Who could have imagined the next SARS would be Coronavirus disease (COVID-19) and impacting the cannabis industry? Bird Flu was 2003 with almost no marijuana industry. Here we are in 2020, the coronavirus is spreading and it’s having an impact on the cannabis industry.
Feather Co., a cannabis hardware provider that sources many of its products from China, is experiencing shipment delays of 2 to 4 weeks due to epidemic-related factory shutdowns, according to Chief Executive Officer Pat Lehoux.
Lehoux stated that he doesn’t feel his company will be hit hard by the shortage. This boiled down to ordering massive amounts as a precaution for Chinese New Year. The holiday causes disruptions in shipments during normal years. It will be worse with the coronavirus event.
Curaleaf Holdings Inc., stocked up on about $2 million worth of vapes from a U.S. supplier. That should last about five months, Executive Chairman Boris Jordan said in an interview.
Their competitors may not be able to go for that long if they did not have funding to make big purchases. Those companies may see their profits dwindle lower if input costs rise as a result.
Other fallout from coronavirus
On the other hand, US manufacturers that create vape supplies domestically may actually see some increases. That is if they can step in and fill those gaps.
MjBizDaily has noted the following as well as the results of the coronavirus on the cannabis industry. “Shortages of hardware manufactured in China such as marijuana product packaging. That includes specialty equipment for testing labs, extraction facilities and other businesses. Shortfalls of raw Chinese hemp material being exported to the U.S. and elsewhere. Financial ripple effects from the downturn in stock markets, further scaring off investors from cannabis.”
The lack of available cartridges will mean that some will be switching to another method which may include buying flower. With an increase in demand there, it may drive prices up to compensate for demand and vape losses. It’s not a guarantee, but it’s a possibility depending on how long this plays out.
Regardless of the end result, this will be a lesson for the industry on where it sources its products. And how it sources them. What kind of relationship and planning need to happen between manufacturers and retailers. Those left standing will leave a footprint on the industry for possibly generations to come. Those that are not will be a valuable lesson in archives of history.