The legal marijuana sector has long operated under a patchwork of rules and shifting policies. Now, a new round of trade measures under President Donald Trump is adding fresh strain to an already complex marketplace.
From vaporizer components to grow equipment and packaging materials, businesses say the latest tariffs are making it harder to forecast costs and manage supply chains. Some companies have shifted production away from countries facing steep import duties. Others are holding off on major changes, unsure what the next policy move will bring.
The White House has leaned on the 1977 IEEPA to raise import taxes. Although the Supreme Court recently invalidated tariffs announced in April last year, the administration responded with a new 10% global duty that took effect last week. Trump has indicated that the rate could climb to 15%.
The 10% levy sits on top of another 25% tariff imposed during Trump’s first term on marijuana-related products from China, including mylar packaging bags and vaporizer parts.
Industry executives say the layering of fees complicates forecasting as higher import costs are likely to ripple across product categories. Many operators already operate on thin margins and face stiff competition from the illegal market, limiting their ability to pass costs on to shoppers.
Pax Labs’ vice president, Laura Fogelman, notes that even when courts strike down a tariff, the broader instability carries its own cost. Pax previously shifted part of its production from China to Malaysia to reduce exposure to earlier duties and chose to absorb some added expenses rather than raise prices.
For Custom Cones USA, which produces pre-roll packaging, earlier tariff rounds drove per-container charges from $2,000 to as much as $20,000, according to co-founder Harrison Bard. He said recent notices from federal agencies and shipping companies suggest that the latest rules remain unclear.
In response to earlier trade measures, the company set up a third-party logistics hub in Canada and launched a dedicated Canadian website to serve licensed producers there. Bard said sales north of the border dipped after the April announcement, prompting the company to strengthen its local presence.
Not every business reports major disruption. Jason Ambrosino, who runs Veterans Choice, said Chinese factories have absorbed much of the extra cost so far, keeping pricing relatively stable. He believes the broader marijuana market has largely adjusted.
Others see ongoing turmoil. Calyx Containers co-founder Alex Gonzalez said frequent policy shifts have left supply chain teams scrambling. He added that companies are forced to make quick purchasing decisions without knowing whether rates will be 10%, 15%, or something else entirely.
Gonzalez noted that some operators are trimming product lines to focus on top sellers and building closer ties with U.S. suppliers to gain more predictable cash flow. With tariffs expected to remain central to the administration’s economic strategy, many in cannabis say they are preparing for continued volatility rather than a swift return to stability.
That expected volatility will test management teams at enterprises like TerrAscend Corp. (TSX: TSND) (OTCQX: TSNDF) and all marijuana firms within the U.S. as supply chains may need to be reconfigured and budgets adjusted.
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