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Trump’s tariffs on Chinese products are predicted to affect the cannabis industry

Due to Trump’s tariffs on Chinese products, countless cannabis businesses are feeling the pressure to find new suppliers.

Bethan Rose Jenkins, Cannabis News Writer/Editorial

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The legal cannabis industry is probably going to endure the implications of President Donald Trump’s tariffs on Chinese products.

According to Co-CEO of The Blinc Group, Arnaud Dumas de Rauly, a wide range of cannabis consumption devices and parts will be subject to Trump’s tariffs, including vaporizer devices, batteries, cartridges, and filters.

Mr. Rauly’s ancillary cannabis company specializes in the creation of unique vaping technologies and products that can be utilized by cannabis consumers.

He operates a special incubator program, which is designed to aid the research and development of both cannabis and nicotine vaping. Additionally, Rauly helps develop brand technology for the vaping market.

CEO of cannabis company testified against Trump’s tariffs on Chinese products

In response to Trump’s tariffs on Chinese products, Mr. Rauly testified on behalf of The Office of the U.S. Trade Representative public hearings back on July 24.

He protested against the proposed tariffs, drawing attention to the fact that the tariffs will increase medical cannabis prices for patients, as well as for those who vape cannabis oils and dried flower for recreational enjoyment.

Trump’s bold move to inflate prices on all products made in China has put American manufacturers in a sticky situation. Now, they have no choice but to dedicate precious time to seeking out different suppliers.

According to the President of the New Jersey Marijuana Retailers Association, Juan Carlos Negrin, manufacturers may also have to “price themselves out of competition with other manufacturers.”

What impact will Trump’s tariffs have on the cannabis industry?

Due to Trump’s tariffs on Chinese products, countless cannabis businesses are feeling the pressure to find new suppliers.

According to Smoke Wallin (the president of cannabis production company Vertical,) the situation has created a sense of urgency in the hunt for vape pen manufacturers throughout America.

Since the cost of Chinese-made goods is significantly lower than the cost of U.S.-manufactured products, cannabis businesses will now be forced to fork out extra cash in order to produce their vaping products.

Mr. Rauly says that the repercussions of Trump’s tariffs extend far beyond consumer costs. Inflated prices will undoubtedly have a negative impact on sales, which means less tax revenue for states that have enacted cannabis laws.

The economy could potentially take a dive as a result. After all, weed-friendly states are raking in the money. A fine example is Colorado, which pulled in $247 M in Cannabis tax revenue last year.

Since “25% of sales come from cannabis vaping products,” based on Mr. Rauly’s claims, Trump’s tariffs could significantly dent America’s cannabis tax revenue.

“Any items essential to the day-to-day operations of a cannabis business, from construction equipment to cell phones, will likely increase in price,” aside from the components used to make vaporizers, says Mr. Rauly.

Cannabis companies in the U.S. are susceptible to suffer from Trump’s tariffs

Companies that deal specifically with the legal cannabis sector will need to adjust their input costs accordingly if they are going to continue to profit without the help of Chinese manufacturers.

Cannabis companies are not legally allowed to deduct business-related expenses from taxes. This means a smaller margin for profit.

It’s not just cannabis vaping companies who may suffer from Trump’s tariffs on products made in China, either.

Small-scale cannabis cultivators who source their packaging equipment from manufacturers in China may struggle to turn over profit, putting rural cultivation companies at risk of sales struggles, too. 

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Trump’s tariffs on Chinese products are predicted to affect the cannabis industry