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Deadly vaping crisis threatens to ensnare Juul's lucrative marijuana sibling, Pax Labs
Nathan Bomey, USA TODAYPublished 5:01 a.m. ET Oct. 14, 2019 | Updated 11:36 a.m. ET Oct. 14, 2019


More @ link: https://www.usatoday.com/story/money/2019/10/14/thc-vaping-crisis-juul-labs-pax-labs-marijuana/3920362002/



With so little known about the mysterious vaping lung disease that's claimed multiple lives, some cities and states are warning against all vaping. USA TODAY

When Juul Labs and Pax Labs split from one company into two in 2017, they seemed destined to reach new heights.

Juul would conquer the e-cigarette industry. Pax would dominate the marijuana vaping business.

Their fortunes, however, quickly diverged. Juul found itself under fire for its alleged role in getting kids hooked on nicotine after pitching itself as a safe alternative to cigarettes; Pax largely escaped scrutiny as the burgeoning cannabis market made the company irresistible to investors.

But that honeymoon period might be ending for Pax.




Juul dominated the e-cigarette industry, prompting the FDA to call teen vaping an “epidemic.” What does vaping do to your body? We explain. Just the FAQs, USA TODAY

Federal authorities are tracking an outbreak of vaping-related lung illnesses, about 75% of which have been tied to products containing THC, the main psychoactive ingredient in marijuana. Authorities say half of the THC products tested so far also included vitamin E acetate.

There’s no proof any of Pax’s products have caused injuries. Its vaping devices are shipped to preapproved suppliers who fill the pods with cannabis leaves or oils, including THC products, to be vaped.

“No PAX products have been involved in any of these cases,” the company said in a statement on Sept. 11. “While the cause is yet to be determined, none of the brand partners who fill and distribute our pods use Vitamin E acetate in PAX formulations, and all pods are subject to rigorous state regulatory compliance and testing. We select our partners with careful diligence.”


But on Oct. 4, the Food and Drug Administration advised Americans to immediately cease vaping THC products of any kind, including items bought from seemingly trustworthy companies.

The agency also advised people not to “modify or add any substances such as THC or other oils to products purchased in stores.”


Those recommendations thrust the company's business model into crisis mode, said Marianne Udow-Phillips, executive director of the University of Michigan's Center for Healthcare Research and Transformation, which uses data analysis to advise policymakers and practitioners on health issues.

"There is great risk for Pax right now," she said. "The problem is that we don’t really know yet – the science isn’t there – what is causing all these illnesses."

Pax has a lot at stake. The privately held company’s annual revenue is about $262 million, according to S&P Global Market Intelligence. Pax said last month it had sold more than half a million devices used to vape “oil concentrates,” which include products containing THC. In April, the company was valued at $1.7 billion, according to investment tracker Crunchbase.

Facing questions over the exact nature of the illnesses, Pax announced the formation of a “health advisory board” in late September.

“Amid growing concern about the risks – and prevalence – of illicit cannabis, our top priority at PAX remains consumer safety,” the company's newly appointed CEO, Lisa Sergi, said in a statement Sept. 25, days after the sudden departure of CEO Bharat Vasan.

Marijuana vaping company Pax Labs shows off products at Digital Experience in connection with the Consumer Electronics Show on Jan. 7, 2019.
Marijuana vaping company Pax Labs shows off products at Digital Experience in connection with the Consumer Electronics Show on Jan. 7, 2019. (Photo: Robert Hanashiro, USA TODAY)

Pax says only preapproved "brand partners" are authorized to provide vaping liquids or flower for its devices. But social media reports and videos unearthed by USA TODAY show some users are hacking Pax products to use their own homemade THC oils.

In one YouTube video with more than 56,000 views, a user named “Vape HowTos” demonstrates a technique on how to use oils that were not intended for the Pax Era.

“You can save money by refilling your Pax Era Pods instead of buying new ones,” Vape HowTos says in a description accompanying the video.

Lung illnesses tied to vaping appears to be related to THC products, according to the Food and Drug Administration and the Centers for Disease Control and Prevention.
Lung illnesses tied to vaping appears to be related to THC products, according to the Food and Drug Administration and the Centers for Disease Control and Prevention. (Photo: AleksandrYu, Getty Images/iStockphoto)

Robert Jackler – a vaping watchdog and Stanford University professor and otologist-neurotologist who specializes in complex ear diseases – questioned how Pax could reach the conclusion that its products have not been tied to any illnesses.

“We don’t know whether Pax pods are injuring people,” he said.

Dianne Gleason, head of communications for Pax, declined both an interview request from USA TODAY and an offer to respond to written questions.

Instead, in response to a separate question on the nature of the Juul spinoff, she provided a statement on "significant misreporting" about the move. She said the former Pax Labs Inc. changed its name to Juul Labs Inc. on June 30, 2017, and concurrently spun off its marijuana business as a separate company that assumed the name of its predecessor, becoming the new Pax Labs.

"Since it spun off PAX in 2017, JUUL has not held any ownership interest in PAX, and the companies have operated as completely separate entities," Gleason said.