Through Oct 1, the US Centers for Disease Control and Prevention (CDC) has linked vaping to 18 deaths in 15 states and 1,080 lung-injury cases nationwide.

While the cause of the health problems is unknown, proposed crackdowns are taking a toll on vaping, one of the fastest-growing sectors of the legal marijuana market.

The legal cannabis sector has attracted investments from major companies such as Constellation Brands, a Fortune 500 company that produces and markets beer, wine and spirits.

But the long-term outlook now appears uncertain. Investment firm Stifel Nicolaus cut its rating of Aurora Cannabis stock to sell from hold and slashed the price target, an estimate of a stock's fair value, by 30 percent.

Shares of Canada-based Canopy Growth, Aurora and Cronos Group are down about 29 percent each since Aug 1, and Tilray is down about 40 percent.

Short-sellers investors who bet that a stock's price will fall have benefited from the vaping controversy. S3 Analytics said short-sellers lost $1.78 billion when cannabis stocks jumped in the first quarter of 2019, but made $336 million in the second quarter and about $1.76 billion in the third quarter as shares fell amid concern about vaping.

US President Donald Trump has proposed a national ban on flavored vaping products, and the governors of major states, including New York and Massachusetts, have suggested similar bans. San Francisco has proposed a ban on all vaping products.

Vaping, the inhalation of vapor through the mouth from a battery-operated electronic device that heats and vaporizes a solid or liquid, initially was believed to be less harmful than smoking cigarettes, because there is no combustion of tobacco or the paper used to wrap it. While the cause of the health problems is unknown, the proposed crackdowns are taking a toll on vaping, one of the fastest-growing sectors of the legal marijuana market.

The CDC said 70 percent of those reporting health problems related to vaping are men under age 35 with a history of using tetrahydrocannabinol, or THC, the psychoactive element in marijuana that gives users a "high". However, US government investigators have not conclusively linked the vaping illnesses and deaths to THC.

"No single product or substance has been linked to all lung injury cases," the CDC said in a report. "The outbreak is occurring in the context of a dynamic marketplace for e-cigarettes, or vaping, products, which may have a mix of ingredients, complex packaging and supply chains, and include potentially illicit substances."