CFN Media

July 20, 2017 09:00 ET

Heating Up: Who Benefits from the Growth in Vaping? -- CFN Media

SEATTLE, WA--(Marketwired - Jul 20, 2017) - CFN Media Group ("CannabisFN"), the leading creative agency and digital media network dedicated to legal cannabis, announces the publication of an article examining the growth of vaping as an alternative to smoking, and Nutritional High International Inc.'s (CSE: EAT) (OTC: SPLIF) FLI liquid concentrate product line. Smoking tobacco has been popular for thousands of years, but vaporizers are quickly replacing the habit with a healthier alternative -- especially in the cannabis industry. These vaporizers provide a cheaper and healthier alternative to smoking, while providing a smoother and more socially-acceptable experience.

Vaping Gains Popularity
Tobacco smoking began as early as 5,000 to 3,000 B.C. and became widespread after the development of automated cigarette-rolling machines. By the 1600s, tobacco had become a major cash crop within the United States and most civilizations embraced the practice by the mid-17th century. German scientist Frtiz Lickint published the first paper citing formal statistical evidence of a lung cancer-tobacco link and governments began taking action in the 1980-90s.

Herbert Gilbert invented the first smokeless non-tobacco cigarette in the 1960s by replacing burning paper and tobacco with flavored steam that contained nicotine. But, it wasn't until 2003 that Chinese marketer Hon Lik successfully marketed a vaporizer product. While there's disagreement on whether vaping is healthy, most people agree that it's a much safer and healthier alternative to traditional cigarettes filled with harmful chemicals.

Modern vaporizers have become increasingly popular thanks to their widespread availability, perceived healthiness, and low-cost relative to smoking. While nicotine vaporizers are the most common variety, the cannabis industry has embraced the technology as a novel way to precisely control dosing of tetrahydrocannabinol ("THC") and cannabidiol ("CBD") in a socially-acceptable format compared to smoking cannabis cigarettes.

Beneficiaries of These Trends
Vaporizer providers operate using a unique and highly-attractive business model. In addition to buying a vaporizer, consumers must purchase juice cartridges that are vaporized before being consumed. This razor-razorblade business model generates both upfront and recurring revenue for companies operating in the space. At the same time, vape juice tends to have a relatively high profit margin given the regulated nature of the industry.

Most vaporizer brands purchase their hardware from China and liquids from the lowest cost wholesale producer. Often times, this translates to poorly designed -- or even unsafe -- hardware and vape juice that is cut with agents designed to thin out cannabis concentrates to work with low quality vaporizers. Some manufacturers even use polyethylene glycol ("PEG"), which is classified as a carcinogen by the International Agency for Research on Cancer.

Investors may want to consider higher quality brands due to their higher brand loyalty and healthier profit margins. For example, Nutritional High International Inc.'s FLI liquid concentrate product line is manufactured through a process of cold ethanol extraction and short path distillation to ensure a high level of consistency and purity for discerning customers.

The company's licensed tenant Palo Verde sells these products through various dispensaries in Colorado, where customers pay a premium for high-quality, clear, and pure cannabis oils. In addition to vaporizer cartridges and syringes filled with oil, Palo Verde is also moving toward introducing a full line of cannabis-infused edible products to these same customers under the FLI brand. Management hopes to generate recurring revenue through these sales, as the distribution is expanded into more dispensaries.

Looking Ahead
It's no secret that vaping is well-positioned to become the preferred method of cannabis consumption relative to smoking. In addition to being healthier, vaping has become increasingly ubiquitous, cheaper, and more socially-acceptable. The companies best-positioned to profit from these trends will be those focused on high-quality products that compete on value and quality rather than purely on price.

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About CFN Media
CFN Media (CannabisFN) is the leading creative agency and media network dedicated to legal cannabis. We help marijuana businesses attract investors, customers (B2B, B2C), capital, and media visibility. Private and public marijuana companies and brands in the US and Canada rely on CFN Media to grow and succeed.

Except for the historical information presented herein, matters discussed in this release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Emerging Growth LLC, which owns CFN Media and, is not registered with any financial or securities regulatory authority, and does not provide nor claims to provide investment advice or recommendations to readers of this release. Emerging Growth LLC may from time to time have a position in the securities mentioned herein and may increase or decrease such positions without notice. For making specific investment decisions, readers should seek their own advice. Emerging Growth LLC may be compensated for its services in the form of cash-based compensation or equity securities in the companies it writes about, or a combination of the two. For full disclosure please visit:

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