As of this post, the World Health Organization has reported the COVID-19 outbreak in more than 200 countries, infecting over 2 million people around the globe. By this time, it’s clear that this virus is not only affecting public health, but it’s also wreaking havoc on markets worldwide.
The cannabis industry is no exception. While many cannabis companies are classified as essential businesses (and so they’re rising to the occasion while keeping staff safe), the pandemic has disrupted this rapidly evolving market and continues affecting the industry in numerous ways.
Access to Cash
One fallout from the pandemic outbreak will be the increased and accelerated business failures and/or acquisitions. Overly optimistic expectations and unmet earnings projections led cannabis stocks to begin falling swiftly last year. Then the retreat of investors created financial strain for some cannabis companies leading to a failure in their expansion plans.
Suddenly, with the supply chain disrupted and other concerns due to debt and unpaid bills, the pandemic strikes and some cannabis companies are left in a whirlwind of unknowns. These are companies that don’t qualify for federal assistance given their federal legal status.
So cannabis companies are being turned away from traditional banking services and business loans, leaving operators to consider their options, including closing or even selling the business. For other cannabis operators, a lack of savings prevents them from stocking up on raw materials to get them through the pandemic’s disruption.
Supply Chain Disorder
When companies don’t have cash, they’re not purchasing. This creates supply chain issues alone, but from another perspective, the cannabis industry depends on China for vaporizer production. China, the low-cost producer of vape and related products, has indicated uncertainty about meeting its production commitments amid their own pandemic concerns.
Other supply chain disruptions come from a temporary influx in business. With the rise in cannabis deliveries in states where medicinal and adult-use marijuana is legal, the sudden increase in demand has some establishments struggling to keep up.
In most countries, sporting events and large gatherings have been canceled to mitigate the spread of COVID-19, and as a result, marijuana trade shows in the U.S., Canada, and Europe planned for the upcoming months have been canceled or postponed.
Trade shows are a prime time to build networks and collaboration, so this affects cannabis more than it would affect other industries. The shows are an invaluable resource for cannabis professionals to network and remain up-to-date on the ever-changing legislation and other occurrences in the cannabis industry. These events also offer budding professionals the opportunity to meet industry insiders and learn about cannabis law as well as creating a stage for cannabis startups to present new and innovative products to the world.
Stalled Legalization and Reform Efforts
As the marijuana industry continues to push for widespread legalization, the pandemic has put the effort on the shelf as state and federal lawmakers deal with more pressing economic and public health issues.
While industry advocates agree that legalization has been delayed during the pandemic, many feel it’s the pandemic that will foster a positive long term impact. With cannabis now considered as an essential business for the treatment of many ailments, the outlook is good.
The Right Resources
If you are a cannabis operator, many of the issues facing your company are made worse without the right tools in place, including the technology needed to run your supply chains more effectively and proactively. When an unexpected event forces you to make last-minute choices, these solutions keep you prepared for making informed decisions on how to proceed in a given circumstance.
As risk evolves and strategies change in light of a significant setback like the coronavirus, your technology’s adaptable features move right along with you – always there, always accessible in these trying times.
c2b teknologies has the right tools and technologies that help cannabis companies prepare for and manage unexpected disruptions. We offer the kind of partnership that these companies need to navigate through uncertainties and at any point in their business’s lifecycle.
Contact one of our cannabis technology experts to learn how your company can be more adaptable with the right cannabis technology.