The Marijuana Regulatory Agency (MRA) in Michigan has issued a recall for any vape cartridges containing Vitamin E Acetate. The US Centers for Disease Control and Prevention (CDC) has said vitamin E acetate is responsible for a rash of lung disease.
Many of these products were sold from Plan B Wellness, located on 20101 8 Mile Road in Detroit. Most of them were sold late 2019.
The substances has failed safety compliance testing in August. According to a news release, these cartridges were made before November 2019, when the rules for marijuana products were filed in the state.
The vape cartridges will all have a license number of the marijuana facility on it. They will also have a tag number that is followed by a statewide monitoring system.
MRA suggests customers and patients to return the affected products to Plan B Wellness, who will properly dispose them. The store will also contact customers who have bought these items.
It was a year ago that lung disease caused by vitamin E acetate in illegal THC pens that caused legal marijuana sales to plummet. Today, marijuana vapor companies report that sales are returning to normal as consumers begin to understand the danger of consuming black market marijuana vape pens.
Arnaud Dumas de Rauly, co-founder and CEO of New York-based vape manufacturer The Blinc Group, sees this as the biggest impact of the vaping health scare. “It made consumers realize that you can’t just buy any cannabis vaping product,” he said. “You can’t go to the black market.”
The outbreak of what the Centers for Disease Control and Prevention dubbed e-cigarette or vaping product use-associated lung injury (EVALI) in the summer of 2019 slowed the growth of some companies and stifled sales toward the end of the year, according to a story posted on mjbizdaily.com.
But vape products, like other cannabis goods, seem to also be weathering not only the health crisis but the current economic downturn. “We’ve seen tremendous bounce back from the vape crisis,” said Sammy Dorf, chief growth officer and co-founder of Verano Holdings, a vertically integrated cannabis company in Chicago. “Business is extremely strong.”
The COVID-19 pandemic hasn’t slowed business much, either, according to the vape companies, despite fresh warnings that vaping and smoking can make a person more vulnerable to the virus. “We haven’t seen a change in the purchasing pattern of our patients or customers due to the pandemic,” Dorf added.
How it played out
The vape health crisis unfolded rapidly, beginning in the summer of 2019 with mainstream media reports seizing on the news that people were dying from allegedly vaping mainly THC products. Some states with regulated cannabis markets such as Washington temporarily banned additives in vapes, while others, including Massachusetts, banned the sale of vape products altogether.
It took a few months for more information about the illness to surface. Scientists identified one substance, vitamin E acetate, which is added as a cutting agent to some vape oil, as a possible culprit in the lung illness.
Many industry officials claimed that vitamin E was more commonly found in illicit market products and pointed out that legal cannabis is regulated, tested and safer than unregulated street products.
Most recently, an academic study published in August confirmed that states lacking licensed, regulated cannabis saw the highest rates of EVALI, particularly those in the northern Midwest. (See chart above.) The report, from the Society for the Study of Addiction, noted “these results suggest that EVALI cases did not arise from e-cigarette or cannabis use per se, but rather from locally distributed e-liquids or additives most prevalent in the affected areas.”
“We believe the bigger lesson here is that the data clearly indicate that there were fewer cases of lung illnesses and injury in states where legal, regulated cannabis products were available,” said Steve Fox, strategic adviser to the Cannabis Trade Federation. “In fact, the lowest rates of incidence were in Colorado, Washington and Alaska – three of the first four legal states – with Oregon and Nevada close behind.”
‘Very scary’
According to Seattle data-analytics company Headset, sales of adult-use vape products in three of four states with recreational markets generally have recovered, though Nevada retailers saw sales still lower than pre-health scare levels after the state enacted stricter lockdown measures for marijuana retailers during the pandemic.However, market share for vape pens is lower year-over-year, according to the Marijuana Business Factbook, as flower tends to represent a more economical choice amid COVID-19 and greater economic concerns.
Several cannabis vape business executives interviewed for this story said sales have completely rebounded. George Sadler, president of San Diego-based Platinum Vape, which sells products into several markets, said sales plateaued right after the initial scare but started trending upward in the early winter. “We never really saw much of anything on the level of decline that we thought,” Sadler said.
