The coronavirus outbreak is continuing to spread throughout China, infecting over 42,000 people and causing at least 1,000 deaths since last December. To prevent the spread of the virus, at least 24 different regions of China forced businesses and factories to shut down for several weeks. In turn, this temporary work stoppage has drastically choked the supply chain of tech products that many American businesses depend on.
The vape industry is among those likely impacted by the shortage of Chinese-made products. Largely a hardware business, most US vape producers have their vaporizers made in China. Practically every element of a vaporizer, including batteries, plastic or other raw materials, electroplating or other exterior finishes, and empty vape carts, come from a Chinese factory. In most cases, the only American-made product that goes into a vape is the cannabis oil itself.
“The coronavirus has had a significant impact on the entire manufacturing supply chain in China, which will be felt in the coming months,” said Richard Huang, CEO of California licensed vape producer Cloudious9, to Marijuana Business Daily. “It could be a very difficult year for hardware companies trying to maintain a steady supply of inventory.”
Arnaud Dumas de Rauly, CEO of New York vape company The Blinc Group, explained that “if several key raw material suppliers suddenly close down or are several months late in their shipments, it will constitute a threat to our timely fulfillment capabilities.” De Rauly also noted that travel restrictions imposed by the Chinese government are preventing some of his team members from visiting the factories where these products are made, causing further delays.
The supply chain restrictions created by this outbreak are likely to impact both legal and black market vape producers. Licensed vape manufacturers in the US and Canada source Chinese products that comply with government regulations mandating safety requirements and contaminant testing. Illegal producers, on the other hand, are free to buy cheaper, untested products to use in their black market weed vapes.
A slowdown in the production of these cheaper products could be good news. In addition to producing legal vapes, many Chinese companies also produce knock-offs of legal products, and some of these illicit vapes have been found to contain pesticides, heavy metals, or other contaminants. Recent evidence also suggests that the outbreak of vaping-related lung illness (EVALI) in the US could be caused by contaminants found in these illegally-produced vapes.
The EVALI outbreak may actually soften the blow caused by the coronavirus outbreak, though. As concerns over vaping-related illness spread last fall, sales of legal weed vapes began to decline, and several states banned these products outright. Because of these factors, some North American legal weed retailers have an overstock of vaping products, which may hold them over until production resumes in China.
Coronavirus may also take a toll on other areas of the cannabis industry. Even cannabis farmers who grow their crops on American soil still use Chinese-made products, including greenhouse frames and grow lights. Cannabis packaging and extraction companies are also heavily dependent on Chinese-made technology.
