How the Cannabis Industry is Being Affected by the Coronavirus

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 cannabis for recreational and medical purposes or otherwise.
Production Issues and Cancellations
Another issue is the lack of cannabis being distributed. And not only this, but stock markets are
plummeting, and the average investor likely won’t risk buying stocks in cannabis businesses.
Says, Craig from CannaLabs, “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, now it’s looking for a reliable option.”
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.
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 inSouth Africa might be able to reduce prices and fill
the gap that many are facing due to 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 Smarterthinking
At Smartethinking, 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 vendors 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.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top