PAX Labs was all set to take over the Canadian cannabis vape market this month, but governments in Quebec and Newfoundland and Labrador have pulled the plug—at least until pressing questions about health concerns relating to vaping have been answered.
On Dec. 4, both the Quebec and Newfoundland and Labrador government announced they were halting the rollout of cannabis concentrates for vaping, after a string of vaping-related illnesses and even deaths have been reported in both Canada and the U.S.
“An analysis by experts in both countries has not been able to pinpoint the specific cause of this lung disease, however the majority of cases involve vaping cannabis. The intent of the decision is to protect the health of the people in this province until there is more evidence about the connection between cannabis vaping products and severe lung disease,” read a statement issued by the Newfoundland and Labrador government.
But the general manager for PAX Labs Canada, the Canadian arm of San Francisco-based vape giant Pax Labs, says a ban goes too far, and that it likely won’t prevent people from getting sick.
“We don’t believe bans are solving, ultimately, all that we’re trying to achieve—which is a transparent and consistent, understood, highly-regulated product that ensures that the things that, to the best of everyone’s knowledge, are not intended to be in these products are not placed in them,” says Tim Pellerin.
Set to rule the market
PAX was founded in 2007 and developed the Juul e-cigarette. It split from Juul in 2017 in order to concentrate on cannabis. According to the Financial Post, PAX is the top cannabis vape seller in the U.S. with a hold on about 17 per cent of the market.
With an eye on the Canadian market, PAX inked a deal this summer for oils for its vapes with leading Canadian companies Aurora Cannabis, Aphria, The Supreme Cannabis Company and Moncton-based OrganiGram Holdings.
The company had been in extensive talks with provincial regulators and retailers before vapes were set to roll out in stores across the country this month, Pellerin says, and was ready and poised to become Canada’s leading provider of cannabis vape products when they hit shelves next week.
It was a complete surprise when both the Newfoundland and Labrador government and the Quebec government announced on Dec. 4 that they wouldn’t be allowing cannabis vapes in regulated stores, Pellerin says. Newfoundland and Labrador allows licensed private stores to sell cannabis and cannabis products. In Quebec, the provincial government operates all of the stores.
Both governments said the move came from ongoing health concerns about cannabis vaping. As of Dec. 3, there were 13 cases of reported vaping-related illnesses in Canada, according to federal health officials. In the U.S., the situation is much worse, with reported cases in every state and 48 deaths.
“It’s not something we should take lightly,” Pellerin says. But he says the ban, and even the conversations around the health concerns, are lumping several issues into one.
“Illegal e-juice for nicotine-based devices, legal e-juice, illegal cannabis and legal cannabis are all very, very different things,” he says.
In Canada, seven of the 13 reported cases involved nicotine vaping only, while three involved THC. Two stemmed from nicotine, THC and other substances, according to federal health officials.
In the U.S., the deaths and illnesses have largely been attributed to vaping cannabis. In particular, Dank Vapes, a class of largely counterfeit THC-containing products “of unknown origin,” was the most commonly reported brand of choice amongst those who got sick, according to the Centre for Disease Control.
In particular, the CDC found that vitamin E acetate, a gooey substance used to thicken or dilute THC vaping liquids, could be to blame, but the evidence isn’t yet conclusive. The CDC says a number of other chemicals of concern are still on the table.
With the problem seeming to come largely from black market vapes, Pellerin worries a ban on regulated vapes will push people toward danger.
“Consumers won’t stop consuming this. They’re consuming it today, they’re going to find it tomorrow,” he says. “It’s not necessarily the best decision to padlock a liquor store if you were having a major issue with moonshine in your community affecting people’s health…. You would encourage people to go to a legal source that’s transparent, well-regulated, tested, [and] age-gated.”
He says the ban also creates the risk of a “grey market” where people purchase legal vapes in other provinces and bring them in to be sold on the black market.
PAX is in “constant dialogue” with retailers and wholesalers, and the company has contacted both the Quebec and Newfoundland and Labrador government to discuss the bans, he says.
Pellerin hopes the bans will be short-lived. “I’m optimistic,” he says. “I think long term, the category will be in a good place.”
The Nova Scotia government announced a ban on flavoured cannabis vaping products on Dec. 6, after Pellerin spoke with Atlantic Business Magazine.
As of publication date and barring further vape ban announcements, PAX vapes will be in stores in the remaining provinces.