Vaping: Another Hot Cannabis Consumption Method
Summary
- Given the rise of alternative cannabis consumption methods it’s not crazy to imagine that smoking will soon become the “alternative” versus the mainstream.
- From discretion, to portability, to carcinogen minimization, vapes are rising in popularity.
- Vaping is now one of the most popular “alternative” cannabis consumption methods, with no sign of slowing down.
- In this article, we provide a quick overview of the publicly traded companies that are in and around the cannabis vaporizer business.
Growth In Vaping and Consumption of Cannabis Oil
Vaporizer sales are rising, and consumption of cannabis oils is rising too. In order to take advantage of these trends, we wanted to look at the publicly listed vaporizer companies to give an overview of what companies could ride this wave.
According to The Global E-Cigarette & Vaporizer Market Forecast 2017-2027 from Visiongain, the "overall world revenue for E-Cigarette and Vaporizer market. will surpass $9.5bn in 2017."
Beyond that, in the two most recent quarters of medical marijuana market data released by Health Canada, growth in cannabis oil sales was stronger than growth in both the number of registered patients and and the growth in dried marijuana sales.
Cannabis oil sales just brought in record monthly revenues at Aurora Cannabis Inc. (ACBFF), and we can assume other oil-approved licensed producers will notice similar results.
To be clear, cannabis oils can be consumed in ways other than vaping, and there are vaporizers on the market that use whole flower as opposed to concentrates, but it’s safe to assume that some of these oils made their way into a vaporizer of one form or another.
Down here in the United States, the California based marijuana delivery service, Eaze found that deliveries of vaporizer cartridges increased 400% from 2015 to 2016 and that more than 1 in 5 of their deliveries included vaporizer cartridges in 2016.
Now that we've established the growth opportunity in the vape space, it's time to break down the companies involved to see what's out there.
The Players - Vaporizer Focused Companies
Gilla, Inc. (OTC:GLLA)
Gilla, Inc. manufactures, markets and distributes generic and premium E-liquids, electronic cigarettes and other hardware for vaping. The company is becoming increasingly involved in the development and marketing of vaporizer products specifically intended for use with cannabis.
On June 1st, the company announced that they have engaged two product developers to work on Gilla’s suite of vapor and cannabis concentrate products. Gilla also recently announced that they have signed an agreement to work with a licensed Nevada medical marijuana enterprise to launch a line of cannabis concentrates.
Namaste Technologies, Inc. (NXTTF)
Namaste Technologies owns and operates over 30 online vaporizer retail sites in 20+ countries. Their products include both vapes suited for tobacco/nicotine use and ones specifically designed for cannabis.
Back in March, Namaste closed its acquisition of Australian Vaporizers PTY Ltd., making Namaste a true leader in the vaporizer space worldwide. While Namaste also has divisions of the company devoted to other cannabis-related activities, their vape division is a high revenue, high growth space we can't ignore.
Vapir Enterprises, Inc. (VAPI)
Vapir Enterprises markets approximately five different vaporizers, and all of them support some form of cannabis product (i.e. whole flower, concentrates or oils). As of mid-March, Namaste Technologies, mentioned above, is a distributor of Vapir Enterprises’ products.
VPR Brands, LP (OTCPK:VPRB)
VPR Brands is a designer, marketer and distributor of electronic cigarettes, personal vaporizers and e-liquids. The company owns a portfolio of electronic cigarette and personal vaporizer intellectual property that they use in their own devices and license for use by outside firms.
As of the company's recent financial results, revenues and gross profits at the company are rising, and their recent acquisition of a wholesale unit seems to be pushing it further.
Conclusion
Amidst all of the alternative cannabis consumption methods, vaping is clearly the behemoth in the space. Investors seeking to obtain exposure to this not so alternative consumption method should take a look at these names, and do their own homework in pursuit of opportunity.
Given the competition in the space, it would be silly to assume they'll all go the distance. It is our assessment that there will be further consolidation in the space, as well as more newcomers. Since it is too early to tell who the true winners are, we recommend a heavy dose of due diligence and a diversified approach in the space.
We hope this was a useful beginners' guide to vapes and vape stocks. While there are a handful of public vape companies, there are also many privately held vape companies such as Grenco Science and PAX Labs.
Be sure to follow us so you never miss an important cannabis update.
Editor's Note: This article covers one or more microcap stocks. Please be aware of the risks associated with these stocks.
This article was written by
Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.