% in California and 6.2% in Colorado.

Between 75% and 80% of the lost vape share is going to flower, which has seen sales increases of 3.8% and 5.1% in California and Colorado, respectively, according to MJBizDaily.

Ionic Brands has not yet seen these numbers reflected in its own sales in most of the states where it operates, Gorst said.

“The black market is probably going to be the one that’s impacted the most by this information,” he said, adding that an underregulated market is the main culprit of the lung disease outbreak.

“Anytime you have unregulated markets, you’re going to have a higher percentage of bad actors and people that are not following the rules.”

In order to ensure the safety of its products, Ionic has partnered with Lucid Green and other providers to supply customers with updated lab information on the chemical composition of each product, including ingredients, cannabinoids and possible toxicity. This gives consumers a full insight into the safety of the product they’re using, Gorst said.

“Inhaling any type of products in your lungs is not exactly healthy. But we believe that vaping with a reputable company is still safer than smoking flower,” the CEO said, adding that he is advising consumers to stay vigilant for black market products from unlicensed sellers.

See Also: What Cannabis Advocates And Activists Are Saying About The Vaping Crisis On Social Media

Safeguarding In The Legal Industry

Both execs said they're confident that buying legal products from reputable brands at licensed retailers should guarantee a safe vaping experience.

Cannalysis, a California testing lab, recently developed a new method for identifying vitamin E acetate, which is believed to be one of the main agents responsible for the vaping-related illnesses.

The response to the illnesses has been almost too reactionary and alarmist, said Swetha Kaul, Ph.D, Cannalysis' chief scientific officer.

The California Department of Public Health recently issued a statement urging citizens to refrain from vaping altogether.

Legal brands are taking the right approach to the recent outbreak, Kaul said.

Many licensed operators showed immediate interest in testing for vitamin E acetate after the compound was identified in 55% of the initial cases, she said.

"The legal cannabis industry has extremely rigorous testing requirements. In California, we are required to test cannabis products for heavy metals, pesticides, residual solvents, microbial contamination, water activity, moisture content and foreign materials. These testing requirements mean that legal cannabis in California is safer to consume than some fruits and vegetables."