Supply Chain Issues Increase Demand for Used Cannabis EquipmentBecause of the equipment crunch, used equipment values are skyrocketing as producers seek solutions to the supply chain nightmare.
The bottlenecks hitting the global supply chain are unprecedented. Container ships are stacking up at their destinations. Manufactured goods are stagnating at the point of origin, waiting on empty containers and ship space. Not to mention the skyrocketing demand for raw materials required to produce new goods.
Used cannabis equipment is suddenly becoming a much more attractive option for new facilities and companies seeking to expand. So while consumer demand for cannabis and extractions hasn't faltered, the ability to keep up with this demand has.
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The Many Challenges of Sourcing New Equipment in 2021
It's tough going for new and expanding facilities in the cannabis sector, as it is everywhere else. Throughout the entire cannabis network, companies are struggling to get the equipment they need to cultivate, process, extract, and package their goods.
Brands seeking extractors, trimmers, and other pieces of equipment from Chinese manufacturers find that their orders are languishing in overseas warehouses, waiting for cargo space. Or, suddenly, the cost savings associated with buying Chinese-made goods have evaporated as the freight costs have risen to $20,000 per 40-ft container.
With these challenges piled on top of everything else that’s been unraveling in the global supply chain this year, used equipment sales are one of the only viable options for brands looking to build and expand.
The Benefits of Shopping for Used Equipment
First and foremost, the benefit of used extractors, trimmers, solvent recyclers, and other equipment is the availability. With much of the current extraction and processing equipment manufactured in China, alternative state-side equipment offers immediate returns.
There are already several online marketplaces for commercial grade equipment, including Cannabis Tech’s NEW Marketplace. Our online e-commerce site is designed for B2B sales, encompassing every piece of equipment needed to cultivate, process, extract and package cannabis and its derivatives - including both new and used equipment.
An added benefit of shopping used is the price point. While large scale, deep-pocketed companies may be dedicated to the latest and greatest cannabis technologies, small- to medium-scale companies can save significant CapEx by exploring what's available on the used marketplace.
Another often overlooked benefit of shopping for processing and cultivation equipment on the used market is the simple fact that it's likely been tried and tested across the sector. Someone else will have played guinea pig, and much more real-life information on its function and quirks will be available for review before purchase.
While extensive research will always be required before investing a quarter of a million on a CBD/hemp dryer, this type of research can be much simpler with used equipment. Others will have practiced, perfected, and troubleshot for you. That means real intel is available, rather than sales sheets and company promises.
Expect Higher Prices for Used Equipment
Although used cannabis dryers, extractors, and decarboxylation will come at a fraction of the price of brand-new pieces of equipment, with the supply chain crisis being what it is, it should be no surprise to hear that even used prices are higher than usual.
So while the global pandemic has slowed down some industries, cannabis legalization is charging forward full steam ahead. In new markets, like New York and Maine, cannabis companies are still clamoring to carve out a foothold — which means new cultivation, processing spaces, and packaging facilities are being developed. All of which need new equipment.
While there isn't much information on the price increases for cannabis equipment over the last year, all other major used markets have experienced a dramatic price increase. For example, car prices have jumped upwards of 42 percent. This news doesn't bode well for other used marketplaces.
Shop Smart When Shopping Used
As the explosive growth of the cannabis sector faces ongoing delays thanks to the quagmire that is the global supply chain, many facilities are being forced to pivot. Used equipment is no longer the second or third best option. It's often the only one.
When shopping for anything on the used marketplace, an intelligent approach is still applicable for the used cannabis equipment space. Seeking out reputable used equipment dealers and looking for certified refurbished or warrantied equipment can help avoid the pitfalls of buying used.
Used cannabis equipment doesn't come without some risk, but it remains one of the few solutions available for producers looking to build or expand their facilities. At the very least, used equipment will allow production to get started without the unprecedented and debilitating delays caused by the supply chain chaos of 2021.