Chinese New Year and Its Effect on the Cannabis Industry
Each year, the manufacturing giant that is China goes on temporary leave for Chinese New Year, which sparks a massive national shutdown as factories shutter and workers return home for the holiday.
This upcoming Chinese New Year is set for Feb 5th, 2019, with the official public holiday from Feb 5th to Feb 19th, roughly 15 days in total. Although the holiday is not that long, the celebration can go on for much longer.
If you need any type of custom product or custom project that comes from China (like barrier bags, glass jars, or CCELL® vape products), YOU NEED TO ORDER BY NOVEMBER 15, 2018.
Here’s how it ripples into the cannabis industry and how your business can take advantage, rather than being negatively impacted.
Why you should be doing business in China
Abundant resources, quality raw materials, and low cost of labor offer an attractive manufacturing option for companies looking at mass production. No other country has comparable manufacturing power and scale potential.
China is also home to innovative cannabis-focused companies, like CCELL® who develop premium vape hardware & components.
CCELL are supported by over 348 vaporizing technology patents, ISO standards certificates, a dedicated R&D center and hundreds of on-site engineers, holding an irreplaceable position in the market. Kush Supply Co. is fortunate to be 1 of 4 official CCELL distributors.
The cannabis industry’s manufacturing hub shuts down
Undoubtedly, the biggest impact the Chinese New Year has is the near-complete halt of manufacturing throughout the entire country.
Reliant on Chinese goods and supplies, the cannabis industry is bound to take a hit in supply chain availability. Paired with rising tariffs imposed by the US-China trade conflict, the time to act is now.
We’ve been doing this since 2010, so although it can feel like an annual headache, with proper planning you can prevent disruption to your supply chain.
How to ensure your company is prepared and product arrives on time
The first step is to partner with your Kush Supply Co. representative to develop a plan of attack. This will ensure you have the right product at the right time to best service your customers.
China’s factory production stops for about 1 month during Chinese New Year (CNY). Closures will begin about 2 weeks before 5-Feb and factories will reopen about 2 weeks after but will be severely backlogged for at least several weeks. Purchase orders placed between now and Chinese New Year could be affected.
- Manufacturing: Most Chinese companies close one to two weeks prior to the actual date of CNY to allow for employee travel – which may result in the supplier being unavailable for 3 weeks.
- Delayed production: It’s common for factories not to know how many of their employees will return after CNY. This can cause further delays in production.
- Longer lead times: It can take up to four weeks, upon return from CNY, for the factories to be back at full capacity.
Production lead times (before shipment) on our best sellers:
- Barrier bags: 35 to 45 days
- Glass jars: 35 to 45 days
- CCELL®: 60 to 65 days
Chinese New Year timeline and cutoff dates:
Please note, all of the above times are BEFORE SHIPMENT!
Expect long waits, increased shipping rates, and logistics delays
Air shipments can take 5 to 7 business days and ocean freight can take 35 to 40 days (sometimes more).
As we head into the Holiday/Chinese New Year season air shipping cost is typically higher between now and the end of March. Rates can increase up to 3x and will peak a few weeks before Black Friday (November 23) & Cyber Monday (November 26), then again a few weeks before Chinese New Year!
Kush Supply Co. can help with your unique business needs
By letting you know ahead of time, there should be plenty of time to get your order in. If you need help forecasting inventory for the next few months, we’ll sit down with you and work out the numbers. We need your projection through March so the factories can start working on your order ASAP.
If you need any type of custom product or custom project, GET YOUR ORDER IN BY NOVEMBER 15.
After Nov 15th, you’re not going to get anything started until long after Chinese New Year has ended (and you’re out of inventory).
Don’t let Chinese New Year slow down your growth. Contact your sales rep or call us at 888.920.KUSH