Growing numbers of people infected with the coronavirus is having a material impact on supply chains around the world. Amidst the prepping and panic, what does that mean for the cannabis industry? Turns out, quite a bit. Today’s global supply chains are a complicated web of logistics, involving raw materials, manufacturing facilities, shipping and more. Disruptions in any one of these elements can mean low inventory of products in markets like in the U.S., which can result in higher costs to consumers due to scarcity. Worse, these disruptions can have lasting impacts as the outbreak continues to spread, even affecting logistical operations all the way to the dispensary door.
Consider that medical patients can’t wait for their medicine. It’s one thing to take a break if you’re a recreational cannabis user, but if you have a medical condition that is treatable through marijuana vaping, these disruptions in the supply could prove disastrous. If costs go up, that also puts a strain on these patients who may have to simply go without. That’s a situation we’ve seen with other medicines, from insulin to products like the epipen, a life-saving tool carried by people with severe allergies.
Here’s the deal: Almost every component but the contents of a vape pen happens to be manufactured in China. Tens of thousands have been sickened there, and since last year over 1,000 have died. This caused the Chinese government to reduce travel, and enact strict quarantines. The government also mandated many factories to temporarily cease or slow production. These manufacturing slowdowns have had a few practical outcomes. One is that it has visibly reduced pollution in some cities. The other outcome is that manufactured vapes have slowed production. The batteries for pens are made in China, the empty cartridges as well, and many of the raw materials are sourced in mainland China. So many of our goods in the U.S. are made there that a slowdown can quickly turn into a shortage at shops across the nation.
Strangely, there are some potentially good side effects. For one, many companies in China that produce legitimate cartridges also sneak out illegitimate ones as well. These “fakes” are often sold to black market manufacturers who fill them with who-knows-what. It’s a good thing if those stocks are falling. The other bit of good news is that China’s aggressive stance on the virus has seemingly slowed the spread, and numbers of those infected appear to be falling. With luck, warmer weather could help slow the spread, but scientists still don’t know if that’s the case.
There’s still the matter of producing cannabis in the U.S., and that means using products made in China as well. Grow lights, irrigation systems and even packaging are usually made in China. Could this also delay marijuana production stateside? It’s too early to tell, as these are more durable goods than the disposable vapes we see on the market. Still, if the virus were to persist for a year or more, we could see rising prices and constrained supplies. Another example of how interconnected our planet has become, and why threats like coronavirus may require global response teams in the future.
