As a full-on global war with the novel corona virus is being mounted by healthcare providers and the essential workforce to the global economy, many are asking: what will the future look like? For those in the hemp industry: how will COVID-19 impact the often high-risk high-reward of the global “green-rush”? The modern world has never seen a pandemic this large, and market indices and exponentially growing charts don`t tell the story of what will happen next to the young industry.
Switzerland was one of the first countries in Europe to be affected by COVID-19 as it shares its Southern border with the hard-hit regions of Northern Italy. Like the rest of the globe, constant vigilance and a strong sense of solidarity to not become a victim of the pandemic is moving the country forward.
Switzerland also has one of the most developed CBD hemp markets in the world where the CBD-boom came several years before that seen in the US. Our sister company Pure Production is the largest CBD producer in Switzerland and was a first mover in the Swiss-CBD scene. It has successfully expanded across the European market. “When the pandemic first hit hard in Switzerland we shared much of the anxiety that many business owners are currently facing”, says Stevens Senn, CEO Pure Holding including Pure Production and Puregene. After close to a month in the post-corona economy, cannabis appears to continue to be the industry of luck and good fortune. “From our points of sales in Switzerland, orders for all products are up nearly 100% in the last month”, says Senn. The increase in sales is currently driven by demand for smokable flower and new product launches of CBD and CBG over-the-counter medicinal products.
In the US, there are concerns due to the unknowns of COVID 19’s impact.
“We have seen the uncertainty push some producers to commit to orders and make sure their production plans are not at risk when planting season comes around”, says Zach Zboch, CEO US Nursery. US Nursery manages Puregene’s hemp genetics with a large network of propagators throughout the US.
The hemp industry has been less affected in Europe and the US by the global lock down, because it is an agricultural product and the agriculture industry has been designated essential by every governmental body. Even if a cloud of uncertainty looms over the current demand and decisions of producers to plant a hemp crop this year, in the long-term the end-product demand is the key driver for profitability.
“It’s simple supply and demand, if many farmers don’t plant hemp this year due to the pandemic, the ones that do will benefit in the long run”, says Yannik Schlup, CBO Puregene. “Last year poor genetics plagued the young industry, this year its uncertainty from corona virus and the CBD prices, but the industry is resilient, it will bounce back”. This year producers will benefit from better genetics from reputable hemp breeding companies, propagators and seed producers. The expansion of the hemp market into CBG and high value smokable flower production provides producers with more market options at harvest. “In the end, quality genetics are the key to success, in this regard the EU and US hemp markets are the same. We perceive strong demand for our seeds and clones and only see slight apprehension due to COVID 19”, says Schlup.
In Switzerland we have seen the extreme ups and downs of the rapidly-changing CBD industry. We invested a lot to make sure our varieties can be used for upcoming trends; those are the varieties that are proven the most profitable in the mature Swiss market. Extraction, flower, high value cannabinoids, being dynamic in this market is key.
Puregene has been working tirelessly to make sure the supply chain is in place for the 2020 grow season and orders are coming in and demand is high particularly for CBG and their total THC compliant CBD varieties. Overall this year is clearly different than last year – but that doesn’t necessarily have to be a bad thing.