Report: Health scares hurt vape sales

BOULDER — Several thousand illnesses and dozens of deaths were attributed to the use of electronic cigarettes and cannabis vaping in mid-2019, putting a damper on the retail momentum of products that had been some of the burgeoning legal cannabis industry’s hottest sellers.

“Cannabis Vaping: Opportunities in an Uncertain Future,” a report released Thursday by Boulder-based BDS Analytics Inc. and Arcview Market Research found that cannabis vape sales in legal markets in Arizona, California, Colorado, Nevada and Oregon dipped from $160 million in August 2019 to  $119 million in October.

That 25 percent sales decrease, which occurred after the U.S. Centers for Disease Control and Prevention reported about the first death attributable to e-cigarettes in August, reversed a months-long pattern of revenue growth for vape products, the report said. 

“Vapes have not just been the legal cannabis industry’s fastest-growing major product category, but also the focus of some of its most creative product-development and marketing initiatives,” BDS managing director of industry intelligence Tom Adams said in a prepared statement. “The popularity of vaping is a central pillar of our forecasts of the future growth of cannabis sales, so it’s crucial for cannabis industry professionals to understand the impact the vape crisis will have on the market, and how to best adjust business strategies in its wake.”

“Cannabis Vaping: Opportunities in an Uncertain Future” notes that while vape related health scares have had a detrimental effect on legal cannabis retailers, most of the actual illness incidents were related to the use of black market vape products purchased outside of the legal supply chain.

The report, which was sponsored by Seattle-based Advanced Vapor Devices, calls into question previous industry estimates that predicted sales of $10.6 billion by 2024. Vape products accounted for just $1.6 billion in 2018. 

“The data in this report is incontrovertible; consumers want to vape, but want to do so safely,” Arcview Group CEO Troy Dayton said in a statement. “The fear of vaping illicit, dangerous products has put a damper on this segment of the cannabis industry. It is incumbent upon both the federal and state governments to put into place a regulatory regime that protects consumers and advocates for highly-regulated, third party-tested concentrates.” 

Despite the troublesome trend, worries about e-cigarette or vaping associated lung injury, known as EVALI, are not necessarily destined to doom the industry.

“With effectively no federal oversight of the various cannabis markets, state regulators can take the opportunity to enhance their markets’ testing requirements — above and beyond just testing a product’s cannabis constituents by ensuring the quality and safety of delivery technologies, whether vapes or edibles or other form factors,” the report recommends. “But in addition to that, companies can self-regulate [by] adopting higher-than-required standards for their own products and then blowing their own horns to promote their efforts. Cannabis brands, especially those operating across multiple states, have grown considerably in power and reach since Colorado first began legal cannabis sales in January 2014.”

BOULDER — Several thousand illnesses and dozens of deaths were attributed to the use of electronic cigarettes and cannabis vaping in mid-2019, putting a damper on the retail momentum of products that had been some of the burgeoning legal cannabis industry’s hottest sellers.

“Cannabis Vaping: Opportunities in an Uncertain Future,” a report released Thursday by Boulder-based BDS Analytics Inc. and Arcview Market Research found that cannabis vape sales in legal markets in Arizona, California, Colorado, Nevada and Oregon dipped from $160 million in August 2019 to  $119 million in October.

That 25 percent sales decrease, which occurred after the U.S. Centers for Disease Control and Prevention reported about the first death attributable to e-cigarettes in August, reversed a months-long pattern of revenue growth for vape products, the report said. 

“Vapes have not just been the legal cannabis industry’s fastest-growing major product category, but also the focus of some of its most creative product-development and marketing initiatives,” BDS managing director of industry intelligence Tom Adams said in a prepared statement. “The popularity of vaping is a central pillar of our forecasts of the future growth of cannabis sales, so it’s crucial for cannabis industry professionals to understand the impact the vape crisis will have on the market, and how to best adjust business strategies in its wake.”

“Cannabis Vaping: Opportunities in an Uncertain Future” notes that while vape related health scares have had a detrimental effect on legal cannabis retailers, most of the actual illness incidents were related to the use of black market vape…