Consumer Callouts – Pennsylvania Cannabis
**This write-up was part of the February 13th Consumer Callouts note, which goes out to clients every Sunday. To see more examples like this, please visit the Subscribe Page HERE.
According to Cannabis Industry Journal, the Pennsylvania Department of Health sent emails back in December to registered medical cannabis patients, notifying them of a safety review being conducted on ingredients found in cannabis vape products. Then, most recently, on February 4th, the health agency sent a third email. This one notified patients that they were recalling more than 650 products and ingredients. “After finishing this review, the Department has determined that certain vaporized medical marijuana products containing some added ingredients have not been approved for inhalation by the United States Food and Drug Administration (FDA).”
Peter Marcus, Vice President of Communications for Terrapin, a producer of vaporized cannabis products, commented, “The Department of Health needs to take an educated informed look at ingredients in general what we are talking about vaporization. Many of the ingredients that we saw on the list that made the recalls are used in other markets, are totally safe, they are made from all natural plantonicals, we are talking recreating flavors and smells from extracting from flowers and things like that.”
Cantor Fitzgerald analyst Pablo Zuanic issued a note earlier this week highlighting that although several companies were affected, Trulieve (TCNNF) saw 202 SKUs pulled and Curaleaf (CURLF) saw 152, which accounted for more than half of the said SKUs. They estimate that PA accounts for 14% of Curaleaf sales and 10% for Trulieve, factoring in Harvest. But of the two, Trulieve has more vape exposure.
“At this stage, we assume this will remain mostly a PA issue, but we will monitor how other states react. True, this is far from the “vape crisis” of the fall of 2019, but we wonder if other states could impose or claim a similar standard on vape products (and/ or whether companies in other states are using “ingredients not approved for inhalation” if we use the PA DOH terminology).’
Cantor Fitzgerald is also wondering with the “Schumer Draft” calling for the FDA to regulate the cannabis industry at the federal level, and the “Mace Bill” giving oversight to the TTB, they wonder if this development in Pennsylvania (and other states in the future?) could also affect the reform proposals to be tabled this March/April.
