vaping Archives - Green Market Report

StaffStaffOctober 2, 2019
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6min2760

It’s time for your Daily Hit of cannabis financial news for October 2, 2019.

On The Site

Vape Recovery

Vape products, once considered the rising stars of the legal cannabis marketplace have struggled under the weight of the vaping crisis. Massachusetts banned all vape products for four months in order to err on the side of caution while the issue is investigated. Around the middle of August, vape product sales began dropping according to data from Headset, however, it seems the group may be slowly recovering.

Sales in Nevada and Washington both began to pick back up, while California seems to have stabilized. Most consumers are learning that the issues with vapes stemmed from products purchased outside the regulated channels. 

Canopy Growth

Canopy Growth Corporation  (TSX: WEED) (NYSE: CGC)  has completed an all-cash transaction to purchase a majority stake in sports nutrition company BioSteel Sports Nutrition Inc. The amount of the acquisition was not disclosed. The deal gives Canopy a significant entry into the sports nutrition and hydration category and lays the groundwork for cannabidiol (CBD) products to be sold in the U.S.

Canopy Rivers

Venture capital firm Canopy Rivers Inc.  (TSX: RIV)(OTC: CNPOF) completed a $10 million investment ( in TerrAscend Canada Inc., a subsidiary of its portfolio company TerrAscend Corp. (CSE: TER)(OTCQX: TRSSF). The investment includes the purchase of 13,243 units, with each unit consisting of: (i) one unsecured convertible debenture of TerrAscend Canada with a principal amount of CA $1,000, and (ii) 25.2 common share purchase warrants of TerrAscend exercisable until October 2, 2024.

In Other News

TILT Holdings

TILT Holdings Inc.  (CSE: TILT) (OTCQB: TLLTF) has negotiated an agreement with six of its remaining founders regarding the immediate forfeiture of all 60,217,088 stock options granted at the time of the merger, as well as the final separation of most of these founders from the Company. During the second quarter of fiscal 2019, the company reported stock-based compensation expense of greater than $47 million associated with these now forfeited stock options. Adjusting for the subsequent forfeiture, TILT’s Q2 2019 net loss of $48.9 million would have been almost entirely reduced, bringing the Company close to break-even. The successful forfeiture of these stock options follows the recent announcement of an adjusted EBITDA positive month of July

HeavenlyRx

HeavenlyRx Ltd. Acquired CBD company PureKana. Under the agreement, HeavenlyRx will acquire a majority ownership stake from the Company’s founding members with the acquisition expected to close by the end of 2019. Standing alongside HeavenlyRx’s high ethos and quality standards, PureKana – located in Scottsdale, Arizona – is a rapidly growing CBD brand and company with a large consumer base that leans toward a young and active demographic.

Westleaf

Westleaf Inc. (TSX-V:WL) (OTCQB:WSLFF) signed amendment agreements to two of its existing credit facility commitment letters with ATB Financial resulting in an additional $5.7 million of capital available for use by the Company. Westleaf has increased its term loan on The Plant, its fully completed extraction, manufacturing and product formulation facility, by $2.7 million and has secured a $1.0 million revolving credit facility to assist with working capital provided that any draw downs in relation thereto can only be made after final receipt of a standard processing license for The Plant from Health Canada. In addition, the credit facility related to the construction of Westleaf’s cultivation facility in Battleford, Saskatchewan has been amended to reduce its restricted cash requirement by $2.0 million.


Debra BorchardtDebra BorchardtOctober 2, 2019
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8min4690

Vape products, once considered the rising stars of the legal cannabis marketplace have struggled under the weight of the vaping crisis. Massachusetts banned all vape products for four months in order to err on the side of caution while the issue is investigated. Around the middle of August, vape product sales began dropping according to data from Headset, however, it seems the group may be slowly recovering. The following table was provided by Headset.

Sales in Nevada and Washington both began to pick back up, while California seems to have stabilized. Most consumers are learning that the issues with vapes stemmed from products purchased outside the regulated channels. 

