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‘Liberation day’, set to take place on April 02, has been pitched as the day the Trump administration will roll out sweeping and aggressive tariffs for all of the US’ trading partners.
This so-called ‘Super Bowl’ of trade policy is fast approaching, not only sending financial markets into a frenzy, but causing almost every domestic industry to investigate just how they’ll be impacted by the new regime.
While the administration appears to have conceded some of the most aggressive tariffs could be delayed or revised, this opaque and often contradictory stance has done little to quell the panic in the markets.
Cannabis is no exception, with speculation and analysis into the impact of potential tariffs on China, Mexico and Canada peaking as the date draws ever closer.
According to a recent report from the New York Times, tariffs on Chinese imports are already significantly impacting the operational costs of the state’s cannabis businesses.
Although state law mandates that cannabis sold in New York must be grown locally, key materials like packaging, farming infrastructure, and vape hardware are imported and are now subject to tariffs as high as 45%.
Vape manufacturers are set to be especially squeezed, with hardware prices rising by over 20%, pressuring businesses to absorb costs, raise prices, or lower the quality of goods. All of these option would push consumers towards the already thriving illicit market.
It’s not just New York, these pressures are being felt across the country. Some firms are understood to be shifting their manufacturing to markets like Malaysia or Indonesia, but these markets bring their own issues, like higher costs, longer lead times, and increases customs scrutiny.
This has raised concerns that another vaping scandal such as the 2019 EVALI case, which killed 68 people, could erupt as businesses are forced to cut costs.
Meanwhile, north of the border, Stratcann reports that the Canadian cannabis industry is already being impacted by the indirect consequences of tariffs.
Canadian producers like SNDL are experiencing significant cost increases on essential packaging materials such as mylar bags and aluminium cans, largely sourced from the US or impacted by global supply disruptions.
While larger firms like High Tide report minimal exposure due to localized supply chains, others acknowledge rising input costs tied more to currency exchange and demand shocks than direct tariffs.
“}]] ‘Liberation day’, set to take place on April 02, has been pitched as the day the Trump administration will roll out sweeping and aggressive tariffs for all of the US’ trading partners. Read More
