NEW YORK: While several headlines have cropped up in the last few months about the dangers of vaping, that hasn't stopped the cannabis sector from pressing ahead on developing new vape products in the lead-up to the December 16th sales launch date in Canada.
Why? It's because the US CDC concluded that the chemical of concern is only found in vapes from the black market. Legally-approved and regulated producers and sellers that include Namaste Technologies Inc. (OTCQB NXTTF) (TSX-V N), Cronos Group (NASDAQ CRON), The Supreme Cannabis Company (OTCQX SPRWF) (TSX FIRE), Fire & Flower Holdings Corp. (OTCPK FFLWF) (TSX-V FAF) and Aphria Inc. (NYSE APHA) (TSX APHA) will be selling safe and legal vape cartridges that are welcomed by the US$19 billion global e-cigarettes and vape market.
With several new products set to launch all at once as the Canadian Cannabis 2.0 green light is given, it's specifically retailers such as Namaste Technologies Inc. (OTCQBNXTTF) (TSX.VN) that stand to benefit first and foremost. With its popular online store CannMart.com, Namaste is set to capitalize all at once as consumers settle in and decide their brand loyalties after giving each new cannabis product a test spin.
Known as leading the largest global e-commerce pot platform in the world, CannMart already carries leaf, oils, accessories, and vaporizers (without cannabis). Namaste Technologies sells its wide range of wares on 24 unique websites, 5 warehouses in 20 countries, under a variety of brands including Supreme, GTEC, CannTx plus the leading recognized brand PAX devices—a spinoff from the innovative vape giant JUUL.
PAX has, to-date, limited its cannabis licensed partnerships to only 4 companies, including premium-cannabis cultivator The Supreme Cannabis Company (OTCQXSPRWF) (TSXFIRE) and Aphria Inc. (NYSEAPHA) (TSXAPHA) whose recently-licensed Diamond facility is set to go into full capacity production soon.
Having received a $1 billion investment from Altria, Cronos Group (NASDAQCRON) also has been public about its plans to get into the vape business—something its original businesses in Israel have been working on for the past 6 years.
Once the December 16th launch date hits, expect online vendors such as Namaste Technologies Inc. (NXTTF - N.V) and brick-and-mortar retailers Fire & Flower Holdings Corp. (OTCMKTSFFLWF) (TSX.VFAF) with their 33 currently operating dispensaries to waste no time in getting these new products in front of their customers.
The incentive is there.
Consulting firm Deloitte estimates that the Canadian market for edibles and alternative cannabis products is set to be worth up to C$2.7 billion annually.
Canada's Growing Vape Optimism in the Wake of Recent Fears
On the surface, the fears over vaping are substantiated, with 47 people dying in the US, and over 2,000 others suffering from lung illnesses contracted from using cannabis-infused vapes sourced from the illicit market.
However, in Canada, things are going to be significantly different. Health Canada has already said it's actively monitoring the US's vaping illness situation and has taken safety precautions to prevent similar outbreaks in Canada. Specifically, the regulator has banned any and all use of the vitamin E acetate additive that's been discovered to coat the insides of lungs like grease.
These [cannabis] extracts are not permitted to contain anything other than carrier substances, flavoring agents, and substances that are necessary to maintain the quality or stability of the product, a Health Canada spokesperson wrote in an email to BNN Bloomberg.
While vitamin E is safe as a vitamin pill or to use on skin, inhaling oily droplets is seen to be harmful. Nevertheless, consumers in Canada can be confident that this form of illness should be preventable in Canada.
Gearing Up for Cannabis 2.0 Sales Boosts
With the official launch date of cannabis 2.0 products set for mid-December, expectations are still quite high. It's estimated that products made from derivatives, including vapes, oils, and edibles are expected to add an additional 3 million consumers in the Canadian market alone.
But it's the opening up of so many markets around the world that is increasing the sheer amount of data we have for the cannabis sector as a whole.
Look no further than CannMart from Namaste Technologies Inc. (NXTTF - N.V), that to-date serves as a sort of vendor of digital picks and shovels for the cannabis industry's most prominent players.
Having already received its approval from Health Canada to sell cannabis oil concentrates, Namaste Technologies Inc.'s (NXTTF - N.V) wholly-owned subsidiary, CannMart Inc. is also primed to sell its own products to this trending new market.
Built as a B2B and B2C service provider, CannMart not only sells products for its clients, but also collects some of the industry's most valuable data, through a variety of platforms, and its proprietary Namaste AI technology.
Through wisely constructed consignment agreements, CannMart holds products for its clients, retaining a fee when the products are sold, with no upfront cost to CannMart or Namaste as a whole.
However, in order for the company to succeed, it has plenty of incentive to sell product at an enhanced rate. This means whether it's vapes, leaf, oils, or edibles, Namaste is impervious to shifting tastes. But with a leadership team who's built their careers on staying on top of trends, in companies such as Tesla, PayPal, SpaceX and Google, Namaste Technologies Inc. (NXTTF - N.V) appears to continue to have its finger on the pulse on the cannabis market—which today includes the coming vape revolution.
Many New Opportunities in Vaping at Once
Currently operating 33 stores legally selling cannabis throughout Canada (in Ontario, Alberta, Manitoba, Saskatchewan, and the Yukon), Fire & Flower Holdings Corp also has a wholesale division called Open Fields Distribution. This subsidiary has licenses for an additional 6 retail locations in Alberta, which are fully built and awaiting provincial licenses. Two of these locations are already reported to be operating as cannabis accessory stores. For now, the equipment for vaping can be sold, without the cartridges. However, at the 33 licensed and operating stores, retailers such as F&F and Namaste Technologies Inc. (NXTTF - N.V) certainly are poised to capitalize on the trend.
Cronos Group Chairman, President, and CEO Mike Gorensteing told CNBC's Jim Cramer he too sees major opportunities in cannabis vaping. Self-proclaimed as category agnostic, and cannabis-specific, Cronos took on a billion-dollar investment from Altria to develop out products such as this. With a focus on IP and brands, under a strategy that worked for many other consumer packaged goods (CPGs), Cronos sees a big window of opportunity specifically in the vape market, which it began work on 6 years ago in Israel at its Cronos Device Labs subsidiary.
The Supreme Cannabis Company is one of only four license holders to supply cannabis pods for the Pax Era Vaporizer in Canada. PAX comes with strong brand recognition, having been the spinoff brand of popular vaporizer innovators JUUL. Supreme has said it will benefit from this brand's reputation, and market-leading vaporizer technology, selling more than 500,000 Era devices and over one million devices in the flower vaporizer category.
Another major that's signed on with PAX, is cultivation giant, Aphria Inc. who announced earlier in November its plans to bring its recently-licensed Diamond facility to full capacity. This move is specifically designed to meet demand for vaping and edible products. The company received a cultivation license from Health Canada for a cannabis greenhouse facility that will add 140,000 kilograms in annual capacity to its operations through an additional 1.3 million square feet of production space.
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