A wealth of evidence suggests that smoking suppresses immune function in the lungs and triggers inflammation and, therefore, it seems reasonable to assume that vaping puts such users at high risk of developing a serious infection from the coronavirus (COVID-19). That being the case, how is this possible threat to one's health affecting vaping-related stocks? 

According to Columbia University pediatrician Dr. Alok Patel, e-cigarettes include chemicals such as propylene glycol, glycerol and flavorings which have the ability to go deep into one's lungs and cause damage and, when people become critically ill from COVID-19 - specifically referred to as EVALI, or “E-cigarette or Vaping-Associated Lung Injury” - this also involves the deep pockets of their lungs. As such, according to the Food and Drug Administration, vaping may leave users with underlying health conditions at higher risk of serious complications.

30 companies are primarily, if not exclusively, in the business of manufacturing and/or selling vaping pens (e-cigarettes) and vaping accessories and/or cannabis extract processors while another 7 companies are tobacco cigarette and marijuana e-cigarette manufacturers. This article analyzes the performance of the largest of the 30 vaping companies and the tobacco companies as a whole since December 31st, 2019. The findings are enlightening.

Before I go into the weeds (i.e. details) let me give you an overview:

• The entire cannabis sector of 319 stocks has gone down:
  • 20.4% since February 28th,
  • 37.9% since the the end of January and
  • 41.3% since the beginning of 2020.
• The 30 vaping related stocks have gone down:
  • 19.9% since February 28th,
  • 32.1% since the end of January and
  • 31.8% since the beginning of 2020.
• The stocks of the 7 big tobacco companies have gone down:
  • 15.1% since February 28th,
  • 24.0% since the end of January and
  • 27.7% since the beginning of 2020.
• To put things into perspective, the S&P 500 has gone down:
  • 25.0% since its peak on February 19th.

I write daily articles for TalkMarkets on the 40 pot stocks that trade above $1/share (i.e. are non-penny stocks) and the following are the performances since December 31st of those pot stocks that are vaping-related:

1. Neptune (NEPT) -49.4%
2. MediPharm (LABS) -48.7%
3. Aurora (ACB) -47.7%
4. Tilray (TLRY) -46.9%
5. Greenlane (GNLN) -33.7%
6. Valens (VNLS, VLNCF) -30.0%
7. AYR (AYRSF) -29.8%
8. Canopy (CGC) -25.4%
9. Cronos (CRON) -11.5%
10. OrganiGram (OGI) -7.5%

The average decline of the above 10 stocks is 28.8% which is almost identical to the 27.7% decline in the tobacco sector and only slightly better than the 31.8% decline for the entire universe of 30 such stocks.

Unfortunately, the COVID-19 pandemic is going to get much worse before it gets better so we should expect further significant declines in all vaping-related stocks for the foreseeable future. It begs the question: "How low can they go?"