PAX partners with four Canadian cannabis producers as launch of vape market nears

HIGHLIGHTS

1. Aphria, Aurora, Organigram and Supreme will produce cannabis extract-filled pods for the PAX Era vaporizer
2. PAX, which also created the Juul, hired its first Canadian GM earlier in the week
3. Cannabis companies have been spending hundreds of millions of dollars on vape technology in anticipation of what is expected to be a very lucrative market

Cannabis vape technology company Pax Labs announced plans Friday to introduce its pen-and-pod Era device to the Canadian market later this year, with four major cannabis cultivators agreeing to produce Era-compatible pods.

Aphria, Aurora, Organigram and The Supreme Cannabis Company will each produce pods, also referred to as cartridges, in time for distribution as early as Oct. 17 of this year. San Francisco-based Pax, which also created the Juul tobacco vaping device before spinning it off as a separate company in 2017, noted Supreme’s 7ACRES brand will produce vape cartridges exclusively for the Era.

While experts have warned the rollout of cannabis edibles regulations – which includes vape products – will likely not happen fast enough for those products to reach store shelves until late 2019 or early 2020, the industry has reason for optimism whenever vape products do become authorized for sale. Data from several jurisdictions in the United States with legal cannabis markets shows vape products significantly cannibalized demand for dried flower once extract-based products became available.

That is part of the reason why producers have been paying big money to acquire top vaping technology. In late 2018, Canopy Growth bought German vaporizer maker Storz & Bickel – known for its extremely popular ‘Volcano’ desktop device – for $220-million in cash. Less than a month later, Massachusetts-based TILT Holdings agreed to pay US$210-million in cash and stock for Arizona-based Jupiter Research.

Jupiter produces the ‘CCELL’ pen-and-pod system used as a white-label product by more than 700 brands around the world. The acquisition was so significant for TILT that Mark Scatterday, previously CEO of Jupiter, became TILT’s CEO after the deal closed.

For PAX, Friday’s announcement came just two days after Tim Pellerin, previously chief operating officer for the Nova Scotia Liquor Corporation (NSLC), was appointed as the company’s General Manager for Canada.

“As the market grows,” Mr. Pellerin said Friday, “we will continue to bring on more brand partners.”