Dumas de Rauly said his sales started to recover in December as consumer confidence in the legal market returned. “We have doubled our revenue in terms of vaping hardware since the vaping crisis,” Dumas de Rauly said.
But he added that his business likely lost a year of growth because of the earlier drop in sales. In Denver, Dan Gardenswartz, chief operating officer at Spherex, said his company’s sales never took a “meaningful hit,” but the end of 2019 was “a little bit of a roller coaster.”
“It was a very strange time,” he said. “The vape crisis was a very scary thing for people in the industry.”
Seth Wiggins, chief revenue officer for Clear Cannabis, also in Denver, saw a decline in sales for about 60-90 days before the trend began to reverse. The health crisis “was very painful initially,” he added. However, Wiggins said his company has posted record sales in recent months.
Illicit to licit
Wiggins attributes that lift in sales to customers who are shifting from illicit suppliers to legal providers. “The compliant market allows for more regulations and safety,” he added. “It’s breaching the tipping point where the cost basis is not worth the risk” to buy off the street.
Morgan Fox, spokesman for the National Cannabis Industry Association, also identified that trend. “Across the board, we’ve seen a lot of people moving away from the unregulated market largely because of public-health concerns,” he said.
Gardenswartz said he saw more people transition from the illicit to the legal market in California than in Colorado, which has imposed tighter controls on illegal dispensaries peddling products. Sadler agreed. He believes there has been some decline in vape sales on the unlicensed market, and he noted that some of his consumers have made the shift from the illicit market to licensed businesses.
He cited Weedmaps’ decision to curtail advertising for unlicensed dispensaries as helping consumers find legal, tested vape products. Consumers are more aware that they’re going to a licensed dispensary, and stores in California have even displayed QR codes on storefronts so customers know they’re buying from a legal shop.
“People are more diligent about asking the questions,” he said.
Combustible cigarette sales are slumping slightly, but still continuing to perform better than expected while vapor products fall more than 17 percent, according to the latest Nielsen convenience store report.
Overall sales volume for traditional cigarettes was down 2.1 percent for the four-week period that ended Aug. 22, according to the latest Nielsen. By comparison, the sales volume was down 0.8 percent in a four-week period in May, according to the Winston-Salem Journal.
Electronic cigarettes sales, by contrast, are down 17.4 percent for the same four-week period ending Aug. 22. Vapor sales have been on a continuous decline for six months since the Food and Drug Administration implemented its latest round of heightened regulations on the products.
It should be noted that Nielsen does not track brick-and-mortar vape shop sales. Industry experts say that data could have a major impact on market share if it were to be included.
The FDA regulations have depressed the demand for closed-pod cartridges that provide the nicotine, with No. 2-selling Vuse of R.J. Reynolds Vapor Co. being the lone exception, according to the news report.
“The Nielsen data continues to show the decline in cigarette sales moderating to a pace that is only about a quarter of the rate of contraction in the second quarter of last year — before the much-enhanced attacks on vaping,” said David Sweanor, an adjunct law professor at the University of Ottawa and the author of several e-cigarette studies.
Overall e-cigarette sales-volume growth has declined steadily since Nielsen’s Aug. 10, 2019, report, when it was up 60.2 percent year over year. The latest FDA restrictions on the sector debuted Feb. 6. The FDA raised the legal smoking age from 18 to 21 on Dec. 20.
Those restrictions foremost required manufacturers of cartridge-based e-cigarettes, such as Juul Labs, R.J. Reynolds Vapor Co., NJoy and Fontem Ventures, to stop making, distributing and selling “unauthorized flavorings” by Feb. 6, or risk enforcement actions.
The menthol and tobacco flavors still allowed for cartridge e-cigarette flavorings are the same as those that are legal in traditional cigarettes. Juul’s four-week dollar sales have dropped from a 50.2 percent increase in the Aug. 10, 2019, report to a 32.9 percent decline for the latest report. By comparison, Reynolds’ Vuse was up 56.7 percent in the latest report and NJoy down 40.8 percent.
Juul has a 57.8 percent market share, unchanged from the previous report. Vuse is at 23.6 percent, up from 20.4 percent, while NJoy at 5 percent, down from 11.3 percent, and Fontem Ventures’ blu eCigs at 2.7 percent, down from 3 percent.