A report from the CDC (Center for Disease Control) stated, “In addition, the report from Illinois and Wisconsin showed that nearly all THC-containing products reported were packaged, prefilled cartridges that were primarily acquired from informal sources such as friends, family members, illicit dealers, or off the street.”

It seems illicit market and unregulated vape producers were using thickening agents like Vitamin E with disastrous results. The industry, in general, has suggested that regulation will solve this issue and many are trying to convince the consumer that they can trust a regulated brand.

“The widely publicized public health issue relating to the use of liquid vapes is something that SLANG takes extremely seriously,” said SLANG Worldwide (OTC: SLGWF) CEO Peter Miller. “We encourage investigation and research into the causes of this issue and hope that our collective understanding of the results leads to more thorough and effective regulation of the industry.”

SLANG said it is not aware of any of its products being identified as a contributor to any of the recent illnesses associated with vaping technology. SLANG is not currently operating in Massachusetts and had postponed plans to enter that state. It doesn’t expect to be adversely impacted by Massachusetts’ temporary ban on vaping products.

1933 Industries (CSE: TGIF) (OTCQX: TGIFF) said, “All our branded THC and CBD vape products do not contain vitamin E acetate, vegetable glycerin, or propylene glycol. All our products are made with ingredients that are known to be safe for consumers. All packaging contains our product ingredients, which are also listed on our website. Each and every product is third-party lab tested, and the results can be tracked via a QR code.”

Testing Boom

Of course, in order to be sure testing is the best way to go and this crisis could present an opportunity for the lab group to capitalize. CannaSafe, California’s leading accredited cannabis testing laboratory said it will expand contaminant testing to Vitamin E additives, in response to ongoing concerns around consumer vaping safety. CannaSafe is the first laboratory to offer this service and will also provide testing for additional additives including medium-chain triglycerides, vegetable glycerin, and propylene glycol in the coming weeks.

“Trusted cannabis companies are taking it upon themselves to impose high-quality standards on consumer products, and we are ready to work with any business that wants to show customers that their products are free of toxic additives,” said Aaron Riley, CEO of CannaSafe. “We also urge brands and retailers to share test results with their customers as a gesture of good faith.”

Modern wellness company, dosist, is the first brand to voluntarily undergo Vitamin E testing with CannaSafe. Other brands that will utilize Cannasafe’s testing technology include Orchid Essentials, Select, Heavy Hitters, Stiiizy, King Pen, Lowell Herb Co., Pure Vape, Tikun, and Raw Garden. The Vitamin E test is available to brands and manufacturers across the state for an additional $225.

 


Debra BorchardtDebra BorchardtSeptember 24, 2019
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4min6790

At a press conference on Tuesday, Massachusetts Governor Baker said that he is banning all vaping products in the state until Jan 25, 2020. Across the country, consumers have reported vaping-related illnesses. 530 people said they have have been affected, and nine people have died. Massachusetts’ Department of Public Health said this month that all physicians must report any vaping-related pulmonary disease to the department, and the state is now tallying 61 possible cases.

Mission Dispensaries, has two current locations in Massachusetts (Georgetown and Worcester) and a third coming soon. The company’s Kris Krane, President of 4Front Ventures, which owns the dispensaries said, “The governor’s decision to ban the sale of vape products in Massachusetts is an unfortunate reaction to a genuine public health concern. Evidence suggests the overwhelming majority of vape-related illnesses have resulted from the use of unlicensed and unregulated vape cartridges obtained from the illicit market. Though he may have the best intentions, banning the sale of legal vape products produced in a heavily regulated industry will only serve to drive consumers and medical patients to the illicit market, possibly exacerbating these public health concerns rather than alleviating them. We stand behind our products and are confident the legal and highly regulated market is capable of protecting consumers.”

Many feel that banning all vape products is like throwing out the baby with the bathwater. Most of the illnesses have resulted from consumers using non-regulated and black market products.

“While the life-saving potential of nicotine vaping devices has been recognized by many public health authorities, several recent high-profile hospitalizations and illnesses have put vaping on trial, inviting scrutiny and calls for outright bans on the technology,” said Yaël Ossowski, deputy director of the Consumer Choice Center. “Contrary to the sensationalistic media reports, adults who use vaping and e-cigarettes as a means to quit smoking are vastly improving their chances of living long, healthy, and productive lives.

