High just got higher: Trump tariffs to raise prices for US cannabis users

Mrinalika Roy

Thu, Apr 3, 2025, 10:34 AM 2 min read

By Mrinalika Roy

(Reuters) - Contemplating smoking your mode retired of the tariff gloom? Think again.

Sweeping tariffs imposed by U.S. President Donald Trump connected Wednesday are acceptable to summation prices of cannabis products successful the country, arsenic galore firms trust connected Asia for manufacturing. The latest levies volition stack up connected immoderate duties imposed earlier connected countries similar China, Canada, Mexico and the EU.

Items specified arsenic tins, vape hardware and specialized solid stay hard to root domestically, and companies stay mostly babelike connected Asia peculiarly China, analysts and executives said.

"Those relying connected exports from nations with tariffs, specified arsenic China, volition request to instrumentality a superior look astatine however they mightiness sorb the other costs oregon change partnerships," said Bryan Gerber, CEO of Hara Supply, the world's largest shaper of cones and combustibles.

Shares of cannabis firms specified arsenic Tilray Brands, Canopy Growth, Organigram and Terrascend were trading down betwixt 5% and 10% connected Thursday.

Most of these tariff costs volition beryllium passed to consumers. The higher costs volition apt thrust much consumers to the illicit market, further denting margins for ineligible cannabis firms.

"Most cannabis businesses don't person the borderline flexibility to sorb a 10%-15% increase," said Mike Forenza, managing spouse astatine AE Global, which makes packaging products for cannabis firms.

Higher costs person already deed demand.

"Manufacturers are passing these tariff outgo down the enactment and it volition yet interaction our customers. We are starting to spot a softening successful the marketplace and inbound bid rates starting to slow," said Brad Wasserstrom, president of Wasserstrom Co, a proviso concatenation steadfast moving with cannabis companies.

The ongoing North America commercialized spat could exacerbate problems. Things utilized to turn cannabis harvest including compost and peat are imported from Canada and tariffs volition marque them costlier.

"We enactment with a shaper who imports their solid from China, the wood is imported from Canada, and it's enactment unneurotic successful Mexico each earlier it's distributed successful U.S. How is that getting taxed?" said Wasserstrom.

"That's a situation for everyone and yet it volition travel down to the user level."

(Reporting by Mrinalika Roy successful Bengaluru; Editing by Sayantani Ghosh and Alan Barona)