Pricing and availability may be a motivating factor in the slowing of the decline of combustible cigarette sales. The Covid-19 crisis did slow product shipments from China and lower gas prices coupled with restricted travel have given consumers more expendable income, according to reports.
Interestingly, cigarette sales in Australia are plunging faster than any time in history as smokers turn to vapor products. There were 410 million fewer smokes sold in the country than two years ago.
Cigarettes in Australia are more expensive than anywhere else in the world at $32 per pack of 25 sticks.
Last year, about 2132 million cigarettes were sold in Australia – 193 million fewer than 2018, and following a 217 million drop the previous year.
The vapor industry is suffering serious hardships due to closures caused by Covid-19.
By Timothy S. Donahue
Several countries have considered vape shops essential businesses during the coronavirus pandemic. Countries such as Spain, France and New Zealand have allowed e-cigarette users to continue to have access to nicotine without returning to combustible cigarettes. In many countries such as the U.K. and the U.S., however, vape shops have been forced to close and many business owners say they may never be able to recover.
In the U.K., VPZ, the country’s largest vapor retailer, vowed to keep its shops open. On March 20, the company urged British leaders to follow the lead of other European countries and allow all 155 VPZ stores across the U.K. to be added to the list of essential businesses. That request was denied. On March 23, VPZ announced it would be closing all its locations. In an email, Doug Mutter, director of compliance and manufacturing for VPZ, said the company was disappointed with the lack of explanation from the government concerning the status of vapor retailers.
“Other European nations had recognized the work vaping specialists do in reducing the stress on health services and [have] kept the local stores open,” he said. “We had expected this to be the case and had begun investing in new processes in order to manage our business in such an environment. However, without sufficient clarification and in the interest of keeping our staff and customers safe, we have made the decision to close all 155 stores … for the next three weeks.”
James Jarvis owns four shops in the U.S. state of Ohio. Jarvis also heads the Ohio Vapor Trade Association (OHVTA), an industry advocacy group. He closed his Vapor Station locations in Clintonville, Columbus, Gahanna and Hilliard on March 23. He said that while the governor of Ohio has shown great empathy to Ohioans regarding the coronavirus, the OHVTA knew it needed to recommend that its members make consumers aware that a stay-at-home order or shutdown would be likely at some point, and all shop owners needed to inform customers.
“Many of the shops ran specials, extended hours … to make sure if something happened our consumer family would be well stocked up. I talked to members as well as looking at our own numbers, and over the last few weeks [during the increase in virus reporting], sales were definitely on the rise,” Jarvis told Vapor Voice. “The unfortunate day came on March 22 as an order was signed and a deadline for nonessential business [to close] was set for 11:59 p.m. [on] March 23.”
The total impact on vape shop closures in the U.S. will be hard to calculate, according to Jarvis. He says that if stores are forced to be closed for more than 14 days, many vapor consumers will get frustrated and turn back to cigarettes, which he says is a huge step backward for public health. “The longer we are closed, the more distant we will be to the consumer,” he explains. “This will also have a negative effect on our employees and our businesses as the uncertainty of how bills, rents and other necessities will be handled.”
Luckily for Ohioans, the state allows for online sales of vapor products. Many states, such as Utah, Massachusetts, Rhode Island and Washington, have banned the online sale of vapor products. Jarvis says that the challenge is that even if a state allows for online sales, only online sales “will have a dramatic effect on conversion rates for smokers.” He says he worries about smokers using whatever products they can find at their local gas station or c-store and not getting the full education on the products they are using.
“Vape shops take the time to educate on the products, liquid options, safety and advocacy. With that element being gone, there will be too many opportunities that will be missed, and someone could wind up with a device or liquid that may not be the right thing, the right [nicotine] strength or will be operating the device unsafely,” he says. “In many states, the vape shop also educates on advocacy and any state with a ban or tax increases; it will now be harder to communicate those points to them as well. If the vape shops go away, the true heart and soul of the industry goes away and will be handed over to the very company [large tobacco companies] we are trying to destroy.”
Jarvis says the industry is also readying for premarket tobacco product application (PMTA) submissions due to the U.S. Food and Drug Administration (FDA) on May 12. The FDA submitted a request to postpone the deadline to the Maryland judge who set the deadline, but as of this writing, no decision had been made.