Canaccord Genuity analyst Bobby Burleson said, “In our view, recent reports of acute respiratory illness linked by regulators to THC vaping (and e-cigarettes) should ultimately accelerate the shift away from the black market for cannabis products in the US. The sell-off for stocks with heavy vape exposure has been severe with coverage names GNLN, KSHB, SLNG, and TILT meaningfully underperforming.”

He added, “While we are likely early days in resolving these industry challenges, longer term we expect associated revenue and EBITDA impact to our vape related coverage names to be more modest than the selloff suggests – vape is a lower margin business and THC vaping illnesses have largely been a black market phenomenon (with the exception of one case). It follows that supply chains and customer spending are likely to respond by shifting more dramatically to the tier one products and legal channels served by our coverage names.”


Debra BorchardtDebra BorchardtMarch 23, 2018
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4min22710

Canadian-based CBD manufacturer Isodiol International Inc. (ISOLF) announced that it has signed a letter of intent to acquire 100% of KURE™ Corp.  The company, a leading specialty vape retailer headquartered in Charlotte, North Carolina, calls itself the ‘Starbucks’ of the vape industry. The amount was not disclosed, but KURE reported unaudited annual revenues for fiscal 2018 of $8.8 million. The deal is expected to close by the end of April 2018.

KURE has tried to differentiate itself from other vape shops by creating the KURE Vaporium & Lounge, a retail environment, and lounge catering to the vaping community. The company operates a total of twelve e-juice bars and lounges today, with plans for international expansion.

“We believe KURE to be the Starbucks (SBUX) of the specialty retail vape industry,” said  Craig Brewer, Chairman & CEO of KURE Corp. ” With over 200,000 customer transactions per year and growing, KURE’s knowledge base in the vape industry is exceptional. In joining the Isodiol family, we will now be able to provide our devout customers the very best CBD products on the market.”

KURE specializes in the retailing of vaporizers and e-cigarettes, e-juices, and related accessories. Its products are available online and throughout its store locations across the United States. KURE Vaporium & Lounge, KURE Society, Kuriousity, Kurators are all respective trademarks of KURE  Corp. Its e-Juices can be purchased pre-bottled or freshly mixed by its staff of “Kurators”, well-trained and experienced mixologists who can “blend” over 500,000 unique flavors from the KURE Juice On Tap bar.

“KURE’s executives are highly experienced business entrepreneurs that have done a tremendous job in building the KURE™ brand,” said Marcos Agramont, Chief Executive Officer of Isodiol.  “Not only does this further entrench our footprint in the vaping and e-cigarette industry, but through KURE retail stores, the Company will set up its own distribution channels for its family of brands, including ISO-Sport and Be Tru Wellness.”

“When we acquired Bradley’s Bioscience, we were excited about the prospects of providing safer alternatives to smoking, while at the same time being able to enter a market poised to be worth over $60 billion by 2025,” said Agramont.   “With this partnership, we will further entrench our footprint in this fast-growing industry, and we look forward to the global opportunities it presents for the Company.”

Isodiol stock was lately trading at 90 cents, down from its 52-week high of $1.69.


William SumnerWilliam SumnerJanuary 25, 2018
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4min12350

Cannabis is no longer just a recreational substance. With 29 U.S. States and the District of Columbia currently with medical cannabis laws on the books, more Americans than ever are turning to cannabis as the solution to their aches, pains, and general wellness… but the question is why?

Proffering answers is an annual report published by cannabis technology company Eaze, which analyzed the consumer habits of over 15,000 survey respondents and 350,000 cannabis consumers in the state of California.

In part three of our four-part series, Analyzing Eaze Insights 2017, Green Market Report will examine the reasons why consumers are increasingly turning to cannabis to help promote their general wellness. If you’d like to catch up on the series, you can find Part One here and Part Two here.

