Many businesses, large and small, are being impacted by the fear and panic shopping associated with the coronavirus, COVID-19.
While the concern is real, and we need to do what we can to reduce the virus from spreading, what about the cannabis industry? How are these businesses holding up?
Manufacturing and Disposable Income Impact
The cannabis industry is starting to feel a blow to businesses as a result of the spread of COVID-19 and the subsequent closings and quarantining. Part of this might be due to owners and buyers not wanting to purchase hardware that’s made in China, but also because the rest of the economy is taking a dive.
A major way the cannabis industry will be affected is due to manufacturing plants in China and other countries shutting down for the foreseeable future. For instance, vaporizers, lab equipment, and product packaging materials will be in short supply until manufacturers are able to operate again.
In terms of the economic impact that COVID-19 is currently having, many people don’t have much disposable income as shoppers are buying and stocking up on necessities in the event they can’t get to stores later. This panic shopping eats away at income that could have otherwise been used to purchase marijuana for medical purposes or otherwise.
Production Issues and Cancellations
Another issue is the lack of hemp being exported to the United States from China. And not only this, but stock markets are plummeting, and the average investor likely won’t risk buying stocks in cannabis businesses.
Says, Nic Easley, CEO of Denver-based 3C Consulting, “It’s a huge wake-up call. It’s forcing companies to look at their supply chain. Where do my products come from? Do I have multiple options for vendors? Everyone was looking for the cheapest option, and that’s China.”
With little diversity when it comes to manufacturers, many in the cannabis industry are finding themselves waiting. Many events that would have featured cannabis businesses have been canceled or postponed, including the following:
- March 20-22 – Ultra Music Festival, Miami, FL
- March 20-22 – New England Cannabis Convention, Boston, MA
- March 25-28 – National Cannabis Unity Conference, Washington, DC
- March 30-31 – CannaTech, Tel Aviv, Israel
- April 1-3 – International Cannabis Business Conference, Berlin, Germany
- April 14-15 – AHPA Hemp-CBD Supplement Congress, Portland, OR
For many operations, it may feel more like a death from a thousand knives than one single blow, and this is hurting the industry on a global scale.
A Potential Silver Lining
On the bright side, some in the industry think there could be a silver lining to the COVID-19 outbreak. Local manufacturers right here in the United States might be able to reduce prices and fill the gap that many are facing due to China’s shut down. The hope is that this can make manufacturing far more local in the long term as well.
In fact, not everyone is concerned. The website Portland Mercury states that “Former pandemics such as the Swine Flu, SARS, and others didn’t have a measurable impact on the industry,” which suggests it’s more speculative if we’ll see a fallout with cannabis. So, for now, let’s remain calm and optimistic when it comes to this otherwise budding industry.
Weather the Storm with Cannabis Creative
At Cannabis Creative, we’ve boosted exposure for a diverse group of clients both locally and nationally. We can help cannabis-based businesses of all stripes – from cultivators to dispensaries to ancillary service providers – weather the storm of COVID-19 and reach a broader market.
As a reminder, it’s important to take care of your health and protect others with basic measures against the new coronavirus, such as washing your hands frequently, social distancing, avoiding touching your face, and practicing good hygiene