Americans are bracing for the economic impact of the Trump tariffs, which went into effect today. Imports from Canada and Mexico are now subject to a 25 percent tax, while Chinese imports now sit at 20 percent. The prices of everything from automobiles to electronics (and a lot more) could go up thanks to the policy. But how will the tariffs affect weed?
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The biggest concerns within the cannabis space with regard to tariffs center on the vape space. From 510 carts to all-in-one vaporizers, the majority of hardware on dispensary shelves comes from China. Some brands are looking to move production to other countries to help offset costs. Vape maker Ispire recently shifted its manufacturing to Malaysia, telling Green Market Report the decision is becoming “more and more valuable as every day goes on.”
While the vape business is just a small segment of the legal pot market, the broader industry could also be impacted by rising packaging costs. Everything from mylar bags to dab containers is made in China. Once again, brands could be forced to look elsewhere. This, in turn, could lead to delays in production and even more headaches for the cannabis industry.
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Pot growers are also at risk of rising supply bills. Cultivation requires large amounts of cannabis nutrients and fertilizers, all of which could be subject to the tariffs. A recent report predicts potassium (K) imports will be most impacted. Fortunately, nitrogen (N), one of the most critical cannabis nutrients, will likely be less of an issue. However, the price of LED lights and other growing supplies could definitely go up.
The booming hemp THC drink space could also feel the squeeze of Trump’s tariffs. Aluminum is one of the country’s top imports from Canada. With the vast majority of weed drinks on the market packaged in cans, the 25 percent tariff could mean even higher prices on the products across the country.
The Trump tariffs could have a massive ripple effect on the economy, tightening consumers’ wallets everywhere—including at the dispensary. Cannabis operators are already preparing for the impact of higher taxes, hoping they can find workarounds for a space already struggling to survive.
