How the Coronavirus might adversely impact the cannabis industry
The whole world is watching as the virus total rises, and while most of us are worried about getting sick, or stocking up on the basic essentials, investors and business owners are wondering what kind of fallout they should expect, if the Coronavirus spreads and continues to shut down production in rich countries like China. You might not realize how dependent most regions are on one another, but the shutdown in China alone has led to massive drops in the stock market, and it doesn’t look like the end is near.
What is Coronavirus?
The Coronavirus, officially named COVID-19, is a virus that is believed to have first surfaced in the epicenter of the largest number of infected individuals, Wuhan China. Though it does share a lineage with other common illnesses like the seasonal flu, there are few similarities between them beyond the way that they look under a microscope.
The Coronavirus, like the flu, impacts the respiratory system, and most minor cases go unreported, as those affected believe that they have a typical cold or flu, but if you look at the death rate and contagiousness of this disease, you will quickly see that the Coronavirus is much more transmissible, and comes paired with more dangerous symptoms. That is why so many people are worried about its spread, and why it’s shutting down cities everywhere.
How the coronavirus is already hurting the cannabis industry
Some places in the world are faring relatively well through this crisis, but others like China, which is at the epicenter of the coronavirus outbreak, have completely empty streets, curfews, and laws in place that are keeping people from working, socializing, and other regular day to day activities. That means that the streets are completely empty, and that very little movement is happening within the manufacturing industry.
Since China is the number one manufacturer and producer of materials and goods that are necessary to build high-quality cannabis grow lights, we already see a significant decline in the number of grow lights that are available for purchase. This seemingly small issue is enough to delay the plans of brand new licensed producers from both the US and Canada, but expansion isn’t really what consumers are worried about right now.
Unfortunately, the future of unestablished cannabis facilities is at risk, but the most terrifying prospect we are facing right now lies in a shortage of other, more in demand weed accessories. Things like vaporizers, grinders, and filtration tools, are almost all made using products that are sourced from China, and the stock at head shops everywhere is quickly dwindling as the countdown to the future drags on.
The near future
Right now, the virus total is steadily rising, but some of the richest countries that spend the most amount of money on cannabis-related accessories are hosting only a handful of positively identified cases. This sounds like excellent news, as double-digit numbers are hardly enough to make most people bat an eye, but pretty soon just about everybody is going to be impacted by the arrival of this new disease regardless of whether or not they get it.
If you take a moment to add up how many of your goods come from countries like China, then you will realize that everyone is about to pay for this enemy of public health, including those from the cannabis industry. If it continues, eventually raw materials such as metals and pre-made ones like computer components, electrical pieces, and more will be in short supply. Aside from the obvious devastation that would ensue from a lack of essential imported materials, stoners are expected to reduce the amount that they share with others around them.
As most cannabis enthusiasts know, smoking weed is very often a group activity, a moment of bonding as you share a relaxing experience that brings you closer together, but as the coronavirus spreads, there is bound to be a decrease in the use of the sharing is caring motto, which is expected to impact sales through dispensaries.
Last but not least is the financial factor, which is absolutely essential to the equation here. If people get sick and start taking time off of work, then their paychecks will reflect that, and since most of the world are stocking up on essential goods like generators, water, and canned edibles, very few are likely to prioritize a purchase like weed, especially if customers are too afraid to take the risk of going out in public.
Now at this point in time, this is merely speculation based on inquiries from world-leading news agencies and investors who are watching the situation closely as it unfolds, but ultimately it is the only result that makes sense. Most businesses in the middle of the current outbreak are having trouble staying afloat, and this trend is one that is likely to continue.
So, while you’re out to pick up some canned goods and toilet paper, don’t forget to grab that enticing vaporizer and accessories, because you just never know what the future might hold for the cannabis industry.