Coronavirus Outbreak Hits the Cannabis Industry

Industry News - Corona Virus

The coronavirus, which has killed 908 people in China and affected over 40,000 individuals, will also impact the cannabis industry at large — namely, due to the lack of hardware supply from China.

According to the CEO of Cloudious9, a California-based vaporizer producer, Richard Huang, the outbreak has already caused disruptions in the supply chain. Huang added that these issues will only get worse in the coming months seeing as how much the vape industry relies on Chinese imports. In fact, nearly all the hardware — including, vape cartridges, vaporizers, and batteries, are manufactured in China.

Other companies are also worried about the “discontinuity” in the supply chain, saying that delays in shipments put companies at risk.

It isn’t just cannabis vape companies that will experience a shortage of supply. Other players on the market also import hardware from China, such as extraction equipment and packaging, LED lighting, and cultivation structures. So far, cannabis companies have been using up their existing inventory; however, shortages will soon be felt across the market.

There is a little bit of good news for the cannabis industry, though. This could be a chance for vape companies to sell their inventory oversupply caused by the recent US vaping crisis.

Meanwhile, the pressure is rising for Chinese factories to re-open. Although tech companies and the automotive industry have been hit the hardest by the virus outbreak, the work stoppage has affected the entire manufacturing process, as well as all industries supplied by China. Most of the factories are still closed shut, and it is uncertain how many workers will return once the factories do re-open.

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