Pax Labs Inc. valued at $5 billion

Pax Labs Inc, a San Fransisco-based start-up that produces vaporizers, was recently valued at $5 billion. according to Bloomberg. Discreet, portable and high-tech, Pax vaporizers are a huge success in the United States, as cannabis consumption changes.

Frequently dubbed the 'iPhone of cannabis», the Pax resembles a high-tech USB key. Its discretion makes it an asset of choice for consumers on the move, who can modify its settings (temperature, light...) via a smartphone app.

A controversial cousin

The vape is based on the same operating principle as the Juul, a vaporizer for concentrated nicotine. And with good reason: they were both created by James Monsees and Adam Bowen.

The original company was split into two separate entities last year, Juul Labs and Pax Labs, surely to avoid the Juul controversy rubbing off on Pax, but also because the two products are subject to different regulatory frameworks.

Juul has been the subject of controversy, as it has become widely popular among teenagers. Although e-cigarette consumption is less toxic than traditional cigarettes, the nicotine concentration and fad surrounding vaping are causing addiction problems among teenagers. To combat this «epidemic», the FDA has issued an ultimatum to the producers of the most popular devices to prove that they can keep their product out of the hands of minors. Today, an investigation is underway to determine whether Juul Labs marketed its product for teenage consumption.

Vaporizers are sold empty, without cartridges. The cartridges are sold empty to producers who fill and distribute them (often in the same places as the vaporizer), a way of protecting themselves from consumer use, even though the products are more or less clearly intended for the consumption of concentrates, whether nicotine for the Juul or cannabis for certain versions of the Pax (the Pax 3 and the Pax Era).

The company's latest fund-raising totaled $20 million-a round «deliberately small» according to Pax's new CEO, Bharat Vasan, and reduced to investors already involved in the company. Although legally separate, the two companies also share the same investor base.