In December of 2019, reports out of Hubei province in China sparked international concern about a new respiratory illness named Coronavirus. As the number of cases has increased rapidly and spread beyond the confines of mainland China, global impacts from the disease continue to grow. In addition to the cost of the disease in human lives and quarantines, the economic impacts have also been significant. Mainland China plays an outsized role in the supply chains of many different industries, including cannabis vaping and associated products.
A basic explanation of the supply chains used by cannabis companies sheds light on this problem. Modern vaporizers all tend to use similar components, whether they are manufactured for nicotine or cannabis-based vapor. Two of the most important of these are batteries, which provide power and simple computer chips, to control basic functions like temperature regulation, switching and power management. As is the case with personal computers, many of these components are sourced from Chinese companies at a fraction of the cost of their American competitors.
The worldwide spread of Coronavirus has highlighted one of the shortcomings with a worldwide economy. While companies may benefit from the ability to source parts from around the world, that efficiency demands reliable shipping. Manufacturing cannabis vaporizers at a consistent pace means that many companies rely on regular shipments of batteries and chips from China. Coronavirus has affected many of the factories in China that produce goods at the bottom of the supply chain, causing worldwide economic impacts. When thousands of people become sick and governments scramble to contain a disease, production is always going to slow down.
The supply chain of cannabis vaporizers goes beyond just batteries and chips. Vaporizers are typically housed in lightweight polymer cases, and use a variety of synthetic materials and electronics that are sourced from China. The more complicated it becomes to get the bottom end of the supply chain moving, the more we will see impacts on American companies.
The impact of Coronavirus comes not just from the huge number of people who have been infected, but also efforts to control the spread of the disease. The United States, for example, has imposed strict travel restrictions for mainland China, and instituted 14-day quarantine rules for any Americans returning. These rules mean that cannabis companies which routinely send employees to China for business are no longer able to do so, and that people returning are not able to work for two weeks even if they are not sick.
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