Cannabis vape pens and cartridges are set to hit store shelves in Canada on December 16, but the provinces of Quebec and Newfoundland and Labrador have decided to ban the sale of them indefinitely.
The news of these provincial cannabis vape bans isn't surprising after 13 cases of vaping-related illnesses were reported across the country, yet it hasn't stopped Canadian cannabis companies from moving forward with product applications.
But how will these provincial bans affect sales in the coming weeks?
Cannabis Vape Products Banned in QC and NL
On Wednesday, Quebec and Newfoundland and Labrador announced that they would not allow the sale of cannabis vape products until there is more evidence about their connection to severe lung disease.
Meanwhile, British Columbia has decided to increase taxes on vaping-related products by up to 20% starting January 1, 2020. Many have criticized the BC government's decision, as it will likely push consumers towards the black market, while others are applauding the bold move.
It remains to be seen how cannabis vape bans and tax hikes will affect the companies looking to launch those products to the market in just over a week, but it could cause a damper on what is expected to be a very lucrative market.
Health Canada has received roughly 50 applications to date from licensed processors for 747 different cannabis vape products and has imposed strict regulations on the ingredients allowed in the products after the health crisis in the US surrounding vaping.
Several weed-legal US states have taken action to combat the crisis, and some companies in the space have felt the heat. One example is Wildflower Brands (CSE:SUN) (OTCQB:WLDFF), which has reportedly seen a 50% decrease in its vape sales despite never having an issue reported.
Meanwhile, Canadian cannabis companies are facing hard times in the market, and vaping bans will likely lead to further drops. Since the beginning of the year, industry giants like Aurora Cannabis (TSX:ACB) (NYSE:ACB), and Cronos Group (TSX:CRON) (NASDAQ:CRON) have all dropped significantly in value.
Cannabis Companies Launching Cannabis Vape Products
Nearly every cannabis company is looking to enter the lucrative cannabis derivatives market, many of whom have either already created their own products or have partnered with companies that have.
Last month, for example, Valens GroWorks Corp (TSXV:VGW) (OTCQX:VGWCF) entered the space through a multi-year white label agreement with BRNT Ltd. to launch a full line of cannabis vapes pens in Canada.
Canopy Growth Corp. (TSX:WEED) (NYSE:CGC) also revealed its new vape pen and vape cartridge products recently, along with several other cannabis-infused products for the Cannabis 2.0 market.
Then, there are the cannabis companies that were chosen by Pax Labs as exclusive partners for cannabis vapes, which include The Supreme Cannabis Company (TSX:FIRE) (OTCQX:SPRWF), Aphria Inc. (TSX:APHA) (NYSE:APHA), Aurora Cannabis, and Organigram Holdings Inc. (TSX:OGI) (NASDAQ:OGI).
And that's just to name a few.
Investors will no doubt keep a close eye on how these products fare in vaping-legal provinces when December 16 rolls around. And while the news from Quebec and Newfoundland and Labrador isn't great, there are still eight other provinces and three territories containing almost 30 million people.
Unless other provinces decide to follow suit and ban pot-infused vape products, this sector is expected to be very lucrative indeed.
Unlike the US, Canada has imposed strict rules surrounding cannabis derivatives, which should help ease fears among consumers and investors once these products start rolling out.
What are your thoughts about cannabis vape products? Let us know in the comments!
Featured Image: DepositPhotos © tomeversley