The Juul-ization of weed
Juul Labs, the signature brand of the last decade’s e-cigarette craze, is having a tough fall.
Last month, it agreed to pay nearly $440M to dozens of states for marketing to teenagers. (The company admitted no wrongdoing.) It awaits an FDA decision on whether it can continue selling its products and has reportedly called on two investors in a bid to stave off bankruptcy. Starting next week in San Francisco, it faces a class action trial against school districts nationwide.
What got Juul in this much trouble, of course, was selling mango and crème brulee flavored nicotine juice pods in ways that infuriated parents. Flavored nicotine products like these are now federally banned, though there’s a big loophole.
But despite Juul’s struggles, some high profile California brands, including Jeeter and Raw Garden, are selling vapes that edge closer to the third rail for any adult product: appealing to kids. They could have implications for the broader cannabis industry as it prepares for the big dance of federal regulation.
Until now, for the most part, the industry and regulators have observed a detente: The industry can sell fruit-flavored gummies, infused chocolate and dessert-inspired strain names as long as they don’t obviously try to attract kids. For example, many states prohibit fruit-shaped gummies.
But with California regulators occupied elsewhere, some companies are pushing the envelope on what they can sell. There are “definitely brands that throttle the line,” Harris Bricken attorney Griffen Thorne said. (He wasn’t referring to any particular brand.)
What is a Juul-like vape?
The cannabis and nicotine vape industries have common roots. Cannabis vape maker Pax spun out of Juul in 2017. But the companies are no longer operationally connected. The industries have similarly split; both cannabis and vapes have had their share of struggles, but they rarely overlap. And cannabis brands, for the most part, have sought to avoid any suggestion of marketing to kids.
So what’s the difference between a cannabis vape cartridge and a more Juul-ish weed product? It’s a judgement call based largely on a product’s potential to be used by the industry’s opponents. Cartoony brands like Jeeter Juice and Raw Garden’s new 90%+ THC Everdrop cartridges marketed with fruit images aren’t playing it safe. Neither are StateHouse Holdings’ (formerly Harborside) Sublime Fuzzies Fruities infused joints. (None of the companies responded to questions.)
- On Election Day, Californians vote on a measure to repeal the state’s sweeping ban on flavored tobacco.
A judgement boils down to two questions: 1) What does the packaging and marketing look like? 2) How do the products taste?
The packaging question is more straightforward. Every state has its own rules but they generally bar, in broad language, any kind of cannabis packaging and marketing that could be perceived as appealing to kids.
- California regulators may soon explicitly ban depictions of cartoon characters. However, the Department of Cannabis Control (DCC) hasn’t ever called out a company for kid friendly marketing.
Flavor is a more complex issue, because it involves the additives giving the products their flavor. Whether something tastes kid-friendly is harder to quantify than how it looks, but there are certain flavors, those evocative of candy and ice cream, for examples, that raise red flags.
- For now, California doesn’t restrict any specific vape additives, but the DCC has proposed regulations, likely to take effect early next year, that would limit the flavors added to inhaled products “to those that are naturally occurring and contribute to the flavor of cannabis.”
- New York’s proposed MED rules are stricter, banning “any flavors or flavoring agents, except for cannabis-derived or hemp-derived terpenes.”
The industry’s current flavor equilibrium holds because it’s understood that a joint of cherry chem doesn’t taste that much like cherry flavored nicotine juice or an actual cherry. But the distinction has gotten blurrier.
“Enjoyable and uplifting products for adults.”
Oregon’s top selling vape brand, Buddies, has a fruit line called BBrand, with flavors like strawberry and lime sorbet. The brand is also available in California and Washington.
Buddies’ Chief Revenue Officer Colin Hobbs said the vapes are “Enjoyable and uplifting products for adults.” He’s close to 40 and said he prefers a flavored vape. Evidently, he’s not alone. In Oregon, BBrand accounts for eight of the top ten vape SKUs, he said.
“Juul was absolutely targeting kids,” Hobbs said, but that’s not what BBrand does. He called cartoonish packaging “against our ethos,” and didn’t seem too worried about federal legalization changing the rules anytime soon.
Like many of its fruit-flavored competitors, the brand flavors its products with natural botanical terpenes derived from fruits. In the wake of the 2019 vape crisis, Oregon banned non-cannabis derived terpenes from cannabis products but they’re now allowed again. Hobbs said BBrand packaging hasn’t been a problem in the states where its available.
- The blame for the vape crisis, which made hundreds of users gravely ill, and killed several of them, usually falls on vitamin E acetate, a chemical found to be used by some unlicensed manufacturers.
In Colorado, Native Roots’ Revel vape line also uses botanically derived terpenes to produce flavors like wild blueberry and peppermint bark. VP of Marketing Buck Dutton said flavored vapes are popular and account for about 15% of the company’s vape sales. Unlike Juul, “our flavors such as Cantaloupe and Pumpkin Spice–are developed for an older, more discerning consumer,” he wrote.
“We’re aware of [flavored vapes] and we’re concerned about them,” said Dr. Lynn Silver, a pediatrician and program director at the non-profit Public Health Institute(PHI). This year the cannabiz defeated PHI’s legislative campaign to make California cannabis product labels much larger, brighter and more specific.
- Silver cited a study that 80% of kids who use tobacco started with a flavored product.
The issue for public health advocates isn’t just appealing to kids. Silver said there’s not good data on what additives are going into vapes at what ammounts. Not much research has been done on inhaling terpenes, but what’s out there indicates that pinene, for example, shows respiratory toxicity.
“Blanket approval of products because they’re botanically derived makes no sense,” Silver said. She favors a policy like Canada’s which bans almost all vape flavor additives.
As the federal legalization process begins, the industry must prepare for far more scrutiny and showboating on kids’ use than it has encountered before. Flavored vapes paint a target on the cannabiz far larger than the market share these products command.
The vape crisis, and Juul’s travails, both this suggest ways flavored vapes could cause problems for the whole industry, not just flavored vape brands.