Due to coronavirus, what at first seemed like a problem for the cannabis industry - the shortage of products made in China - has finally become a business opportunity for other companies involved in the production of packaging that are based in countries such as India, Mexico, and even the United States.
With factories in China closed to prevent the spread of the pandemic, many marijuana companies that didn’t have packaging made in China in stock have been forced to turn to manufacturers in other places to avoid interrupting production or decreasing their profits and, thus, jeopardising many jobs.
An example is Grove Bags in Cleveland, which has experienced an increase in demand that is too great so it hasn’t been able to accept all orders, thus turning down many business opportunities. The company has been forced to intensify its work pace to satisfy packaging orders due to this shortage of products from China. Factory employees are working up to three shifts a day and seven days a week in order to satisfy this great demand. Even so, as they themselves confirm, they have been forced to reject many orders because they couldn’t cope with them despite working beyond their real capacity.
KushCo Holdings, a California-based producer of services and additional items for the cannabis and CBD industry, had already started looking for alternatives after President Trump imposed tariffs on Chinese products. As confirmed by its executive vice president, Arun Kurichety, this search has intensified with the current health crisis.
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In Seattle, for example, the agency Wich & Mortar (specialising in the design and production of packaging) has intensified its relations with Mexico and India; however, company CEO, Jared Mirsky, states that when activity in Chinese factories resumes, they’ll try to continue relying on them but without abandoning their new commercial dealings with other producers.
Some cannabis companies that had already anticipated such disruptions due to the pandemic stocked up on packaging produced in China, and now have a sufficient supply that is allowing them not to interrupt production or have to resort to other markets for the time being. But the smallest companies with the fewest assets have been most affected by interruptions in supply chains as they have been unable to have sufficient stock and cannot cope with a total halt in production.
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