The novel coronavirus outbreak in the United States will be likely to benefit Chinese hemp producers that compete with American suppliers on the domestic and global markets.
As of press time, there are a total of 1.76 million novel coronavirus cases in the United States, and the death toll has climbed to more than 100,000 nationwide, according to a tally from Johns Hopkins University.
This new health issue facing the Americans prompts many state governments to issue stay-at-home orders to stop the further spread of the novel coronavirus among citizens.
Long-term lockdown in the United States has resulted in massive layoffs and staff quarantine across the country.
Data from the Fortune show that the novel coronavirus crisis has put more than 22 million Americans out of work in just one month.
American cannabis product makers also failed to spare from this COVID-19 pandemic. To implement the stay-at-home orders, many of them have suspended production.
Unlike other products, cannabis products witnessed a surge in the last month, the CNBC quoted Steven DeAngelo, the so-called “father of the legal cannabis industry,” as saying.
“We had our largest sales day ever,” DeAngelo said. “Sales are up 20-25% at all locations.”
Although many American businesses have halted their business during state shutdown, pharmacies stay open. In eight of 11 states where marijuana adult-use is legal, cannabis products are an essential.
While some people use cannabis products for medicinal purpose, others use them for recreation. There is even a saying that cannabis products can cure the deadly COVID-19, despite warning from the FDA that there is no clear evidence to prove that.
As people’s demands for cannabis products flourish during the COVID-19 pandemic, many have started to stock up for fear of future supply shortage and rise in price.
Why We Say Novel Coronavirus is a Boon for Chinese Hemp Producers?
China is a major hemp producer, whose production accounts for more than 50% of that of the world.
Although the novel coronavirus was first detected in China, the country has basically halt the spread of the virus after 2- to 3-month of tough lockdown, and been struggling to resume their production.
The continuous lockdown and growing demands for cannabis products in the United States during the COVID-19 pandemic could provide an opportunity for some Chinese hemp producers to make inroad into the American market.
Compared with American cannabis products, Chinese cannabis products have advantage in price thanks to the country’s low human and processing costs.
“Since our company enters the hemp industry in 2013, cannabis products on the American market have seen a big drop in prices, down from $50,000 per kilogram in 2013 to mere $6,000 per kilogram in 2018,” said Tan Xin, the president and co-founder of the Hanma Investment Group Co., a Beijing-based hemp giant.
“We expect that the price of cannabis products will down to $1,000 per kilogram in the near future,” said Tan. “As long as our costs are within $300 per kilogram, Hanma can make profits.”
As the novel coronavirus continues to cripple much of the US’ manufacturing industry, China can expect success in competing with their rivals in the United States. That’s why we say the virus outbreak is a boon for Chinese hemp producers.