The landscape of the global trade market has shifted as tensions between superpower nations are rising and the cannabis sector has not been immune to supply chain related issues.

According to a report from an executive at a vape hardware company, accessing the necessary components for vaporizers have become more challenging. The executive attributed the issue to rolling power outages in China as well as shipping related problems.

In the near-term, these supply chain issues could result in higher prices for cannabis vaporizer cartridges. Another near-term threat is related to how China’s Lunar New Year (on February 1st) could intensify supply chain issues as workers take long holidays.

From the machines that fill vape cartridges with cannabis to the LED grow lights that are used at cultivation facilities, China’s supply chain is responsible for providing important technologies and products to the cannabis industry.

During the last year, the media has talked about chip shortages and how it has impacted a wide variety of industries. From electric vehicles (EVs) to cell phones, many industries rely on chips from China. Vape pens require chip from China and we believe the industry could be negatively impacted by a global shortage.

Based on statements from cannabis executives, supply chain issues are expected to impact the cannabis industry in the first half of 2022. From tin boxes to specialty packaging, the cannabis industry is being impacted by shipping delays and this is a trend that is expected to continue in 2022.

Many companies have tried to get ahead of the problem and are started to source key technologies and products from domestic inventory pools. We would not be surprised if we stared to see some of the higher costs passed on to consumers in 2022 and will monitor how consumers respond to this.

According to Cannabis Benchmarks, the volume-weighted average spot price for cannabis has fallen almost 20% on a year-over-year basis (for the week that ended on November 26th). The lower cost of cannabis could prevent price increases for consumers and we will monitor which companies and brands benefit more from the drop in cannabis prices.

We expect 2022 to be a banner year for the US cannabis industry and will monitor how the market continues to evolve. If you are interested in learning more about the US cannabis industry, please send an email to support@technical420.com with the subject “The US Cannabis Industry” to be added to our distribution list.

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.