Halo Labs Inc (NEO:HALO) Rising Vape Sales and Safety Testing During Current Vape Climate
Halo Labs Inc (NEO:HALO) (OTCMKTS:AGEEF) (FRA:A9KN) CEO Kiran Sidhu and CSO Katie Field join Midas Letter to discuss the vape crisis engulfing the cannabis industry in the United States. The company provided a statement recently regarding its DabTabs technology, certifications, and 3rd party testing reinforcing that DabTabs are fundamentally different to current vaporization technologies. DabTabs are manufactured in the United States, in an ISO 9000-2015 certified facility and tested by independent laboratories certifying the vaporizer product do not leach any material and contain no chemical additives. Halo Labs have in fact seen an uptake in vape sales recently. Halo Labs wants to educate consumers to use regulated products that are safe and to move away from using black-market counterparts.
James West: I’m joined now by Kiran Sidhu and Katie Field, respectively the CEO and the Chief Strategy Officer of HALO Labs, and of course, by my cohost, Todd Shapiro. Welcome, guys.
Katie Field: Thanks for having us.
Kiran Sidhu: Thanks for having us.
James West: Let’s start off with the discussion surrounding the vape crisis engulfing the cannabis industry in the United States. The Centre for Disease Control has issued a warning; the State of Massachusetts has full-out banned vaping. How is that going to affect, or not affect, HALO Labs, and tell me why.
Kiran Sidhu: So first of all, it’s our understanding, speaking to our lawyers and lobbyists, that the State of Oregon right now is going to wait to understand what the Federal guidelines are. They’ve issued some stern warnings about cautioning people about using vapes in general. California’s Department of Health also has issued warnings, but the Governor has not acted there, so we don’t anticipate a ban.
There was some talk with LA City Council people about initiating a ban, and we’ve heard that’s dissipated as well. As far as how it’s impacted us, Katie can talk about that.
Katie Field: Sure. We’ve actually seen a little bit of a rising tide in vape sales, so it’s something where potentially consumers were thinking something might happen, so they might want to stockpile a little bit. But the other dynamic I think that’s important to note is that it’s drawn awareness. The CDC’s guidance has drawn awareness to the fact that actually, the cartridges from the black market are the ones that may be causing this illness.
Now of course, there’s more root cause, diagnosis, you know, they really have to get to the bottom of it. But potentially, it can be driving consumers where they should be buying vape cartridges all along, which is from regulated manufacturers and retailers in states that have legal marijuana programs.
Todd Shapiro: If you don’t mind, is it frustrating for you guys, knowing that there’s a black market that exists, obviously selling these vape pens that aren’t compliant, that aren’t being monitored? We’re not quite sure where people are getting them, how they’re made…really, how it impacts your business, because of the reputation of them?
Katie Field: Absolutely. No, it’s very frustrating. I think we want consumers to be educated; that’s really what we want. And of course, when we manufacture, we’re using natural cannabis concentrate; there are no additives. Not only that, our materials aren’t grown with those pesticides and those additives that are coming into the black market vape cartridges.
So consumers really do need to educate themselves, and so it’s frustrating, but at the same time, it’s a good time in our history for the conversation to shift to, again, regulated products that are safe for consumers.
James West: Kiran, you mentioned that your aesthetic was derived from the concentrates industry, which automatically implies that you’re a purist in the essential oil case of the inputs.
Kiran Sidhu: Correct.
James West: So, tell me: why does that, why does being from the concentrates side automatically give you that sort of mindset?
Kiran Sidhu: Because the concentrates are the purest and most broadest-spectrum form of cannabis. So effectively, what we do is we take the raw cannabis, either frozen or dried, and we put them in our columns, and then we extract them. And when they come out, then we purge any residual solvent from the extraction process. And those raw products are known as live resin or shatter or cured live resin, and then there are derivatives like butter and sauce and diamonds, depending on how you purge the residual solvent.
So we have always been a proponent of that. Even though the THC content is lower, you have the full spectrum: the CBN, CBG, all of the C’s as well. So you get a true, you know, a true experience. And in Oregon, about 40 percent of our sales have always been derived by concentrates. When you start going into cartridges or oils, you’re actually going now through a distillation process. And that distillation process is similar to what you do with alcohol. And so you basically evaporate the THC, you recollect it into a pure oil, and then you have to actually add back the natural terpenes, either botanically derived or derived from the cannabis, to give flavour to it.
That’s still 100 percent natural process. And in the old days, what was interesting, before distillation, we were one of the first companies ever to put out carts, and it was the old plastic carts with an old wax wicker that sat on top of the battery. And our oil would always separate, and even in those days, we knew there were tricks, because medical companies use it; they use Vitamin E, they use, you know, polyglycol, PEG, VPEG, all of these products, to line the lungs when people use an inhaler. And we never used it.
So what we used to do was, we used to put out a little flyer saying that you got to treat our cartridges like milk, because if you don’t treat them like milk, they get too hot, they’re going to spoil and separate, you know. Or, if you freeze them too much, then you’re not going to, then they’re going to still separate.