“I am hopeful that the FDA will do the right thing, but we need to act as if they will not and continue our due diligence to successfully start and complete a PMTA. There is a group on Facebook called ‘PMTA Sharing’ that is an amazing resource for small manufacturers,” says Jarvis. “Char Owen and her husband are really going to great lengths to make starting and completing the necessary paperwork as easy and painless for all small manufacturers in that group. They are sacrificing a lot of their own personal time and finances and sharing with the group.”
Jarvis suggests that even if the Ohio leadership changes its mind and allows vape shops to open, there will still be additional challenges. For example, the early Chinese New Year and the outbreak of Covid-19 have made finding some hardware products produced in China more difficult. He explains that even though the Chinese factories are operating again, the virus started to spread in the U.S., and changes were made to customs with regard to shipping.
“We also had many other states issuing orders that had stoppage effects on shipping. There is definitely a strain on the flow of products right now. The one thing we have been seeing, which is amazing, is that stores are sharing products with other stores, [and] distributors are limiting quantities and working overtime, so everyone gets a little,” he says. “This is truly a community that looks out for one another. It’s great feeling like a part of a group of people that are selfless and want to make sure the consumer and our small businesses are protected at the end of the day.”
On the other side of the U.S., Burbank, California-based online vapor retailer ProVape says the vapor industry is going to continue to feel the impact of the coronavirus outbreak. In Shenzhen, China, the vapor manufacturing capital of the world, businesses have been allowed to resume operation if they have stringent measures to prevent further spread of the devastating virus (see “Sanitary Solution”).
There is still a massive problem with the timely shipment of supplies, according to Art Harutyunyan, a senior executive of ProVape. Wholesale vapor suppliers must wait for the coronavirus crisis to end before they can get a steady supply of vaporizer products. “We are constantly told that products are on backorder and are encouraged to stock up with vape hardware [coils, vape kits, pod systems, mods, tanks and disposable vape devices] to avoid any issues in coming months,” says Harutyunyan, adding that the coronavirus is creating a global problem in the vapor industry as manufacturers of vapor products will not be able to produce and deliver some products before coils, pods and other vapor hardware dwindle to a frighteningly low number in the U.S. and around the globe.
Moving farther west, Patricia Anderson, co-owner of Black Lava Vape (BLV) on the big island of Hawaii, says that as of March 22, their three stores were still open for business, but they stopped vaping in the shop and were only allowing three people at a time in the store. They were also offering curbside service and delivery in a limited area.
“Last week [week ending March 21] and over the weekend were probably some of the best days we have had in succession in quite some time. In the vaping world, I would say our products are like toilet paper … people are very afraid that we will run out [of product] sooner or later, or they will close us as a nonessential business, and they will have to go back to cigarettes,” explains Anderson. “To be quite honest, the THC scare [black market THC products causing pulmonary issues] and the always impending ban on flavors was more detrimental to us than the coronavirus [pandemic]. During the THC scare, I had to lay off half of my employees, cut store hours, cut employee hours, and we have been unable to pay ourselves.”
During the scare, BLV shelves became very hard to stock, and customers even supposed that BLV was closing, says Anderson. The shop went from having more than 10 full-time employees to five, and three are part-time. She says BLV e-juices are all made in the U.S., but their hardware comes from China, and they started seeing availability issues with wholesalers too.
“We found out [the other day] that two of our wholesalers are not processing any more orders, so that will definitely have an impact on competitive pricing,” Anderson explains. Then the hammer dropped. “Hawaii will be on lockdown starting March 26. I’m guessing we will be closing our doors as I don’t see the state considering us to be an essential business [they are currently allowed to stay open doing curbside service but are not labeled essential]. Our loyal vaping community will disagree, but we knew it was coming; 90 percent of our customers have been laid off [from their jobs].”
Jarvis says that the industry can’t lose hope. He says the industry needs to continue to stand together and fight for this life-saving industry that has already saved millions of lives from deadly traditional cigarettes. “This industry, as I have said before, is an amazing one to be a part of. We are on the right side of everything,” says Jarvis emphatically. “As long as we continue to work together, look out for each other, stay focused … we can do anything. Together we will be stronger and healthier to be there for the future.”