WINNIPEG - Public health concerns over vaping have cast a haze over expansion excitement in the cannabis market.
The production and sale of cannabis derivatives — edibles, extracts, topicals and vape products — become legal Thursday on the one-year anniversary of the legalization of recreational cannabis.
Licence holders need to give 60 days notice to Health Canada that they intend to sell the products, so they won't land on store shelves until mid-December.
Some cannabis companies in Canada are anticipating a substantial increase in sales, but Christopher Carlsten said he would have liked to see legalization of cannabis vaping products postponed, or at the very least have significantly more public education about it.
"These products get out there and then we chase our tails trying to figure out what's going on, why we are seeing the toxicity, and then try to regulate retrospectively, which is a dangerous way to do things," said Carlsten, head of respiratory medicine at University of British Columbia.
More than 1,000 people in the United States, and a handful in Canada, have developed a lung ailment apparently linked to vaping.
The Centers for Disease Control and Prevention said last week that the number of confirmed and probable cases of the severe pulmonary illness jumped to 1,299 across 49 states, including 26 deaths.
It has said at this stage "no one device, product or substance has been linked to all cases." But health authorities there are urging people to stop using electronic cigarettes, specifically for products containing THC, or tetrahydrocannabinol, a compound found in cannabis.
Vaping is a new trend and is constantly changing, so Carlsten said experts are just beginning to understand its impacts. Studies are showing short-term effects include swelling and heat damage to the lungs. Long-term, Calsten said, it has also being linked to emphysema.
"Their variability is just too great, the uncertainty is just too great, and I haven't seen any particular product that has clearly been shown to be safe," he said.
Health Canada will not be delaying the legalization of nondried-flower pot products over the concerns. There are regulatory controls for products to lower risks and Health Canada said in an email it will be able to respond to emerging health issues in a timely manner.
Ingredients in inhalable cannabis extracts will be restricted, including vitamin E acetate, which is a focus of investigation in several U.S. cases
"I am hopeful that we don't see any knee-jerk reactions here in Canada towards prohibiting the sale or preventing the sale of these products," said John Arbuthnot, CEO of Delta 9 Cannabis.
Delta 9 — a cannabis producer, processor and wholesale distributor based out of Winnipeg — has already been focusing much of its resources on preparing to bring vape pens and cartridges to market.
Arbuthnot said he is "very bullish" or invested in vape oil and is confident Canadian regulations will ensure the product is safe.
"Clearly the industry is very concerned, or should be, that vape cartridges will be suspended," said Chris Damas, author of the BCMI Cannabis Report, a cannabis stock newsletter.
He said there has been significant investment by major cannabis companies to produce vape cartridges that can process concentrated cannabis.
It's expected to become a lucrative product for legal companies who are struggling to push out persistent producers in the black market.
The Cannabis Council of Canada has said illicit vape market in Canada is estimated to be worth roughly $1 billion.
British tobacco giant Imperial Brands signed a $123-million investment deal with Auxly Cannabis Group over the summer. The London-based company has increasingly focused on e-cigarettes and vaporizers and the infusion of capital will bring that technology to the Canadian cannabis company.
Pax Labs, the American vaping company that created the Juul e-cigarette, partnered with four companies — Aphria, Aurora, Organigram and Supreme Cannabis — to provide a pen-and-pod system for cannabis concentrates.
"We are excited about the coming changes in regulation that will allow us to cover new and novel products … This agreement is one of many steps Aurora is taking to be ready for the new market opportunities," Darren Karasiuk, chief commercial officer of Aurora, said in a news release in June.
Companies are hopeful consumers will be reassured that by following regulations their products are safe, Damas added.
Health concerns may have put a wrench in rollout plans for Canadian cannabis producers, but Damas said the result may actually be users moving to the legal market for vaping cartridges en masse.
"It's definitely been a negative for the stocks," he said. "But in a six- to nine-month period this will be reconciled."