Demand for vaping products in legal U.S. recreational states has slipped anywhere from 5% to 25% month over month in the wake of a string of lung illnesses linked to vaping, an analyst says, adding that U.S. marijuana stocks like Greenlane (GNLN) and KushCo Holdings (KSHB) that depend on vapes for a large portion of sales were among the most exposed.

However, the analyst, Canaccord Genuity's Bobby Burleson, said in a research note on Monday that the respiratory illnesses were likely to more quickly steer customers away from the illicit pot market.

"In our view, recent reports of acute respiratory illness linked by regulators to THC vaping (and e-cigarettes) should ultimately accelerate the shift away from the black market for cannabis products in the US," he wrote.

Near-term impact overall on THC vape demand, he said, was "mixed." He said medical dispensaries were largely unaffected. In states where recreational pot is legal, he said, the drop in vape demand had been largely counterbalanced by higher sales in edibles, joints and other weed products.

As of this week, nine people in the U.S. have died from the vaping-related illnesses. Investigators haven't yet pinned down an exact cause. Five-hundred and thirty illnesses have been reported across 38 states since April. The FDA at that time first launched an investigation into seizures that might have been related to vaping.

Investigators looking into the deaths and illnesses have focused, in part, on vaping products — including those that contain THC — acquired on the illicit market. New York state has homed in on products that contain vitamin E acetate, sometimes used as a thickener. Vaping startup Juul faces a federal criminal probe in California.

Burleson also said officials in Oregon were looking into whether one vaping-related death there might have been linked to purchases in legal cannabis shops.

"While we are likely early days in resolving these industry challenges, longer term we expect associated revenue and EBITDA impact to our vape-related coverage names to be more modest than the sell-off suggests," Burleson said. EBITDA refers to earnings before interest, taxes, depreciation and amortization.

He also noted that "vape is a lower margin business and THC vaping illnesses have largely been a black market phenomenon (with the exception of one case)."

The scope of the investigations has widened along with vaping's popularity — both for tobacco and marijuana.

Burleson said that Greenlane, a distributor of vaping devices, drew around 80% of its sales last year from vaping products. Greenlane had its IPO earlier this year.

TILT Holdings, the product of a multi-company merger across the U.S. and Canada, gets 77% of sales from vapes. For KushCo, a distributor of a variety of supplies for the cannabis industry, vaping accounted for 69% of sales.

KushCo earlier this year also had to deal with tariffs on vaping products and other supplies it gets from China.

KushCo, which trades over the counter, tumbled 11% in the stock market today. The stock has fallen for much of the year. Greenlane sank 10.5%.

Similar to other marijuana stocks, Greenlane stock gets weak ratings from IBD. It has a 4 Composite Rating, of a best-possible 99, and a 5 EPS Rating.

As the U.S. tries to contain the vaping illnesses, Canada is gearing up to allow legal sales of vaping products and other products, like beverages and edibles, later this year. Currently, Canada allows the sale of dry buds, joints, tinctures and capsules.

Among Canadian marijuana stocks, Cronos Group (CRON), which has said it plans to make vaping a focus, fell 8.6%. Canopy Growth (CGC) lost 6.2%. Aurora Cannabis (ACB) sold off 6.3%. Tilray (TLRY) gave up 5.2%. Aphria (APHA) sank 5.8%.