A U.S. recommendation that consumers avoid vaping products containing the active...
TORONTO - A U.S. recommendation that consumers avoid vaping products containing the active ingredient in marijuana ahead of their legalization in Canada next month could be a blow to Canadian cannabis companies’ hopes that the higher-margin products will help propel them to profitability.
The heightened health concerns come at a time when Canadian cannabis companies, whose share prices have tumbled over disappointing sales and supply and quality hiccups, are investing millions of dollars into marijuana derivatives, including vape products. The vaping concerns have contributed to recent declines, and will continue to hurt shares, said Bruce Campbell, portfolio manager at Stonecastle Investment Management, which invests in cannabis stocks.
While a shift away from Canada’s illicit cannabis vape market into legal dried flower is positive from a public health standpoint, prolonged uncertainty could hurt legal vape sales. “In theory, it should promote the legal market,” Zandberg said. “But if you don’t have very aggressive education behind these products, a good portion of the population doesn’t see the difference.”
“The Canadian government should come out as soon as possible one way or other and either double down on vape products or remove them from the derivatives market. You have to give the industry clarity,” said Brett Hundley, a cannabis analyst at Seaport Global.
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