Cannabis Technology House is an Israeli startup founded by former Altria employees. The company plans to start selling its devices in 2020. It says its devices won’t have the health concerns that come with vape liquids.
The devices have also been designed to work with natural tobacco—something that would compete with IQOS, a heat-not-burn device for tobacco only that’s been sold by Philip Morris International Inc. around the world for years and just launched in the U.S. with marketing by Altria Group Inc., which also owns a 35% stake in Juul.
“People told us we’re crazy to go after natural flowers; the future is with vape. And then the vaping crisis happened,” says Greg Kunin, the company’s co-founder. Its devices heat but don’t burn the original form of cannabis. “Because its natural, no one can add anything to it,” he says. “The consumer doesn’t have to worry if there is Vitamin E or some other substance.”
Altria and Juul both declined to comment for this story.
Like big tobacco, Kunin says the company’s regulatory strategy will be international. It won’t start in Israel, where recreational cannabis isn’t legal. It has a two-pronged approach: If it decides to market its device first for tobacco, it is already in talks with two big tobacco players and will work with one of them, probably starting in Asia—the Philippines or Japan. Meanwhile, with cannabis, its regulatory strategy might have it start in Canada, come to the U.S. later and work with the FDA to “develop socially responsible products.”
Such approaches are popular among startups, Green Sky Strategy’s Quigley says. “Portugal is viewed to be on the pro-cannabis side, and there’s a lot happening in Mexico where medical marijuana is legal.”
Thinking through regulation, Kunin says, is just as important as coming up with a solid product. “If you don’t get the right balance you can have the Juul effect—it was crazy successful then the regulation came and it all stopped.”
Though Juul has curtailed its marketing and withdrew its flavored products before a federal ban last week, it has remained a punching bag for vaping foes and a financial albatross for Altria, which was forced to write down its stake in the company last year.