Self-Help: How State-Legal Cannabis Operators Can Respond to the Vaping Crisis
By Jennifer Briggs Fisher and Joseph J. Pangaro
March 12, 2020
Cannabis Business Executive
Over the last decade, there has been a remarkably swift rise in the popularity of vaporizers and vaping products. As reported by the BBC, the number of people using vaporizers increased from 7 million in 2011 to over 41 million in 2018. But in 2019, consumers began suffering from a rash of vaping-related lung injuries—according to the Centers for Disease Control and Prevention, as of February 18, 2020, there have been approximately 2,807 vaping-related injuries in the United States, occurring in all 50 states.
Highly publicized reports of these injuries raised serious concerns among the public and policymakers and threatened to halt the explosive growth of the vaping industry. State governments across the country issued emergency rules and executive orders to ban some, or all, vaporizer products. Even as courts issued injunctions prohibiting these bans from taking effect, more states moved forward with bans of their own. Within a few months states as diverse as Washington, Oregon, Montana, Michigan, Rhode Island, Massachusetts and New York had instituted some version of a vaporizer ban, mostly targeted at the highly popular flavored e-liquids.
Unfortunately, the effort to curb vaping illnesses has been largely been focused in the wrong direction and has impacted the wrong people. According to the CDC, products that came from a "non-commercial source" (the unregulated, unlicensed cannabis market, also known as the "black market") caused the vast majority of vaping-related injuries. But these statewide vaporizer bans do not impact the black market, because "non-commercial" suppliers are already selling vaporizer products illegally. These bans primarily impact state-licensed cannabis businesses.
Unfair as it may seem, the nation’s response to this recent health crisis illustrates the unique challenge the vaping industry faces. Vaporizers are a relatively new consumer good, so much of the public is not yet familiar with the product, and companies commercializing these products have simply not had time to build deep consumer trust. More importantly, because vaping products are widely available on the black market, it is easy to see how the reports of injuries caused by black-market products cause consumer confusion about what is actually safe and what is not. For comparison, imagine if consumption of home-brewed beer caused a similar string of injuries—the response would not be to close all bars and liquor stores. That is because consumers are familiar with the difference between commercial products and homemade products in that context. Consumers and regulators have not yet achieved the same degree of familiarity with vaporizers.
But these obstacles can be overcome with a focus on product quality and consumer education. To that end, here are some steps a business can take to set itself up for success in the highly popular—and highly scrutinized—vaping industry.
First, develop and put in place robust product-testing standards. This is already common practice among the most sophisticated state-licensed companies offering vaping products. States like California and Colorado have implemented detailed testing requirements for the cannabis used in vaping products, so businesses around the country can develop testing programs based on the guidance in these states’ regulations. At a minimum, this means hiring an independent third-party laboratory to test for contaminants such as heavy metals, pesticides and residual solvents like vitamin E acetate, which is the substance that has been strongly linked to vaping-related injuries.
Second, use product packaging and labeling as a means to communicate product quality to consumers. Include a QR or bar code on the label that links to the testing results and a certificate of analysis for the product batch, so customers can see for themselves that they are getting a safe, high-quality product. Other pieces of information to include on a label are the product potency, the manufacturer’s name, address, business license or registration number, the product batch number, an expiration date and ingredients. These are among the labeling requirements outlined in Oregon’s adult-use marijuana regulations, and states such as Indiana and Texas have similar packaging and labeling requirements for low-THC, hemp-derived cannabidiol products. As with the testing standards, businesses can use these packaging and labeling requirements as a guide regardless of where they operate.
Third, be scrupulous about selecting business partners. Companies in the state-legal cannabis industry know it is important that every entity they do business with strictly complies with state laws and regulations. Before selecting a vendor to manufacture the vaporizer’s battery, atomizer or tank, make sure the vendor follows all applicable regulations and good manufacturing practices and regularly tests their components. Carefully source the cannabis that will be used in the vape cartridges from state-licensed, compliant and reputable companies. High-quality suppliers will help ensure that end products are safe for consumers, and could even be part of an effective marketing campaign. Car companies routinely tout the quality, reliability or safety of component parts of their vehicles, such as the engine manufacturer, compatible technology platforms or safety services. At a time when consumers are focused on the safety of vaporizer products, partnerships with highly accredited manufacturers could help strengthen trust in a brand.
Finally, where vaporizer products are sold as a delivery system for medical marijuana, take time to educate physicians that are in a position to recommend vaporizer products to their patients. For example, medical marijuana is legal in New Jersey for a number of conditions, but doctors must register with the state before they can prescribe marijuana to their patients. It would be relatively easy for a vaporizer company to identify registered doctors that specialize in treating the identified conditions, reach out to them and explain how these products work. Doing so would allow these physicians to better appreciate the safety and efficacy of the vaporizer products, and they could in turn communicate that to their patients.
Scrupulous product testing and vendor selection will ensure high-quality products, which will keep consumers safe. Effective, transparent communications will educate the public on the differences between products sold legally and those sold on the black market. When these steps are taken together with dedication and focus, businesses can successfully navigate through the vaping crisis.
Jennifer Briggs Fisher, partner at Duane Morris, focuses her practice on representing businesses and corporate executives in highly regulated industries, including cannabis and hemp. She also serves as a team lead for the Duane Morris Cannabis Industry Group.
Joseph J. Pangaro, an associate at Duane Morris, is a commercial litigator. As a member of the Duane Morris Cannabis Industry Group, he has handled a wide range of cannabis-related issues, including intellectual property disputes and regulatory compliance issues.
Reprinted with permission from Cannabis Business Executive.