Watch Pennsylvania Gov. Tom Wolf Advocate for Adult-Use Cannabis Legalization

The CEO of Juul stepped down Sept. 25 amid mounting pressure and broad investor concern. Altria, the tobacco giant that owns a 35-percent stake in the e-cigarette company, installed its own executive in his place.

But Altria also holds substantial equity in Canadian licensed producer Cronos Group. Beginning in the next few months, by Dec. 16, Canada will see cannabis concentrates and assorted vape products hit dispensary shelves. Vape cartridges sales are expected to surge on top of pent-up demand. Major companies like Cronos Group are prepared to meet that market demand; the company will launch its vaping products under the new brand name Spinach, and it also holds the hemp-derived CBD brand Lord Jones. 

Will the U.S. vaping backlash affect any of that?

Altria’s investment in Juul is very much caught in the federal sightlines, as the U.S. Food and Drug Administration (FDA) moves toward some sort of crackdown on flavored e-cigarettes. President Trump has urged the FDA to remove those products from the market. (Altria stock has fallen 13 percent in the past 30 days.)

The cannabis market, however, remains a bit more insulated from federal pressure; the entire industry remains federally illegal, of course. But the governor of Massachusetts decided to ban all vape sales, for example, including cannabis cartridges, for the next four months while health officials determine the causes of this summer’s vaping-related pulmonary diseases. It’s unclear whether more U.S. states will follow suit—or whether Canadian regulators will address impending vape sales in any way.

As Bloomberg reported this week, industry stakeholders are pointing to the tight federal regulations in Canada’s cannabis market as a safeguard against the uncertainty plaguing the U.S. vape space, which spans state-legal markets and the illicit market. In Canada, health officials purposefully delayed the roll-out of cannabis derivative products, including vape cartridges, for more than year to tighten those rules and craft more nuanced policy. 

Now, regulators in Canada are giving themselves time to examine the vaping-related pulmonary disease outbreak in the U.S. before any products hit dispensary shelves late this year.

“If we can get to the bottom of what the root cause is and we can offer assurances to consumers that that ingredient is not used in cannabis vape pens in Canada, I don’t think it should have any effect on demand,”  Trina Fraser, partner at Brazeau Seller Law in Ottawa, told Bloomberg. “If it is a more systemic problem and these products generally are an irritant or somehow a precipitant to lung disease, that would be devastating to the vape industry.”

But as Bloomberg deftly points out, companies like Cronos Group have kept a strategic foothold on both sides of the U.S.-Canada border. Altria’s investment and guidance has teed up plans to develop vape products (and other cannabis products) for markets in both countries.

How the FDA interprets Trump’s mandate to pull flavored e-cigarettes in unclear. And whether the FDA will seize the opportunity to reach into the cannabis vape market is another open question. But as Canadian companies and U.S. companies have blended themselves through rampant mergers and acquisitions across the international industry, the impact of regulations and reactions in one place must be taken into account elsewhere.