Marijuana companies and related businesses are starting to feel the pressure from rising costs triggered by President Donald Trump’s unpredictable tariff policies. The trade actions, which disrupted long-standing global agreements, have raised fears of economic downturn and higher inflation in the U.S., affecting everything from basic supplies to more specialized equipment used throughout the cannabis industry.
Operators across the cannabis space, especially those relying on global supply chains, are facing higher prices on packaging, cultivation tools, raw materials, and product parts. Many companies are already being forced to reconsider where they source their materials, with some now seeking domestic options to sidestep the growing uncertainty overseas.
Some brands and retailers plan to raise their prices to offset these new expenses. They argue that profit margins were already slim due to heavy regulation and taxes, and the added burden from tariffs could tip the balance even more in favor of the unlicensed, underground market.
Trump’s “reciprocal” tariffs targeted countries like those in the EU and Southeast Asia, regions that supply vital gear such as payment systems and raw inputs for cannabis companies. Although he later paused most of these tariffs for 90 days, excluding China, the damage had already begun. China’s exports now face a 145% tariff due to a failed compromise with the U.S., further escalating the trade battle.
A blanket 10% tariff on goods from nearly 90 nations went into effect in early April, causing a sharp drop in U.S. stock markets. This steep decline erased trillions in value over just two days. Although stocks bounced back after the policy was softened, the cannabis sector’s main investment fund still hovered near record lows.
Industry leaders say the financial hit is real. Arnaud Dumas de Rauly, a marijuana consultant and trade group chair, said these new costs are a direct threat to the industry’s growth and profits. “We’re exposed to global supply shocks,” he warned, “and they’re getting more expensive, fast.”
Construction companies working with marijuana firms have seen aluminum, wiring, and security systems jump by as much as 40% in cost. Materials like steel framing and surveillance tools—often imported from Germany and China—are costing significantly more. Procurement is also shifting. Price quotes now expire in just days, and contractors are demanding more upfront money to lock in costs, putting extra strain on company budgets.
Vape brands are hit especially hard. Companies like Pax rely heavily on parts from China, including batteries and devices. Due to overlapping tariffs from both the Trump and Biden administrations, Pax now faces a staggering 150% combined import tax on many of its products. Even alternative manufacturing bases, like Malaysia, are no longer safe from rising trade barriers.
The industry is navigating a new reality: unpredictable tariffs, rising prices, and supply chain disruption. These challenges are forcing operators like Cresco Labs Inc. (CNX: CL) (OTCQX: CRLBF) to adapt quickly and rethink how they do business in an increasingly unstable global trade environment.
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