The outbreak of coronavirus in China has infected thousands, killed hundreds, and triggered travel bans. Industry is naturally going to suffer as a result, and some, such as cannabis vaporizer companies, may be affected more than others.
The Centers for Disease Control and Prevention (CDC) reports that the coronavirus outbreak, originating in Wuhan City, Hubei Province, continues to grow, affecting new countries. Over 700 people have died as of this writing, all but two in mainland China. More than 34,000 have fallen ill with the virus.
But this isn’t the first wave between China and the US to hit the vaporizer industry this year. The Trump Administration’s trade war with China has also been causing trouble for vape manufacturers.
Almost all cannabis vape cartridges, vaporizers, and batteries are made in China. This essentially makes the cannabis vape industry a hardware industry as well—one that will be disrupted should supply lines from China fail.
This issue already played out to some extent in 2019 with the tariffs in place. Other sectors in the cannabis industry are also likely to suffer, including growers who may soon be facing a shortage of extraction equipment, greenhouse structures, LED lighting, packaging, and anything made with electroplating or 304 stainless steel.
Why Coronavirus May Affect the Vaping Industry
Wuhan, China is known for manufacturing and exporting billions in equipment and components for electronics, industrial equipment, and supplies. The coronavirus has impacted the entire manufacturing supply chain throughout the country, but some industries have more alternatives. With few or no domestic alternatives, vaporizer companies will just have to wait for the outbreak to end before their supply chains recover.
Timing is making the problem worse. Next week is the earliest Chinese businesses in Wuhan will resume operations, but at the time of the outbreak it was the Lunar New Year celebration—meaning many manufacturers were already closed.
Thanks (or no thanks) to the EVALI situation here in the US, some dispensaries have been left with more vaping products on the shelves than they’d like in recent months. This oversupply may help the inventory problem caused by coronavirus somewhat. However, as prices rise for the same vaping products, US consumers may be even less likely to “take a chance” on vaping.
In the meantime, cannabis business costs are likely to rise. This may be difficult to parse out since it’s already been a tough year or so, but on the heels of the tariffs this isn’t a stretch.
As usual, businesses will have no alternative but to pass those costs on to consumers. Still—compared to being quarantined without adequate medical care and possibly dying, paying a little more for your vape is basically nothing.