Marijuana merchants bracing themselves amid alarm over vaping deaths - Crain's Chicago Business

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An outbreak of unexplained, sometimes deadly illnesses has cast a cloud over the marijuana business just as it gears up for a big expansion with legalized sales for recreational use in Illinois.

A half-dozen people in the U.S. have died from vaping, often involving marijuana extracts, including one in Illinois. And the Centers for Disease Control & Prevention is investigating nearly 400 serious respiratory illnesses linked to use of vaping pens, or electronic cigarettes. Vaping-related sales already have started slipping at some weed shops after the Food & Drug Administration's unusual move Sept. 6 to advise people against vaping anything containing THC, the compound that produces the high associated with marijuana.

Although the FDA doesn't formally regulate marijuana, which is illegal under federal law, the unexpected appearance of vaping-related illness has potentially troubling implications for the cannabis industry, including some major players based in Illinois. Vaping is the second most popular method of consuming legal marijuana—behind smoking—and it's the fastest-growing part of the business, says John Kagia, chief knowledge officer at New Frontier Data, a cannabis-research firm in Washington, D.C. "Vapes went to 30 percent from near-zero four years ago."

That trajectory could reverse if health fears cause consumers to stop vaping, or regulators ban it. To maintain sales growth, legal marijuana companies would have to persuade vapers to try other methods.

So far, most of the incidents appear linked to vaping of marijuana purchased on the illicit market. But one death in Oregon involved a man who had bought vaping products from a licensed dispensary. Authorities don't yet know if the dispensary-linked product played a role in his death.

Investigating agencies noted that the vaping cartridges used by several of the people who died contained vitamin E oil, an additive some suppliers often use to deliver THC to be vaporized. Although vitamin E oil is safe when ingested or applied topically, scientists aren't sure if it can be inhaled safely. Legal marijuana growers and dispensary operators say they don't use vitamin E in their vaping products, which are inspected closely.

"We've gone to every one of our vendors to confirm they don't use vitamin E or any other materials that have caused concern," says Mitch Kahn, CEO of Chicago-based Grassroots Cannabis. "The safety of our products is our top priority."

Still, the wave of illnesses triggered a swift and far-reaching response from government agencies and elected officials, including U.S. Sen. Dick Durbin of Illinois. But the outcry focuses mostly on vaping in general and concerns that it's getting a new generation hooked on tobacco after smoking was finally declining. The White House says the FDA plans to ban flavored e-cigarette products.

The cannabis industry may opt to lie low, as politicians focus on makers of vaping products. But weed companies keep getting dragged into the spotlight. A Sept. 6 report in the New England Journal of Medicine about pulmonary illness related to e-cigarette use in Illinois and Wisconsin noted 84 percent of the 53 patients studied "reported having used (THC) products in e-cigarette devices."

STATE SAYS STAY TUNED

Marijuana industry regulators haven't indicated whether they intend to ban or otherwise restrict sales of vaping products. The state of Illinois says only that it has "assembled a team of health experts to produce recommendations."

State Rep. Kelly Cassidy, a co-author of the marijuana law, says vaping "is part of the conversation" as the state implements regulations for recreational-use marijuana sales that are scheduled to start Jan. 1. "You have to address that. We want to make sure we do it thoughtfully."

Likewise, Dalia Hernandez, spokeswoman for the Oregon Health Authority, says that without a conclusive link to a product, she does not expect the state to consider a ban on cannabinoid vaping. "Right now we are investigating cases. We haven't spent much time on regulation."

In the meantime, marijuana companies are looking for an upside. "The headlines encourage people to be more aware of where they're getting the products and what's in them, and they'll look for a trusted supplier," says Jason Erkes, spokesman for Chicago-based Cresco Labs.

Dr. Maria Rahmandar, an assistant professor at Northwestern University's Feinberg School of Medicine, says that might not be enough. "Certainly I am concerned about black-market components, but I am still concerned with the nicotine and even THC that is legal. There are things that have been 'determined to be safe' in one area but can't be proven safe in vaping. We are learning some horrifying results."

Kahn acknowledges, "This is a wake-up call that we, as an industry, need more research."

The cannabis industry sees the alarm over possible health risks of vaping as an opportunity to make the case for federal legalization and regulation of marijuana. Currently, marijuana use is being legislated state by state. Many weed companies believe federal oversight would give the public more confidence and keep out unlicensed competitors.

It's unclear how much health concerns—perhaps augmented by future restrictions or outright bans on vaping products—will hurt business at legal cannabis sellers.

New Frontier says sales data from dispensaries in medical-only cannabis markets in Connecticut, Pennsylvania and Arizona show 10 to 15 percent declines between early August and early September. In Illinois, which remains a relatively small medical-use market until Jan. 1, sales dropped about 2.5 percent.

Sales dropped 5 to 10 percent in recreational markets in Massachusetts, Oregon and Nevada, but there was little change in Colorado and Washington, two of the most mature markets.

"It appears consumers are responding," Kagia says, stressing that the data is preliminary due to how fast the situation is evolving. "It remains to be seen how much more it moves. The risk of it contracting further is heightened by the real possibility that federal investigations keep this issue in the forefront for consumers.

"We have not yet seen an impact on overall sales, which is why we believe, at least for now, consumers are reallocating their spending, not cutting it out entirely."

Jon Asplund contributed.


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