With the current negotiations for the US China trade deal headed in a direction that will probably be unfavorable to US farmers, a new disruption in the industry delivers hope. With the coronavirus outbreak, Chinese exports are on hold, and that decision is rippling through the Global Hemp marketplace. Instead of a flood of cheap CBD coming from Chinese farmers, there is now a gap in demand.
US farmers pounced on the production of hemp and hemp products this year, only to be met with a lukewarm reception. The realization that the infrastructure isn’t there to process the hemp has been a huge bottleneck for producers. That, coupled with inexperienced farmers, left many operations at a loss this year or with acres of hemp unsold.
The gap in supply from the recent outbreak could be their ticket back into profitability.
This same opportunity will not be felt, however, by cannabis companies selling vaping hardware. Almost all key factories are shutdown as workers have been instructed to stay in their homes. Almost all vaping devices, batteries, and cartridges are involved with the Chinese supply chain in some way. Even manufacturers who make their own products in the US may face difficulties getting key raw materials to keep their production lines running.
“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,” Dumas de Rauly, co-founder of New York based vape hardware manufacturer The Blinc Group, told the press.
While this could be a problem for companies without large supplies of hardware stocked, it will also allow companies to overcome the pains felt after recent problems with vaping related illnesses.
“That said, we will most certainly face a few days of delay for materials like 304 Stainless Steel as well as outer-shell finishings like electroplating,” de Rauly said.