Who's Who Among Cannabis Hardware & Vaping Suppliers? Zuanic & Associates Take A Deep Dive

Are you curious about the key players, their standings and the driving forces in the cannabis hardware and vaping sector? In this in-depth report, senior analyst Pablo Zuanic from Zuanic & Associates provides some answers.

Smoore Holdings: Leading the Way

Smoore International Holdings Limited SMORF, the world's largest supplier of vaping product components leads this dynamic industry. With a range of atomization technology solutions, they serve various segments. In the first half of 2023, the company generated 5.1 billion RMB (~$684.7 million), with nicotine delivery as its primary domain.

"Smoore Holdings is a powerhouse in the vaping industry, with an impressive 88% of sales coming from corporate clients. This demonstrates their stronghold in the nicotine delivery segment,” Zuanic wrote.

In their arsenal is the CCELL division, transforming the cannabis vapor landscape.

CCELL Distributors

Several entities in the U.S. supply CCELL products to the growing cannabis sector.

"Jupiter Research TLLTF and Greenlane Holdings GNLN are major distributors, with Jupiter taking the lion's share at 40-50% while Greenlane maintains a solid 25-30% share," says Zuanic.

In the third spot is 3WIN Corp, with an approximate 15% share; CannaBrand Solutions completes the roster. According to the report, these distributors play a crucial role in the industry's growth.

Jupiter Research, the largest among these distributors is a key supplier of inhalation hardware across numerous states, serving several major public and private multi-state operators (MSOs).

“The company sells inhalation hardware in 39 states and 15 countries in total; it supplies more than 1,000 brands across the world (the products are used in CBD, med, and rec cannabis),” Zuanic wrote. “As per its investor deck, Jupiter supplies over 15 major public and private MSOs [such as Curaleaf CURLF, Verano VRNO, and TerrAscend TRSSF].”

Following its acquisition of KushCo Holdings, Greenlane Holdings is the second-largest distributor of CCELL hardware.

With a footprint across over 400 cannabis companies in the U.S. and Canada, Advanced Vapor Devices (AVD) is a cannabis company that focuses exclusively on providing hardware solutions tailored to cannabis extracts.

ALD Vapor, a supplier of vape parts to STIIIZY, leads the California market with 24% of the vape share, having entered the cannabis vaping sector through an agreement with Shryne Group, a prominent seed-to-sale operator.

Ispire Technology is involved in the development, marketing, and distribution of e-cigarettes and cannabis vaping products. The company generated $116 million in sales in 2023, with 65% from e-cigarettes and 35% from cannabis vaping primarily in the United States.

The CCELL Edge: Technology, Innovation, and Patent Disputes

CCELL's ceramic heating technology ensures efficient vaporization of thick cannabis oils, eliminating issues such as burning or leaking.

“The ceramic heating technology used by CCELL allows thick cannabis oils to be vaporized into dense and flavorful clouds without burning or leaking. The CCELL trademark looks to be viewed within the cannabis industry in the same way Intel is viewed by the computer industry,” the analyst noted.

However, a patent dispute led to a "Vape Intellectual Property Infringements Complaint" in 2021, resulting in a ruling by the U.S. International Trade Commission in favor of AVD in April 2023.

Responding to Market Trends: Future Prospects and Adaptation

The report recommends that CCELL and its distribution network adapt to evolving market trends. These include a shift towards larger containers and the emergence of new segments like live resin and rosin.

Meeting these challenges with innovative solutions is crucial. Smoore/CCELL, equipped with a scale, a robust balance sheet and substantial investments in research and development, is well-positioned to respond and regain market share in the dynamic cannabis vapor industry.

“The fact that CCELL has been able to maintain most of its MSO client base (although if we go by $ sales growth of MSOs vs. CCELL distributors like Jupiter and Greenlane, its slice of the MSO business has declined), speaks well about the quality, reliability, cost competitiveness, and customer service, offered by the CCELL ecosystem,” Zuanic concluded. “Still, we believe that CCELL and its distributors will need to adapt cost-wise, price and margin-wise, and in terms of capital commitment) to compete.”

Photo: Benjamin Balazs via Pixabay.