The unprecedented increases in tariffs between the U.S. and, well, everyone, is already beginning to result in higher prices on a wide range of goods. Since no one is (legally) importing cannabis, that means those who consume it will be spared, right?
For the domestically produced, regulated cannabis itself, expect to keep paying the same sales tax at your local dispensary (although some states are proposing an increase in those taxes as well.) But for the supply chain of virtually everything else — from growing, processing, packaging, and much of the gear used to consume cannabis in flower and vape form is going to take a hit.
The cannabis industry is like virtually every other industry in the United States, insofar as it depends upon and imports a great deal of the products and materials it needs to operate. While there is thankfully a number of sun growers, many still grow indoors, which requires a great deal more equipment. Most of those products come from China, which is expected to start being charged a whopping 145% tariffs on imports. (For the non-mathletes — goods costing $100 will now cost $245.)
Those cost increases can be mitigated fully or in part both by the China-based producers and the U.S. buyer, either who could absorb a portion or all of the tariffs. But as the U.S. cannabis industry continues to operate with thin profit margins, due in large part to the 280e tax code, the safest bet is that most of the increase is going to be passed along to the consumer. Although Trump said recently that the tariffs with China will “come down substantially, but it won’t be zero,” so this may not end as painfully as it stands now.
Meanwhile, those who build facilities, HVAC systems, grow lights, and security systems, and depend upon imported Chinese steel, aluminum and other materials, are already seeing a rise in costs. MJBizDaily ran a two-part series on how the tariffs are impacting cannabis companies, and it’s a scary read.
It starts with growers, whose costs have increased 10% to 40% on some key components and materials. While the U.S. produces some world class strains, some growers still source European genetics for cultivating and/or breeding. Those tariffs will add 10-20% to the cost, although some importers say they will absorb the increases and spare the consumer.
Then comes packaging. The pre-roll doob tubes, pop top containers for flower, and jars for concentrates are mostly sourced overseas, and while there are some domestic packaging producers, “The technology required to produce the vast amount of packaging needed to support a productive and compliant industry simply does not exist in the United States,” said John Hartsell, co-founder of Phoenix-based product packaging and logistics provider Dizpot.
Custom Cones, based in Renton, Washington, brought their pre-roll plastic tube production back to the U.S., with production costs on par with what they were paying in China. Their cones and tubes are hand produced in India and Indonesia, but their “pre-roll machinery, glass tubes and packaging are made in China.”
The companies that make vaporizers and vape pens are arguably being hit the hardest. PAX, which MJBizDaily explains, is looking at a “150% cumulative tariff on pods, batteries and all-in-one devices manufactured in China. That’s because the Biden administration retained a 25% tariff on vape products made in China implemented in 2018 during Trump’s first term.” Even the Pax Plus and Mini will be hit with a 24% tariff placed on Malaysia, where they are produced.
Don’t forget the humble and ubiquitous vape pen, which relies on rechargeable lithium-ion batteries sourced from – that’s right – China.
Aside from home growers using an apple pipe and a magnifying glass on a sunny day, is there anyone who stands to win from the tariffs? Why, yes there is — the unregulated cannabis industry. The regulated cannabis industry will pass the new costs along to consumers, who will be seeing other cost increases from many other purchases. But your old hook up has goods which are likely already priced at or below what you pay at a dispensary.
For now, you might want to grab an extra pen battery or vape.
This article appears in Source Weekly May 1st, 2025.
MAKE LOCAL JOURNALISM HAPPEN
Republish our articles for free, online or in print, under a Creative Commons license.
You are ignorant (deliberately so?) of the true tariff situation. Most countries are working out trade deals with the U.S. The only one NOT seeking trade deals was China but they are changing their tune. Trump’s trade policies will be good for the U.S. and the world. Stop being so stubbornly obtuse.