Fly News Breaks for October 9, 2019
Oct 9, 2019 | 09:01 EDT
Craig-Hallum analyst Eric Des Lauriers notes that the vaping crisis has taken a turn for the worse as severe respiratory illnesses have injured over 1,000 and claimed the lives of 18. Most patients reported using illicit vapes containing THC, the primary psychoactive compound in cannabis, while others reported using nicotine-only vapes, perplexing health officials, he notes. The analyst believes vape additives - not cannabis or nicotine - are causing the outbreak and researching the many additives found in vapes will take time, creating near-term headwinds. Ultimately, he sees certain additives being banned, not vaporizers as a whole. Longer-term, the vape crisis will be an industry tailwind, underscoring the need to regulate cannabis, he argues. The analyst sees less than 1% of Green Thumb Industries' (GTBIF) sales currently at risk, but in a worst-case scenario, the company could see about 25% of sales at risk. Even without vapes, he believes Green Thumb Industries can generate $1B-plus revenues with its existing licenses. Additionally, the analyst sees virtually no impact to Village Farms' (VFF) current revenue outlook.
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