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The Global Cannabis Supply Chain And Coronavirus: What You Need To Know

April 24, 2020 12:54 pm
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By Amna Shamim

Coronavirus has threatened our just-in-time process for everything from hospital supplies to grocery store items. By now, your local grocery stores have probably run out of essential supplies like toilet paper and eggs. People all over the world are panicking about what they’ll be able to access and when and, as a result, are hoarding whatever they can. Crisis buying is exacerbating the issue and is happening because most people don’t understand what a supply chain is and how it works. 

What Is The Global Supply Chain?  

In simple terms, a supply chain is a process by which items are processed and distributed so that consumers can purchase and use them. 

A supply chain starts with core components (like eggs from a farm) and are shipped and processed until they take their final form in a store (like chocolate cake you buy for a birthday.) A supply chain can be simple or complex and can be local, national or international. A surprising number of supply chains are now global due to our very interconnected global economy. 

What Is The Global Cannabis Supply Chain?

It’s easier to visualize a supply chain than to read about it, especially the cannabis supply chain, so here is a video by Parsl, a global cannabis supply chain seed-to-sale tracking software that extends beyond the cash register.

How Has Coronavirus Impacted The Global Supply Chain?

Coronavirus has impacted the supply chain all over the world. Access to generic medicines will be impacted as India and China are refusing to export their supplies and/or shutting down factories due to the spread of Coronavirus. This has created disruptions in existing supply chains which operate on a “just in time” model.

Many farmers around the United States and the world are being negatively impacted by several factors: red tape, fewer skilled foreign workers and unskilled domestic workers, and, of course, disruptions in the import-export process. Fewer planes and ships may be moving products around the globe due to safety issues or even a shortage of healthy workers due to Coronavirus. This can and will impact many industries, including the cannabis industry.

In cities and even smaller towns, many people who are following quarantine or shelter in place orders are relying on delivery services to provide food and medicine. But as these workers get sick, this leg of the supply chain will also falter. 

See Also: 3 Key Ways Marketing And Communications Have Evolved In Cannabis

These issues are also impacting the global cannabis supply chain. Security tags are often manufactured in China. Fewer foreign skilled workers impact the ability to grow and harvest crops, as well as for manufacturers to run at full capacity. And as safety issues and a shortage of healthy workers impact distributors, you may see bare dispensary shelves.

Impact Of Insight Into The Supply Chain In This Time

One of the biggest issues in the global supply chain right now is a lack of consumer insight into what is happening at each step of the process. For example, the Great Toilet Paper Crisis of 2020 might have been averted if people everywhere knew that the warehouse up the road had 500,000 rolls of toilet paper coming next week and that no one needed to hoard.

The ability to see what products are in warehouses nearby, when others will be arriving at stores, and what things might look like if the supply chain is disrupted at any point would be useful to everyone and help keep people safe. Right now with Coronavirus raging, people are hoarding because of uncertainty, putting each other at risk if they’re venturing out to shop in stores and delivery drivers at risk if they’re staying home. With access to this information, consumers could feel safe without needing to hoard.

Impact Of Long-Term Insight Into The Supply Chain

In the long-term, insight into the global supply chain would help everyone. Consumers would never need to worry about access to products or the quality of the products. And insight should work in both directions. Consumers should be able to see into the supply chain and businesses should be able to see both up and down the supply chain.

This level of insights would benefit everyone from core component producers to stores. Core component producers like paper recycling plants could see the demand for toilet paper is increasing and shift from making paper towels or notebooks to toilet paper. Distributors could see that demand is increasing fastest in cities and route extra toilet paper to the right places. And stores could see that more toilet paper is coming and reassure their customers that while they’re limited toilet paper purchases to one pack per customer, another shipment of 5,000 packs is arriving in three days and customers will be allowed to buy more then.

Impact Of Insight Into The Cannabis Supply Chain

This level of insight would be incredibly helpful in the cannabis industry. The cannabis supply chain is relatively new and untested and the regulations are also untested. This results in the cannabis supply chain having to cope with every issue the normal supply chain has, as well as additional industry-specific ones. At the best of times, the cannabis supply chain is unpredictable and even more so right now during the Coronavirus pandemic.

Having a deep level of insight into the global cannabis supply chain would allow everyone from cultivators to dispensaries to see what is happening at every step of the process. Cultivators could determine which seeds to plant based on demand at dispensaries. Manufacturers could focus on the most popular products. Distributors could plan their routes most efficiently. Consumers could peer into the supply chain and know that everyone along the way making data-informed decisions to best serve their needs and wants. “If the cannabis industry understood its customers, it would be able to do a much better job of efficiently meeting their demand with minimal waste and maximal productivity,” according to Dr. Isaac Balbin, founder and CEO of Parsl. “If dispensaries understood the purchasing behaviors of their customers, they would be able to plan ahead and maximize revenue with the highest levels of customer satisfaction. There isn’t much better for their business than that!”

Noticias sobre cannabis en Español en El Planteo.

Right now, Coronavirus is impacting supply chains in nearly every industry on nearly every level. The cannabis industry has been classified as an essential service during the pandemic, alongside hospitals, grocery stores, and pharmacies. Demand for cannabis products has increased (perhaps as a coping mechanism for stress?) but the supply chain is too unpredictable to cope with this increased demand and has no way to understand if this behavior is due to people hoarding against future gaps in supply or a result of increased consumption in the moment. 

Managing Coronavirus and the inevitable supply chain disruptions is going to require sharing real-time information. Very few industries have this level of current and historic data accessible to everyone, much less to the consumer. Going forward, access to data is going to be important for every industry, especially the cannabis industry. “If the cannabis industry gets its act together and gathers data the right way, it can become a model for every other industry to aspire to in terms of supply chain transparency, security, and trust” said Dr. Balbin.

Lead image by Ilona Szentivanyi. Copyright: Benzinga.

Amna Shamim is a freelance writer and marketing consultant and works with Parsl Pty, Ltd. She travels the world, connecting the global cannabis industry dots. You can find her on Twitter and Instagram.

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.


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