So I mean, that was always sort of our credo, was always to be 100 percent natural, and that’s why we’re so focused on the concentrates.
James West: Okay. So is it safe to say that the principle issue with the health crisis surrounding vaping, is it uniquely to do with the additives that are there to stabilize the main product, which is the resin?
Katie Field: You know, I think that it’s probably too early to tell what the precise cause is, and I, for one, am very grateful that the Federal government is looking like they’re going to start researching and getting to the bottom of it. Potentially, states will be doing the same, and that will be really good. But I do think that is a valid hypothesis, the fact that there are these additives that have been used to keep the consistency of the distillate that is going into the vape pens. So that is definitely one area, but again, another area could be the cartridge itself.
Cartridges, we look at them and we think they’re the same; they’re not the same. It depends on the heating mechanism, is it convective, is it conductive; there are so many factors that go into the vape cartridge hardware itself. And that could be an area where there is disintegration once it’s heated; heavy metals, potentially from the hardware, get caught up in the vapour stream. So there really are, I guess the point is, various hypotheses. The one that you mentioned is one of them, though, and we’ve never put those additives in our concentrate, and we’re proud. We’re proud, and we stand by that.
James West: So tell me how the DabTab and the Shatterizer are going to protect users of HALO’s products from having any health issues.
Katie Field: Sure. So, one thing to keep in mind when we were just touching on the last, the cause of this potential illness, and we talked about convective versus conductive heating. So this is actually the technology that’s within the DabTabs, which means that when you are heating the Dablet, and we’ll get to that in a second, what it does is, it doesn’t directly interact with the oil itself that’s already infused into the ceramic tablet, that’s already been safety-tested and subject to many tests. It’s going through an FDA pathway. And so what happens is, it’s just released and the hot air is what unlocks and activates, and then that creates that vapour stream, versus interacting directly with the metal heating element.
So it’s the hardware, these two elements, which we have two right here. This is the all-in-one, and this is the Shatterizer. But then the oil itself is in this ceramic tablet. Again, they’re subject to certain standards: NSF, ASTM, made in a factory in America, ISO 9000. So, highest standards of purity. Moreover, the oil is encased in it, again, so there’s no interaction with the wick. There’s no, you know, direct interaction with the metallic heating element. So it really is a perfect natural vaporization experience. It’s completely natural, and very, very, very safe. So we’re really proud of that.
Todd Shapiro: When was this product created, and was it created to be proactive in case potential problems with sort of these other cheap vaping methods?
Katie Field: Absolutely, it was created, it was proactive. So the founder, Michael Linders (phon), the CEO of Elo, and he’s a complete visionary. And one of the steps in the process to making this was taking all the other hardware on the market, all the other cartridges on the market, and dissecting them. He calls them his Frankensteins. He has so many of these, and you have to get some photography of it, because it’s just – I remember, you know, growing up, they’d do the Just Say No campaigns, and they’d show us, This is what your lung looks like if you smoke cigarettes – it’s that type of thing. When you peel back the onion and you see what happens to these cartridges when they’re used over time, consumers would really be kind of horrified. This was developed for that purpose exactly. This does not happen to the tablet; the only thing that happens is that the colour changes because you can tell that all the oil has been vaporized, and that’s it. There’s no charring, there’s none of that.
Todd Shapiro: Does that help for longevity, then, for the product itself, in terms of, if you were to buy a DabTab, if you were to buy the Shatterizer, that it lasts much longer, in value?
Katie Field: It actually does. It actually does, and that’s another component of it, too. There isn’t the waste that, with some of the cartridges, you don’t like to burn it at the ends, because maybe the taste isn’t great, or you can’t get it all out. That’s not the case with these, and it’s perfectly dose-able in that sense, as well, which helps the user, the consumer, control their dose. And that’s another great benefit.
James West: So there has been no instances of any HALO Labs product user having a health issue with vaping?
Katie Field: Not at all, and we have many users of our products every month for the past three, four, five years, you know, however long we’ve been in Oregon and then California now – never been an issue. And we know, because we stand by our manufacturing methods, and we stand by the technology that we use, and the hardware that we use.
James West: Right. So they’re essentially safe.
Katie Field: Yes.
James West: Thank you very much for joining us today. We’ll come back to you soon.
Katie Field: Thanks for having us.
Todd Shapiro: Cheers.
Kiran Sidhu: Thanks for having us.
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Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such forward-looking information includes that HALO Labs Inc will be a big, successful company in the cannabis sector; that cannabis use and sales will grow and HALO’s sales along with it; HALO’s intended acquisition of various foreign companies and expansion into the US market; that extraction is and will continue to be a fast growing and profitable sector of the cannabis industry; that HALO will reach $48M in revenues in 2019; HALO’s plans to produce concentrates and sell them in various locations throughout the world; that HALO could be granted licenses to expand; and that it will be able to carry out its business plans.
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