Aphria stock is in the red today as the company’s move into vaping coincides with the Centre for Disease Control and Prevention finding that THC, and not nicotine, is the prime culprit in the vaping crisis, which has claimed the lives of 36 people in the US.
THC Link Weighs on Aphria Stock
According to new data released by the CDC earlier this week, people who died as a result of a mysterious outbreak of vaping-related lung injury often used products exclusively containing THC, the main psychoactive substance in cannabis. Among 19 of the reported 34 deaths in the US, 84% of users reported using products containing THC, while 63% reported using THC exclusively.
Aphria (TSX:APHA) (NYSE:APHA) recently rolled out its new range of THC vapes ahead of the launch of the 2.0 market in Canada in December, which one journalist from the Windsor Star described as having “enough high-potency THC in those containers to keep everyone in Windsor stoned for a month.” Perhaps the fresh data from the CDC is weighing on the minds of investors, and in consequence, on the value of Aphria shares.
However, Aphria spokesperson Tamara McGregor attempted to allay fears, saying “obviously, it’s concerning,” and added that Aphria has been looking into the reports and determined most, if not all, of the documented pulmonary illnesses and deaths point to “products coming off the illicit market,” with unregulated or unknown ingredients being used. Aphria stock is down 3.5% on Tuesday amidst fresh concerns.
Cannabis Industry Pins Hopes on 2.0 Market
The Canadian cannabis market, which has stuttered and stalled in the first year of legalization, has been pinning its hopes on the 2.0 market, in which derivatives like vapes will be legal, to provide a catalyst to transform the fortunes of pot stocks across the board. Aphria has actually been one of the stronger performers during 2019 due to strong earnings and a clean rap sheet, somewhat of a rarity in the industry. However, Aphria stock has still lost over 50% as investors become increasingly apprehensive.
Health Canada has taken a more stringent approach to regulating “illicit street vapes,” meaning the impact of the crisis has been minimal north of the border. However, the negative publicity still weighs on industry heavyweights. Aphria’s range of vapes is due to hit shelves early next year, by which point everyone will be hoping the source of the vape crisis has been identified and rectified.
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