COVID-19's Impact on the Hemp Industry and Beyond
The outbreak of Coronavirus 19, or COVID-19, had numerous severe consequences for citizens and businesses across the globe. The World Health Organization officially dubbed the virus a pandemic on March 11th, 2020, with numerous nations enforcing mandatory quarantines to keep their citizens safe. More than 2.6 million lives had been claimed by COVID-19 as of March 11th, 2020 - just one year after the pandemic began.
In the United States, the Center for Disease Control implemented the closures and restricted operations of numerous businesses throughout the nation, including cafes, bars, and restaurants. Schools were closed to mitigate the spread of the virus, with many opting to implement online learning systems in lieu of in-person attendance for the subsequent school year. Higher risk demographics like the elderly and immunocompromised experienced increased fatality rates from the persistent spread of the virus. Individuals throughout the United States self-quarantined, leading to mass shortages of crucial supplies like water bottles, soap and toilet paper in the weeks following the pandemic's onset.
Leading researchers worked fervently to fully grasp COVID-19, in search of ways to effectively prevent the virus and reduce its lethality once contracted. Meanwhile, a rising culture of fear and precaution took the United States by storm.
How Did COVID-19 Impact the Hemp Industry?
A wide range of industries faced serious financial losses, taking a significant toll on those who relied on their stability and general success. Coronavirus is expected to impact industries across the globe immensely - and the cannabis and hemp industries are no exception. Businesses throughout the United States are bracing for the virus’s impact and doing all that they can to keep themselves afloat.
The hemp and cannabis industries were both impacted by shortages of hardware manufactured in China. Affected hardware included the necessary components to make vaporizer products, marijuana product packaging materials, and specialized equipment for laboratory testing, extraction and more. Hemp material that’s routinely exported from China to the United States was reduced in availability, leading to local shortages which impacted the processes of research, development and production.
Beyond the direct causes of COVID’s impact, financial losses were felt universally by citizens around the world, with ripple effects of losses in profits, hours and even jobs felt by businesses and employees everywhere. These have also made investors and consumers unusually wary of new investments and purchases alike, contributing to a vicious financial cycle until the market regains stability.
What Factors Impacted Hemp Industry Changes?
Nic Easley was the CEO of Denver, Colorado-based 3C Consulting in March 2020. In an interview with the Hemp Industry Daily shortly after the pandemic began, Easley spoke to the initial COVID-19-related changes in the cannabis industry and what he expected going forward. “It’s a huge wake-up call,” explained Easley. “It’s forcing companies to look at their supply chain. ‘Where do my products come from? Do I have multiple options for vendors?’ Everyone was looking for the cheapest option forever, and that’s China...It’s going to hurt everyone, especially low-cost crappy vape companies, hardware companies, anyone who’s undercutting big brands, anyone who does their manufacturing (in China) – it’s going to hurt all of them.”
Still, Easley noted, smaller hemp companies with local manufacturing may thrive despite these changes. Those who were willing to reconsider their outsourced production methods (and with the capital to do so) without going under could remain a source of American manufacturing jobs, which could ultimately increase local opportunities within both industries. In his words, “The biggest thing I see is finally a break for U.S. CBD companies and hemp companies to do something when they don’t have massive competition. It’s also a moment for smaller companies that have lost their market share to China to step up, ramp up, and focus on relationships.”
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