Survey Results: Hemp Businesses Predict Revenue, Operating Capital Losses Due to COVID-19

Survey Results: Hemp Businesses Predict Revenue, Operating Capital Losses Due to COVID-19

More than 80 percent report anticipated losses from new economic pressures, according to a recent survey of Hemp Grower readers.

April 14, 2020

Business is not operating as usual for many companies working in the hemp industry, according to a recent survey of Hemp Grower readers.

About two-thirds (68%) of respondents said their business have been financially impacted by the coronavirus. When asked to predict revenue or operating capital losses due to the pandemic, 84% said they project losses, and nearly a third anticipated losses of more than 40%. 

However, the split was about 50/50 when asked “Is your business still continuing operations as normal,” with about 52% reporting “yes” and 48% responding “no.” 

“Farmers [are] holding back on their decision to grow this season due to last year’s oversupply and this year’s uncertainty,” one participant wrote in an open comment section.

More than half (52%) of businesses said they are based in states where they are deemed essential and allowed to remain open while other industries have been forced to shut down to prevent further spread of COVID-19. However, 28% reported that their companies are not considered "essential." 

Some hemp businesses reported changes to customer orders since the coronavirus, with more than one-third of respondents (39%) reporting delays with current orders. Future orders also have been impacted: Respondents noted order reductions (25%), delays (17%) or cancellations (17%.) About 23% have experienced no significant changes to their current or future orders.

Businesses indicated making several changes in their day-to-day operations because of the coronavirus, including allowing employees who are able to work remotely to do so (36%), scaling back hours of operation (31%), shutting down parts of the business (23%), temporarily decreasing staffing levels (23%) and laying off staff (12%). About a fifth of participants said they’ve made no changes to day-to-day operations (23%) or staffing (20%). In open comment sections, respondents’ answers varied, with some describing minor changes, such as more cleaning and social distancing measures, while others reported having to shut down their businesses entirely. 

In response to the coronavirus pandemic, some hemp industry businesses have expanded paid sick leave policies to employees (19%), while other businesses who did not offer paid sick leave before are now doing so due to COVID-19 (11%). About 24% already offered paid sick leave and made no changes, while 47% do not offer paid sick leave and have not changed policies. 

In an open comment section asking for specific accounts of how their hemp businesses have been affected, respondents reported supply chain challenges, wholesale order declines and essential staff not reporting to work from fear of contracting the virus, among others. 

As stay-at-home orders and other measures to protect people during the pandemic continue to change, one respondent summed up the unpredictable nature of the coronavirus pandemic and its longer-term impact on their business: “It’s too early to make a calculated decision.”

Most of the survey participants are hemp growers (60%), but other respondents include processors (17%), cannabis cultivators (growing state-legal plants with more than 0.3% THC content, 9%) and breeders (7%). (Participants could select all that apply.) 

Editor’s Note: Hemp Grower is continuing to report on how the coronavirus is impacting the hemp industry. If you would like to share your story, please reach out to Noelle Skodzinski, editorial director, at Hemp Grower surveyed readers March 26 - April 9, 2020, using third-party website Survey Monkey. Findings are based on 75 respondents who participated in the survey. Some charts may not add up to 100% due to rounding and respondents being able to select "all that apply."