Will the coronavirus impact the hemp industry?
As the novel coronavirus continues to threaten public health, the economy and various industries all over the world are trying to keep moving forward amidst the battle. The hemp industry is no exception.
The coronavirus, or COVID-19, originating in Wuhan, China has infected more than 83,000 people globally and claimed the lives of 2,867 per the latest update on Axios. The top countries harboring this infection aside from China include Italy, Iran, and South Korea. Even the cruise ship Diamond Princess has allowed for 705 cases of the virus, thought to have been stemmed by a man on board the ship from Hong Kong.
The hub for coronavirus at the moment is obviously China, and unfortunately, many supplies that are used by growers and others within the cannabis industry come from China. Things like LED lights, the parts used to manufacture vaporizer devices, and greenhouse components are all examples of crucial supplies in the cannabis industry being threatened by the coronavirus.
What does this mean for the hemp industry?
According to Hemp Market Report, "delays in accessing these components could cause serious issues for businesses who rely on their ready availability to meet the demands of consumers in a competitive market."
The consensus is fairly consistent regarding the hemp sect that will be impacted the hardest, and that is the vaping industry. Nearly all vaporizers, cartridges, and batteries are manufactured in China and shipped to the United States. Richard Huang is the CEO or Cloudious9, a cannabis vaporizer manufacturer in California. He told Marijuana Business Daily, “The coronavirus has had a significant impact on the entire manufacturing supply chain in China, which will be felt in the coming months.”
Among all of the scary unknowns, there could be a silver lining for CBD and hemp companies outside of China. China is a major producer of CBD, both domestically and internationally. In fact, China was the number one producer of CBD in 2018. The country reported $1.3 billion USD in 2019 hemp sales, beating the United States. A stall in their hemp production could prove to be beneficial for American hemp producers.
The United States consumer population has a strong demand for hemp and CBD products. The pause in Chinese hemp production will allow American hemp farmers to meet more of the demand for hemp in the United States, instead of relying on imported hemp. According to Hemp Industry Daily, "in 2017, China sent about $3.3 million worth of hemp to the United States." Additionally, the economic and trade agreement requiring China to spend $12.9 billion more on agricultural imports from the US, including hemp, creates a new market for US farmers.
Many believe that the United States has the best growing practices and the most experienced farmers, and should be growing the majority of the world's hemp anyway.
Landon Butterfield is a crop consultant with Patriot Hemp Services based in Oregon. He told Hemp Industry Daily, that “...any kind of hiccup in that supply chain on [China’s] end allows American farmers to get into the international market, and it helps limit the flood of cheap Chinese CBD that is coming into America.”
As to be expected, some are at odds defining when exactly this "pandemic" will come to an end. Donald Trump believes it will all resolve in time, claiming it will have a "good ending." Sanders opposes his claim and calls it inadequate, misleading and dangerous.”
Regardless of the final outcome, at the moment the hemp industry is riding a roller coaster in terms of the coronavirus's impact on the industry as a whole. Some facets of the cannabis industry are heavily impacted, while others may be riding the presently advantageous wave.