The pandemic has been the source of many challenges for various industries in 2021, and the cannabis industry is no exception. During the beginning of the pandemic, cannabis businesses were one of few industries that appeared to be thriving. Sales for the first and second quarters of 2020 skyrocketed because many people stocked up on cannabis products during the lockdowns.
Fast forward to 2021, and things are taking a turn due to supply chain shortages. Learn more about cannabis supply chain shortages and predictions for 2022.
Cannabis Supply Chain Challenges
In some areas, such as California, growers are experiencing a surplus of supply with limited demand throughout the cannabis supply chain. But cannabis supply chain challenges aren’t due to lack of product; they are caused by various other shortages and challenges.
Cannabis supply chain challenges include:
- Packaging supply shortages
- Labor shortages
- Transportation delays
- Port congestion
Cannabis 2022: Supply Chain Predictions
Cannabis growers may need to make some changes as the world economy continues to recover from the pandemic. The following predictions offer some insight as to what cannabis growers can expect going into 2022.
Cannabis suppliers will need to branch out to multiple supply sources for their materials. By using a multi-sourcing strategy, growers will be better positioned to find the materials they need for packaging and growing their products.
Many businesses will also need to move away from the volatile global supply chain and begin sourcing locally. However, local supplies will cost more as inflation continues to rise.
The demand for products will continue to drive inflation up. Cannabis businesses will need to adjust their prices and expenses to reflect current inflation trends. Investing in newer grow technology could lower overhead costs in the long term.
Supply businesses are finding it challenging to keep their operations running at full capacity due to labor shortages. During lockdown, many people sought out better working conditions and more people than ever decided to leave their current jobs and change careers.
In addition, many businesses are losing workers due to various vaccine mandates. The legality of the mandates will be litigated in courts in 2022 and potentially longer. As a result, companies will need to find new ways to incentivize their employees to prevent turnover and entice new workers to apply.
Currently, the labor shortages extend into the transportation industry. Supplies coming from overseas are backed up at the ports due to labor shortages. However, even if the ports manage to get their staffing back up to 100%, there’s still a trucker shortage.
However, the port and trucker workforce is steadily recovering and will continue to grow in 2022. As a result, businesses will see fewer problems getting supplies transported and shipping their products.
Bespoke Financial Can Help
Bespoke Financial offers cannabis businesses various financing options. With our revolving lines of credit, you will easily find multiple suppliers willing to work with your business. Also, our platform makes it easy for you to add suppliers and pay them directly. Contact us today for more information.