Vape sales are falling on fears about the outbreak of vaping-related lung illness

The vaping-related lung disease that has infected more than 500 Americans and caused eight deaths is hurting sales of vapes, which have been on an upsurge as more states legalize cannabis for medical or recreational use.

Research from Jane Technologies Inc. analyzing dispensary sales data found the market share for vapes was down 15% in the first week of September with medical states, including Oregon where one victim was linked to legal products, and in states with high levels of cannabis tourism, such as Nevada and Massachusetts, showing the worst declines.

Vapes share of sales fell 65% in New Mexico, was down 62% in Oregon, down 37% in Massachusetts and 32% in Nevada, according to the data, as reported by New Frontier Data, a data company that gathers intelligence for the cannabis sector.

As vape sales have fallen, consumers have bought more flower, pre-rolls and tinctures.

“Given an estimated 273 million vape pens sold through legal U.S. markets from 2017-2019, a suspected strong connection of the outbreak of illness to unregulated products will likely fuel calls for legalization, standardization, and quality controls to minimize risks,” New Frontier wrote Monday.

Last week, the FDA said it has launched a criminal probe of the crisis, looking at black-market THC products, which are suspected to be the key culprits, based on information patients have provided to the Centers for Disease Control and Prevention.

In particular, investigators are looking at the use of vitamin E acetate, a compound often used as a cutting agent to allow black market operators to use less pure cannabis oil when filling cartridges. While vitamin E is considered to be safe as a dietary or health supplement ingested in capsule or pill form, it can cause respiratory illness including pneumonia when inhaled.

Against that background, shares of accessories maker Greenlane Holdings Inc.GNLN, -3.08%  fell 3.7% Monday and are down 58% in the last three months. Turning Point TPB, -0.96%  was up slightly, but has lost about 47% of its value in the last three months.

Elsewhere in the sector, a banking bill that would allow financial institutions do business with cannabis companies without fear of federal enforcement action is expected to be put to a vote in the House this week, according to advocacy site Marijuana Moment.

The bipartisan Secure and Fair Enforcement (SAFE) Banking Act cleared the Financial Services Committee back in March and will be put to a floor vote on Wednesday, according to the site. The continued federal ban on cannabis has made it risky for banks that are federally insured to serve the new legal cannabis sector, preventing companies from tapping capital markets.

GW Pharma stock GWPH, +1.12%  rose 2.8%, after the company said the European Commission has granted approval for its cannabis-based drug Epidyolex for the treatment of seizures in patients with Lennox-Gastaut syndrome or Dravet syndrome, two severe types of childhood epilepsy.

The drug, which is already approved in the U.S. under the brand name Epidiolex, will now be available to children of 2 years of age and older across Europe. The news “marks a significant milestone, offering patients and their families the first in a new class of epilepsy medicines and the first and only EMA-approved CBD medicine to treat two severe and life-threatening forms of childhood-onset epilepsy,” Chief Executive Justin Gover said in a statement.

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Canopy Growth Corp. shares CGC, -0.55% WEED, +0.68%  were up 0.9%, Cronos CRON, +0.10%  as up 1% and Tilray TLRY, -0.86%  was up 1%.

Aurora Cannabis Inc. ACB, +2.39% ACB, +2.40%  was up 4% and HexoHEXO, +0.92%  was up 5%. Organigram OGI, -0.48%  rose 0.7%, Green Growth Brands GGBXF, +0.84% GGB, +0.00%  was up 2.7% and Aleafia HealthALEAF, -1.43% ALEF, -1.09%  was down 1.2%.

The ETFMG Alternative Harvest ETF MJ, -0.37%  was up 0.7%, and the Horizons Marijuana Life Sciences ETF HMMJ, +0.87%  was up 2.3%.

The S&P 500 SPX, +0.06%  was down 0.1% and the Dow Jones Industrial AverageDJIA, +0.08%  was down 0.2%.

* This article was originally published here