Cannabis vape sales tumbled 26 per cent in the two months following the health crisis that has killed dozens and sickened thousands, according to new industry research.

Legal sales peaked at a combined US$160 million in August in the states of California, Colorado, Oregon, Nevada and Arizona, according to a report from BDS Analytics and Arcview Market Research.

As reports of vaping illnesses grew and the Centers for Disease Control and Prevention disclosed the first deaths related to the practice, sales slumped to US$126 million in September and US$119 million in October. This was significant for the legal cannabis market as a whole, where vapes accounted for approximately 25 per cent of total sales in the first three quarters of 2019.

“The news from the CDC, and the wide and immediate spread of information and misinformation in its aftermath, quickly took its toll,” BDS and Arcview said in their report.

It appears the damage didn’t spread much beyond the vape category, as September sales of all non-vape products fell 4.6 per cent, only slightly more than the 4.1 per cent decline in the prior September, which is traditionally a slow month.

Retailers felt the effect first, followed by concentrate manufacturers and makers of vaping devices, according to the report. However, manufacturers at the high end of the market “also saw the first indications that the vape scare may rebound to the benefit of the legal market,” as the illnesses are increasingly linked to illicit products and the use of vitamin E acetate as a cutting agent.

“Anecdotal evidence from device makers suggests that the 21 per cent decline seen in the legal vape market in September was modest compared to a drastic drying up of demand in the illicit channel,” the report said.

It’s hard to tell how much of the slump in pot stocks, which began last March, can be attributed to the illnesses, BDS and Arcview said. “Only in retrospect will we know if the crisis represented a post-correction buying opportunity.”