Seldom has the world seen a force that would cause a lockdown, meltdown, shut down and all the ‘downs’ you could ever think of. The effect of this has hit so bad and had a ripple effect on all ramifications of life. From a fall in oil prices to a halt of exporting and importing and most economic activities. In fact, oftentimes in developing countries, the question has been posed as to what will kill people faster. The virus or the economic crippling that comes with it? And as with all periods of economic standstill there often is a ripple effect that leads to a hike in prices, scarcity of commodity, and an increase in demand.
The cannabis industry is an industry that has been on the rise in terms of revenue, health impact, popularity, and growth as a whole. But with the current COVID-19, there have been so many questions in the mouth of patients and users alike. Would there be a hike in the prices? Would taxes be increased or reduced further? And most importantly, would there be an imminent shortage? Can dispensaries still manage orders? This and more we hope to answer with this article. Come along.
Impact On the Supply Chain
One thing is clear, and that is the fact that China is the world’s capital for manufacturing. Also, considering the fact that the virus emanated from China, the lockdown has evidently been on longer in China than in other parts of the world. Some tools needed in the proper packaging of some cannabis products are gotten from China. Products such as the vape pen and other vaping devices are gotten from China. Now, this obstruction would hamper the regular flow of some products but not cannabis itself.
In America precisely, when the lockdown was announced and people had to stock up, it was observed that cannabis was purchased on the same scale as which other household necessities were purchased. Evidently, providing a solid argument that cannabis is more than just an alternative but the main drug on so many bases for many. Especially for medical cannabis patients, they had to stock up possible amounts that would see them through a month. This increase in demand would tilt and affect the capability of dispensaries to meet up with the request.
In California, for example, most cannabis dispensaries couldn’t meet up with delivery orders and even had to reject some. When the virus became a global pandemic as announced by W.H.O in the middle of March Washington saw a 9% increase in sales and California saw a whopping 53%. This is also expected to continue throughout the period. Statistics from a recent survey carried out showed that 48% of cannabis users but extra in the month of March as there were fears the lockdown could be lengthy.
Scarcity Or Not?
Having seen that there is an obvious strain on the dispensaries to keep up with demand, it begs the ultimate question, will there be a cannabis shortage? From all indications, the answer is NO. This doesn’t translate that there will be a smooth running in terms of access to products as there would still be some hitches. But shortage, no. This is also largely due to the fact that most states in the U.S. have classified cannabis as essential. This effectively means that cultivation, processing, distribution, and all the key processes involved in getting cannabis to the end-user would not be tampered with.
Now, the main issue with supply and availability is the easy access to the drugs and the prolonged time that people have to wait till they get the product. This is largely due to the urgency and panic buying approach users are applying. Most dispensaries have had no issues with getting cannabis and so users have nothing to worry about really. You can get your products the same as before, just with a little more patience. Be it CBD oil, edibles, and your reflected strain. Talking about strains, there’s been no real change observed in demand for any specific strain. The sativa vs indica taxonomy is to help users get the best result from cannabis by tailoring their need to the best form of the plant, although it is seen as fairly outdated.
The best answer to this is that strains have chemical components whose properties can induce different effects across both strains but just in different amounts. And as a way of clarifying all doubts, there’s no foreseeable price hike and tax increase as the state governments have classified cannabis as an essential.