According to Eaze’s report, one of the reasons why consumers are turning to cannabis is to help them sleep. Approximately 57% of consumers surveyed by the company reported that they use or have used sleeping pill in past.

Of those people, approximately 95% have used cannabis to help reduce their consumption of sleeping pills. Approximately 45% of those that use cannabis as a substitute for sleeping pills report to switching over to cannabis entirely.

In terms of product preference, consumers that use cannabis to replace sleeping pills prefer using flower (37%). The second most popular consumption method was vaporizers (29%), followed by edibles in a distant third (17%)

Although survey respondents were not asked why the prefer one method over another, the report authors believe that flower’s popularity is due to its fast delivery of THC; as compared to edibles, which often take an hour or more to take effect.

But consumers are not just using cannabis to help them sleep, they’re also using it to help replace bad habits. Of those surveyed, 38% said that they use or have used tobacco. Approximately 73% of those that use or have used tobacco say that cannabis has helped them reduce their tobacco consumption, and 13% of that group claim to have used cannabis to completely replace their tobacco use.

Consumers that use cannabis as a tobacco substitute overwhelmingly prefer flower (55%), followed by vaporizers (29%) and edibles (8%).

In addition to using cannabis to help make the body well, consumers are also using cannabis to help ease the mind.

Approximately 48% of those surveyed reported to use or have used anxiety medication. Out of that group, 95% say that they have used cannabis to reduce their consumption of anxiety medication and 40% of those people report that cannabis has replaced their anxiety medication altogether.

The preferred method of consumption for consumers using cannabis to replace anxiety is flower (37%), followed by vaporizers (29%) and edibles pulling in at third (10%).

Stay Tuned for Part Four

Apart from the changing markets and newfound benefits of cannabis, there is another emerging trend that stands above the rest: the explosion of women in the cannabis industry, both as entrepreneurs and consumers.

Stay tuned for the fourth and final part of our series, Analyzing Eaze Insights 2017, where Green Market Report will examine the growing power of women as consumers in the cannabis industry.


Debra BorchardtDebra BorchardtOctober 25, 2017
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3min36760

While some in the cannabis industry obsess over strains and the nuances of those flavors, the largest cannabis brand O.penVAPE has rolled out a new line of flavored vapes. The O.penVAPE ISH line was launched on Tuesday with three flavors: Bavarian Cream, Blue Raspberry, and Watermelon.

The company said that it was responding to a lot of customer feedback from people that wanted a flavored cartridge. “It appeals to a totally different market than say – the craft reserve. Plus, the addition of flavoring sets it apart in this category,” said Chris Driessen, President, Organa Brands U.S. “The customer is someone who is perhaps not a strain aficionado. It’s someone looking for rich flavor without a strong marijuana taste.”

The ISH in the new product name stands for indica, sativa, and hybrid. The indica dominant brand is Bavarian Creme flavoring, the sativa dominant is the Blue Raspberry flavoring and the hybrid dominant is the Watermelon flavoring.
O.penVAPE is known for its tight marketing and fresh packaging has refined the vape pen even more with this new product. It has a more sleek profile and now comes with a rechargeable unit instead of a throwaway battery. “The eco-friendly aspect stems from the rechargeable functionality of the pen. People love the disposable form-factor, but we hate the idea of all those batteries ending up in a landfill, so we added the ability to recharge,” said Driessen.
There certainly seems to be a customer desire for fruit flavored marijuana. High Times Magazine published a list of the top cannabis strains from the Cannabis Cup competitions a few months ago and the list contained names like Strawberry Banana, Orange Bangi, LSF Lemon Cookies, and Schlemons. Leafly’s staff picks included Tangie, which was described as a “citrus dream” and Strawberry Cough described as smelling “Like it grew wild in a strawberry patch.”

“We saw a need in the space for distillates with unique flavor profiles, and after months of perfecting the design and taste, we are thrilled with the end result,” said Driessen. “I didn’t know how much I would love these flavors until I tried them- but once I did, I was really impressed with the work of our R&D team. It’s not your typical cartridge and is definitely a refreshing take on flavored distillate.”



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