Learning Lessons from Troubled Tobacco

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(This post originally appeared on Cannabis Business Executive)

When the Food and Drug Administration (FDA) declares that use of a product has reached “epidemic proportions,” industries tend to notice. The FDA did just that on Wednesday, September 12, in regards to teenage and minor usage of e-cigarettes manufactured by companies like JUUL and sold by numerous retailers. In warning letters sent to 1,100 retailers, the FDA is now requiring that these companies document how they will improve preventing sales to minors.

In a separate story this week, the Centers for Disease Control reported in its National Youth Tobacco Survey that approximately 1 in 11 (or 9%) of all middle and high school students have used cannabis in e-cigarette form, aka vaping. That usage rate grows quickly among those students who reported vaping in the past, of those children 31% report using cannabis in vaping form. Unfortunately, these results are not one-off outliers, they reinforce what has been reported elsewhere in the U.S. and Canada.

Preparing for Federal Oversight

With vaping becoming an increasingly popular form of consumption due to a myriad of reasons like convenience, value and flavors, it’s imperative that all cannabis players, from growers to dispensaries, understand their role in preventing underage usage. A number of dispensaries continue to be identified as bad actors, not checking IDs or selling to minors, and it’s great that they are being removed from the cannabis marketplace.

But at a core level, cannabis needs to look at what is occurring in e-cigarettes and traditional tobacco and prepare itself for increased scrutiny. Because while the industry has been working with local and state authorities, there is nothing quite like a federal agency coming to town.

Time for Tough Questions

Preparing for that federal audience requires being prepared for tough questions. And one of the most obvious questions cannabis will face is whether or not the products being produced for vaping and edibles are too child centric? That is, fruit flavors in vaping oils, candy flavors in gummies and chocolate bars—do they have dangerously high levels of appeal to minors and children?

To understand the consequence of the answer “yes” to that question, again, look to the tobacco industry. Menthol, candy and fruit flavored tobacco products continue to be banned or severely limited across in municipalities across the U.S. due to their appeal to minors and children. For many states looking to curb underage tobacco usage, making the product less childlike is a strategy they are pursuing.

And with the FDA coming down on hard on JUUL, other e-cigarette makers and their retailer partners, it would seem as though the federal government is taking a similar approach to vaping products.

Naturally, this type of scrutiny is going to be unwelcome for many in the cannabis industry (and readers may think this type of analysis is unfair), but it’s likely inevitable.

Getting Ahead Now

From our research at High Yield Insights, underage usage as been identified as a key hurdle for the industry to tackle. Slightly more than 40% of current cannabis consumers and 33% of cannabis industry employees believe that underage usage could derail future legalization efforts, cited as frequently as public usage and the current political climate. Every indication from local, state and federal agencies is that they are actively trying to curb underage usage of tobacco, while also starting to understand underage usage of cannabis.

It’ll be years before cannabis is legalized federally, and cannabis has the opportunity to take proactive steps in prevention, education and tracking. Being caught flat-footed here may mean a total disruption of your business.

Questions? Comments? Connect directly by emailing me (eric@highyieldinsights.com)

Eric Giandelone