Coronavirus: Weed Vape Industry, Stocks, and Events Take a Hit

“The coronavirus has had a significant impact on the entire manufacturing supply chain in China, which will be felt in the coming months"

People wearing a face masks to protecting themself because of epidemic in China. London, January 26, 2020. People wearing a face masks to protecting themself because of epidemic in China. Source: iStock

The impacts of the Coronavirus spread far and wide. The illness has led to travel bans, shortages of certain goods, and a tumbling stock market.

Though many industries are not affected by the spread of the virus itself, the fear of potentialities creates manufactured impacts. The vape industry, however, does seem to be taking a hit. About 90% of all vaping and e-cigarette devices sold across the world are produced in one city: Shenzhen, China.

The devices are designed and built in about 1,000 factories in that City, with the help of other companies aiding the supply chain across the Guangdong Province. Since much of China is on a standstill, isolated and quarantined, not allowed to work due to the government’s fears of the Coronavirus, that means those vaping products aren’t being manufactured. 

“The coronavirus has had a significant impact on the entire manufacturing supply chain in China, which will be felt in the coming months,” Richard Huang, CEO of Cloudious9 told Marijuana Business Daily.

This challenge follows a slump the vaping industry was already facing. The U.S. Centers for Disease Control and Prevention blames E acetate, a chemical used in many vape liquids, for a deadly respiratory illness.

After over 50 people died from the disease and thousands of others fell ill, President Donald Trump considered outlawing e-cigarettes altogether, but instead settled for a limited ban on fruity flavors of vape pods that kids found most appealing. Since, then, the market for vape products in the U.S. has gone down nearly 25%.

VICE News says large nicotine vaping manufacturers like JUUL labs should be fine, despite the halt at the company’s facilities in Shenzen. That’s only because the business is large enough to have the resources to outsource and avoid a production problem.

Smaller businesses could tank, though, if the factories and China aren’t up and running again soon. China had already nixed the sale of vaping products online.

The total effect so far is that prices of vaping products are likely to rise, and if you’re dead set on one particular brand, there’s a chance you’ll have to start branching out.

So far, the spread of Covid-19 seems to be slowing within China, but there aren’t estimates out yet on when manufacturing plants will be back to normal. If vaping companies have to open new facilities elsewhere, that will drastically raise prices as well.

How Coronavirus has affected stocks

The Coronavirus has been devastating for stock market stability, sending numbers on rollercoaster fluctuations from day to day. In the span of just one week, fears over the virus’s potential impact wiped out $6 trillion from the stock market.

Cannabis stocks are also feeling the affects, as Keith Speights of The Motley Fool reports Horizons Marijuana Life Sciences Index, which is made up of over 50 cannabis stocks, saw a 20% decline last week.

Speights says the overall market downturn and Chinese vape production issues are likely factors.

The S&P 500 had its worst week since 2008, during the financial crisis; and at one point the S&P 500 posted a light-speed correction, the 10% difference matched only by the Great Depression. The NASDAQ and Dow Jones were also down a 10% tier at one point, causing experts to fear a possible recession.

In April 2003, when SARS broke out, the Dow Jones was up 14.59% within six months, and after a year it was up 20.76%. The MERS outbreak in May 2013 saw similar trends – a 10.74% market rise after 6 months, and 17.96% change after 12 months.

Swine Flu may have been unhealthy for the world, but the markets were perfectly spritely that year, up 18.72% six months after the outbreak, and a whopping 35.96% a year later. 

Cannabis events canceled

Besides the financial impact of the virus, numerous cannabis events have been canceled in the wake of the outbreak.

One of the largest cannabis industry events, The New England Cannabis Conference, postponed its March 20-22 event, citing concerns about the spread of the coronavirus.


NoCo Hemp Expo, one of the largest hemp conferences, rescheduled their March 26-28 event to August 6-8.

“We’re also exploring options for a potential online digital conference in the upcoming weeks to continue the conversation about hemp,” NoCo Hemp Expo said in a statement on their website.

Coronavirus Explained

The disease spreading now is called Covid-19 but also referred to as the “novel Coronavirus.” It gets that name because the word “coronavirus” actually refers to a base disease with several variants. SARS and MERS are both forms of coronavirus.  

So far, each of those diseases has been significantly more deadly than the Novel Coronavirus. In 2003, the World Health Organization says 8,098 people were infected with Severe Acute Respiratory Syndrome, and 774 of them died. That’s a 10.5% mortality rate.  

Middle East Respiratory Syndrome, another form of Coronavirus, held a 34.4% global mortality rate, but also did not spread as rampant as other diseases. Since the outbreak in 2012, the World Health Organization says it’s been notified of 2,494 confirmed MERS cases across 27 countries. 858 of the people with confirmed cases died. 

Neither of those cases were particularly infectious, and did not spread as widely as many other diseases, requiring close person-to-person contact where other coronaviruses had a larger, airborne net. The Swine Flu pandemic, for instance, was massive, but less deadly.

It infected about 61 million people according to the CDC. The agency has no firm understanding of how deadly that disease was, saying, somewhere between 151,700 and 575,400 people worldwide died from H1N1 during the first year it began circulating. 

On publishing date for this article, Covid-19 had spread to around 110,000 people in 95 countries, and killed approximately 3,800 people worldwide. That’s a 2.8% mortality rate. These numbers are subject to change. 

To prevent the spread of Covid-19 and other viruses, the CDC recommends washing your hands thoroughly and frequently, staying home when sick, covering coughs and sneezes with the inside of your elbow, and cleaning surfaces you and others touch frequently.

For reference, the regular flu infects about 45 million people worldwide every single year, and claims tens of thousands of lives, despite a mortality rate of less than 1%. Between October 2019 and February 2020, there were about 50 million cases of regular flu.

 

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