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Sasha Aksenov, Founder & CIO The Blinc Group, Inc.
Sasha is a Co-Founder and Chief Innovation Officer of The Blinc Group. A hands-on creative leader, a serial entrepreneur, a multiple award-winning brand strategist, and a design industry veteran with a successful 25+ year track record of launching and scaling multinational brands and products.
As the year draws to a close and the Lunar New Year approaches, the cannabis industry faces a pressing but often overlooked challenge—its reliance on Chinese manufacturing. From packaging and point-of-sale (POS) items to rolling papers, extraction equipment, and vaporization hardware, much of the industry’s essential supplies are imported.
However, when the industry’s largest ancillary products manufacturers virtually shut down during Lunar New Year celebrations, the ripple effects on the cannabis supply chain are significant. This annual disruption creates far-reaching consequences, making it crucial for businesses to understand its impact as they navigate an ever-evolving landscape.
What to Expect During Lunar New Year 2025
The Lunar New Year, which typically falls between January and February, brings unique supply chain hurdles for global industries, including cannabis. In 2025, the holiday runs from January 28 to February 4, but the true impact extends far beyond these dates.
Many workers take an additional 10 days off to travel long distances to reunite with family, leaving factories understaffed for longer. Compounding the issue, approximately 20-30% of the workforce doesn’t return after the holiday, creating a labor shortage that reduces production throughput and further delays operations due to the need to hire and train new staff. For businesses dependent on Chinese manufacturing, this means navigating slower production, delayed shipments, and backlogged orders.
For the cannabis industry, this disruption requires businesses to plan far in advance, especially in a volatile regulatory and business environment. For example, shipments of vape hardware can take up to 8 weeks to arrive. Cannabis operators are often forced to lock up significant working capital in inventory for 3 months or more, at a time. Factoring in Lunar New Year 2025 delays, this timeline can stretch to 4-5 months. This extended outlay of capital, tied up long before products hit the market, adds financial strain to companies already working to maintain liquidity in a fast-changing industry.
Here are some best practices to navigate this critical period effectively:
1. Plan Inventory Well in Advance
- Start Early: Place orders at least 3 months ahead of the Lunar New Year 2025. This proactive approach accounts for manufacturing slowdowns before and after the holiday.
- Build Safety Stock: Establish a buffer by ordering additional inventory to cover potential delays. Aim to have enough stock to meet demand for up to 4-6 months, especially give proper consideration to 4/20 which comes hot on the heels of Lunar New Year and often presents an inventory challenge.
2. Optimize Cash Flow with Financing Solutions
- Inventory Financing: Consider financing options, such as Blinc’s Scale Now, Pay Later – an inventory financing program, that allows clients to pay for inventory over time. This minimizes the need for large upfront capital and helps keep cash flow healthy while maintaining necessary stock.
- Negotiate Payment Terms: Work with suppliers to extend payment terms or split payments over an extended period. This strategy will reduce the immediate financial burden of stocking up before the holiday disruption.
- Monitor Cash Flow Closely: Use financial forecasting tools to understand how much inventory you need and ensure sufficient liquidity to meet expenses during extended lead times.
3. Refine Demand Forecasting
- Analyze Sales Data: Review historical sales data to accurately forecast demand during the Lunar New Year period. Understanding trends will help avoid overstocking or underordering.
- Adjust for Seasonality: Consider whether sales peak or drop during this time of year and adjust orders accordingly to minimize unnecessary inventory costs.
4. Automate Inventory Management
- Use Vendor-Managed Inventory (VMI): Programs like Blinc Group’s “On-Demand” offer vendor-managed inventory systems that help automate stock levels based on real-time sales data. This reduces the need for manual tracking and ensures the right amount of inventory is available without over-ordering.
- Implement Inventory Software: Utilize inventory management software that integrates with sales platforms to track stock levels and generate alerts for reorder points, preventing last-minute panic.
5. Create a Contingency Plan
- Prepare for Delays: Factor in possible delays of up to 8-10 weeks and create contingency plans for essential product shortages.
- Communicate with Stakeholders: Keep your team, customers, and partners informed about potential delays. Transparency will help manage expectations and maintain trust, especially if disruptions affect product availability.
6. Maximize Operational Efficiency
- Prioritize High-Demand Products: Focus on stocking high-demand or high-margin products first to ensure that your most profitable items are available during potential supply chain gaps.
- Streamline Production: Optimize internal processes before the Lunar New Year and ahead of 4/20, so that when inventory arrives, it can be rapidly converted into finished products and sent to market.
7. Collaborate with Logistics Providers
- Ensure Freight Availability: Work closely with logistics partners to secure freight space well in advance of the holiday rush. Shipping and logistics companies often experience higher demand and price increases leading up to the Lunar New Year, so securing transportation early is essential.
While some suppliers hold inventory stateside to offset challenges from Lunar New Year in 2025, this often comes with the downside of unbranded, limited stock. Blinc Group’s “Blinc On-Demand” program, however, offers a more viable strategic solution. By utilizing a vendor-managed inventory system, your supplier provides a steady, branded supply of vape hardware based on long-term volume projections.
This allows cannabis operators to access branded or custom inventory held stateside as needed, reducing upfront capital outlays and automatically adjusting stock levels based on real demand signals. This offers flexibility to meet market demands without tying up excessive funds.
Moreover, as the cannabis industry matures, cash flow and working capital remain a critical challenge, given the limited access to traditional banking and financing. Recognizing this, Blinc Group has once again created a business solution and introduced extended payment terms tailored specifically to extend working capital for clients. Financing solutions like this are especially crucial for operators facing the unique cash flow challenges of the cannabis industry, providing much-needed liquidity and enabling sustained growth.
Proactive planning and financial foresight are vital to navigating the supply chain challenges posed by the Lunar New Year 2025 season. By implementing these best practices—such as leveraging inventory financing, refining demand forecasting, and building in contingencies—cannabis operators can minimize disruptions and maintain smooth operations. In an industry where cash flow is a persistent challenge, staying flexible and prepared is key to turning potential obstacles into opportunities for growth. As the market continues to evolve, leveraging strategic tools and practices will be essential for long-term success in the cannabis landscape.
