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The surprising way coronavirus affects the marijuana industry

The surprising way coronavirus affects the marijuana industry

Canda, February 14, 2020 (420 INTEL)- Since its arrival in December, the coronavirus has infected more than 42,000 people and claimed more than 1,000 lives. Many travel plans and routes have been disrupted as well, with some cruise ships facing strict quarantines to diminish the coronavirus from spreading. To further prevent the disease outbreak, at least 24 Chinese provinces have shut down businesses and factories.

This move, while critical to world health, has had a substantial impact on global trade. That includes the cannabis industry, where marijuana vaporizer companies often rely on Chinese manufacturers to produce hardware. You might be surprised to learn that almost every component of vaporizers come from Chinese factories, with cannabis oil serving as the only American-made good in many vaping products.

“The coronavirus has had a significant impact on the entire manufacturing supply chain in China, which will be felt in the coming months,” Richard Huang, CEO of California vaporizer manufacturer Cloudious9, told Marijuana Business Daily.

“It could be a very difficult year for hardware companies trying to maintain a steady supply of inventory,” he added.

However, it’s not the first time such disruptions have occurred. President Donald Trump’s trade war with China caused similar tensions within the cannabis industry, as companies that didn’t touch the plant stared down major tariffs from importing supplies.

This breakdown in the supply chain could lead many vaporizer producers to scramble in order to fulfill orders. While enough product remains available to provide retailers, fast-selling products might soon become out of stock for the unforeseeable future. According to Arnaud Dumas de Rauly, co-founder and CEO of New York vaporizer manufacturer The Blinc Group, the biggest risk to the supply chain is “discontinuity.”

“If several key raw material suppliers suddenly close down or are several months late in their shipments, it will constitute a threat to our timely fulfillment capabilities,” Dumas de Rauly said.

Many in the cannabis industry have been unable to visit China’s Shenzhen area, which houses a significant number of hardware factories. This has caused complications in future plans and ensuring demands are met across cannabis markets in the United States. However, the American vaping-related lung illness could soften the blow. Sales of vaporizer products have dropped in the following months, and cannabis retailers have a back stock of goods to sell consumers as a result.

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