The outbreak of the coronavirus and its shockingly rapid spread around the globe has resulted in a public health emergency declaration by the Center for Disease Control and Prevention and on March 11, the virus was officially declared a pandemic by the World Health Organization. The effects of coronavirus on the cannabis industry have lead to diverse responses from cannabis companies depending on varying legalization policies, both medical and recreational consumer bases, and the relative youth of companies.
Cannabis Conferences
The United States has seen massive cancellations of major events and gatherings – and the cannabis industry has not been immune. Cannabis conferences, events, and networking opportunities have been cancelled, rescheduled, or delayed indefinitely.
The New England Cannabis Network (NECANN) has rescheduled its New England Cannabis Convention, and events in Chicago and Springfield have been postponed with new dates yet to be announced. Conferences like the NoCo Hemp Expo in Denver and the Oklahoma Cannabis Conference have also been rescheduled, with other major cannabis events scheduled in the near future likely to cancel or do the same.
Globally, the coronavirus has affected multiple airlines, cruise ships, and other methods of public transportation, as well as forced some countries to initiate restrictions on the size of social gatherings or close their territorial borders. The cannabis industry has seen cancellations and postponements worldwide, such as Spannabis in Barcelona, one of the world’s largest cannabis trade shows. Even popular cannabis coffee shops in the Netherlands have been completely shut down.
Cannabis Sales
While some Americans are making a run on their local grocery stores, others are stocking up on cannabis. Despite the virus, dispensaries in the United States are seeing an increase in sales and some are finding they are unable to keep up with the demand. Some dispensaries have halted recreational cannabis sales to ensure they have enough product for their medical-use purchasers. Others have transitioned to online orders only and have closed stores either due to coronavirus restrictions or out of fear of running out of cannabis. Home delivery sales have also seen a major increase, with more cannabis users opting to obtain their cannabis without having to leave their homes. Some areas have also reduced cannabis restrictions, allowing cannabis deliveries of higher quantities and increasing the supply of medical cannabis that patients can possess at any one time.
Cannabis Supply Production
The recent lockdowns in countries like Italy, Spain, and others around the world have demonstrated what could happen in the United States and other countries if the virus is not contained. These lockdowns can cause declines in economic growth, interrupt supply chains, and a result in a potential sudden standstill in production and distribution processes. Few industries have avoided the effects of the virus – and while grocery stores have been running out of hand sanitizer and toilet paper, some cannabis businesses have also been experiencing shortages of other products.
The global supply chain within the cannabis industry is experiencing shortages because of a high dependency on Chinese low-cost producers of supplies. The coronavirus has delayed or halted the production of Chinese-made supplies, such as vaporizers and packaging materials, as well as specific lab equipment required in cannabis processing and manufacturing. Cannabis businesses throughout the United States and other countries around the world are having to find quick alternatives to stay in operation.
With the implementation of social distancing and restrictions increasing, fear and anxiety may be spurring the rise in cannabis sales, online and offline, as a way to prepare for and overcome a potential extended period of closures and quarantines. While cannabis sales are up for now, it’s possible these increases may be temporary. Although there is a notable increase in cannabis demand during this period of decreased production, it is still too early to determine the long-term effects that the coronavirus will have on the cannabis industry.