Written By: Andrew Deen Amid the CDC's report of over 800 lung injuries and 12 deaths in the United States related to vaping, Curaleaf CURA:CNX[CNQ] - $8.06 0.04 (0.49%), (CURLF[OTCQX] - $6.09 plummeted 15% this summer after the FDA’s rejection of the company’s cannabidiol (CBD) vape products. The segment as a whole took a severe beating following the CDC announcement of the multiple state outbreak of lung injuries and deaths. After starting the year strong, the Global Cannabis Stock Index has reached lows rivaling the depths of 2018.
Vaping Use Up Despite Health RisksApproximately 43% of middle and high school students have used vape products. E-cigarettes, or vapes, have grown increasingly popular among teenagers. Officials report that teen vaping adoption is the most substantial uptake of any harmful substance, according to the National Survey Results on Drug Use and Health. The epidemic is especially troublesome because of the nicotine contained in many of the vaping vertical’s products. The Surgeon General officially declared vaping an epidemic on December 18, 2018, yet the problem has continued to grow in magnitude throughout 2019. Ironically, other surveys show that approximately 70% of all teens disapprove of nicotine products. Nevertheless, more than 30% of teens who vape start smoking cigarettes within six months, compared to only a little over 8% of teens who do not vape. In 2017, top vape manufacturer Juul sold 16.2 million units. Since then, the company’s sales have expanded by nearly 650%. By 2018, Juul captured nearly 70% of the American vape market. Shortly after, however, Juul completely pulled its social media advertising and engagement in response to the nation’s teen vaping epidemic.
The Industry That Almost Made ItRevenue for vape manufacturers surged in 2019, though most have yet to turn a profit. Six major vape manufacturers reported revenues of more than $100 million a year. Nevertheless, operating expenses continue to exceed gross revenue. The Surgeon General announcement arrived just as the vape industry was perhaps at the precipice of turning a profit. In July, Curaleaf secured its rank as the nation’s largest cannabis retailer after acquiring Grassroots Cannabis for $875 million. Shares are now down 50% from their springtime highs after the negative FDA ruling on four of the company’s products:
- CBD Lotion
- CBD Pain-Relief Patch
- Disposable Vape Pens