How Coronavirus Is Impacting Vape Production In China

By Green Market Report's Debra Borchardt, provided exclusively to Benzinga Cannabis.

Vape pens are still the second biggest cannabis category behind flower. In the U.S., sales rose from 21% of the market in 2018 to 23% of the market in 2019.

TILT Holdings Inc. TILT TLLTF vape subsidiary Jupiter Research said it was back online following Chinese New Year and minor delays associated with the novel coronavirus COVID-19. The virus caused many parts of the country to impose strict quarantines on its residents. This resulted in several factories having to shut down as employees stayed home.

“We are proud to report that manufacturing lines have been open since February 17, 2020, and can confirm our first post-Chinese New Year ocean and air shipments are en route,” stated Mark Scatterday, CEO of TILT and founder/CEO of Jupiter Research. “Each year, Jupiter strategically forecasts inventory positions for the Chinese New Year holiday and beyond, which aims to navigate our customers’ needs when production is halted for a variety of reasons. With the product on hand stateside, our sales team has been actively receiving orders and fulfilling customer requests, along with our in-house print operations increasing capacity for domestic fulfillment.”

The vape industry struggled throughout 2019 as the vape crisis caused numerous deaths and multiple hospitalizations. The FDA ultimately determined that it was illicit market vape products that had caused the crisis. These companies were adding in fillers like Vitamin E which had disastrous results. Consumers have now learned to only purchase products from reputable sources.

“The Coronavirus outbreak in China has caused production delays across all industries, including ours, which produce products in Shenzhen and other manufacturing hubs along the China coast. Jupiter’s customer’s orders are being produced and shipped, which shows progress our manufacturers and Asian operations team have made. Our inventory position paired with our in-house print production has enabled our ability to continue placing P.O.’s, fulfill both custom and stock orders, and navigate the future potential for unforeseen delays in manufacturing,” added Mr. Scatterday.

Photo by Tomohiro Ohsumi/Stringer/Getty Images

The pause in production in China may have been an unexpected pleasant surprise. According to Cowen analyst Vivien Azer, the industry was reporting high levels of oil inventory. Vape pens are still the second biggest cannabis category behind flower, and in the U.S. sales rose from 21% of the market in 2018 to 23% of the market in 2019 according to data provided by Headset and Cowen.

A TILT statement said that all of its raw materials undergo a UV sterilization process prior to entering the production floor. Medical grade ethanol, known as an antiseptic for its bactericidal and antifungal effects, is currently used to clean the assembled components at several stages of the manufacturing process.

“Our ongoing commitment at Jupiter is to employee and customer safety, and the highest level of manufacturing processes,” Mr. Scatterday said. “We are optimistic for the future, and we appreciate our customers’ continued confidence and support.”

Photo by RJ Johnson 420MediaCo/Getty Images.

Article and pictures provided by The Fresh Toast.

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