With federal researchers announcing Friday that they’d found a toxin in the lungs of every patient they tested with vape-related injuries, American’s legal cannabis sellers can hope for a solution to a mystery that’s killed 40 people and choked the young industry’s sales growth. A collapse in vape demand led to a 9% drop in cannabis revenue from the month of August to September, writes analyst Bobby Burleson of Canaccord Genuity.

The summer outbreak in lung injuries affected 2,000 people across every state but Alaska. On Friday, the U.S. Centers for Disease Control and Prevention said that it had identified a potential cause. Its lab found vitamin E acetate in fluid from the lungs over all 29 patients it has tested. The chemical is an adulterant used by some producers to thicken the liquid in their marijuana vape cartridges, especially within the black market. Although vitamin E acetate can be harmless when swallowed or applied to the skin, it can hurt the lungs when inhaled.

“This is the first time that we have detected a potential chemical of concern in biologic samples from patients with these lung injuries,” said the CDC in its announcement. The agency is advising people to avoid vaping products that contain THC, the intoxicant derived from cannabis—particularly products obtained illegally. Among hundreds of injured patients who’ve answered surveys, most reported using black market THC products, with just 11% saying they only used nicotine-containing vapes.

The crisis has caused consumers to avoid legal vapes, too. Citing point of sale data from BDS Analytics, Canaccord’s Burleson says that vape sales fell around 20% from August to September in the five states surveyed (Arizona, California, Colorado, Nevada, and Oregon). Sales of the more traditional dried flower products picked up some of the slack, but not enough to prevent a deceleration in the industry’s previously-strong revenue growth. After registering year-over-year growth of 20% in August, revenue in the five states surveyed were up 14% in September, according to BDS.

Vaping has been especially popular in California. So the crisis hurt the state’s sales more than elsewhere. September revenue there was up just 8% year-over-year.

Write to Bill Alpert at william.alpert@barrons.com