How will tariffs impact the cannabis industry? 📉

TARIFFS
How tariffs will impact the cannabis industry 🌿

Driving the news: As if the cannabis industry needed more headwinds, President Donald Trump imposed widespread tariffs on other countries sending markets into a tailspin. 

While cannabis in the US must be grown within the state it’s sold, cannabis supply chains rely heavily on China and other Asian countries — the grow lights, the packaging, rolling papers, and vape hardware, for starters. 

So what: Marc Hauser over at Cannabis Musings has an interesting perspective (and we’d encourage you to read his whole newsletter). 

Hauser writes that the uncertainty facing the general macro environment has shriveled up M&A and investment into US companies. That will be even more magnified in the cannabis industry as few firms will want to invest in high risk sectors, given that, well, everything is risky now. Read Cannabis Musings. 

What they’re saying: “Those relying on exports from nations with tariffs, such as China, will need to take a serious look at how they might absorb the extra costs or alter partnerships,” Hara Supply CEO Bryan Gerber told Reuters. 

Reuters writes that these costs will be passed on to consumers. 

On the flipside: TerrAscend CEO Jason Wild said on X that he doesn’t think the tariffs will have a “material impact” on his business. He added that about 93% of his supply chain is based in the US. 

“We’ve been working for months on alternatives to the minority of inputs we buy that are imported, but even if we still had to source them from current sources, the impact from the tariffs on our total COGS would be immaterial.” 

The final word: Most cannabis companies were already in a precarious financial state prior to Trump’s tariffs. Many of them will not have the flexibility to absorb another 10-15% increase in packaging and other supply chain costs, Reuters reports.

Unfortunately, we may start seeing more companies fail, and more people lose their jobs, if Trump doesn’t pull the US economy back from the brink.

-JB

“There’s not enough cannabis flower to supply all those international markets,” Organigram CEO Beena Goldenberg told The Toronto Star. “We can capitalize on the international markets that are opening up and the U.S. cannabis companies can’t, because it’s not federally legal.” 

Canadian cannabis firms like Organigram are taking advantage of coherent federal regulations to dominate cannabis export markets. It’s an opportunity that’s more difficult for their American peers, especially as more countries around the globe look to legalize.

Read the full story. 

Minnesota approves cannabis rules 📈

A Minnesota court approved the state’s proposed cannabis regulations, paving the way for the Office of Cannabis Management to begin awarding cultivation and dispensary licenses. The rules are set to go into effect next month. However, one cannabis consultant says they don’t expect dispensaries to open until next year, at the earliest. 

Ohio rejects plan to double cannabis taxes 🥊

Ohio lawmakers rejected Gov. Mike DeWine’s plan to double sales taxes on cannabis products in his proposed budget. DeWine’s plan would have pushed excise taxes from 10% to 20%.

Brazil decriminalizes personal cannabis possession 🌿

Brazil’s Supreme Court affirmed a ruling that decriminalizes up to 40 grams of cannabis possession for personal use. The use of cannabis in public remains subject to administrative penalties, while sale is subject to criminal penalties. Read more. 

Trade group urges lawmakers to regulate THC beverages like alcohol 👀

The American Beverage Licensees, a trade group of beer, wine, and spirit retailers, released a policy memo urging state lawmakers to regulate THC beverages — a product category exploding in popularity — like alcohol. Read more. 

New York investigates out-of-state companies 🤔

New York State regulators are investigating some of America’s biggest cannabis companies after receiving complaints that they have been selling marijuana to New York dispensaries that comes from unauthorized sources or is grown out of state, an illegal practice that has been called the industry’s open secret, The New York Times reports.

Cannabis accessories company Weedgets now has products available in Canada, including its Maze-X and X5 One-Hitter pipes.

Robert Vanisko has been promoted to Senior Vice President, Public Affairs at Ayr Wellness. 

Ryan Crandall has been promoted to Chief Commercial Officer at MariMed.

Big players enter hemp-derived THC drink market amid growing restrictions, bans | MJBizDaily

Dutch cannabis growers welcome expansion of state-run experiment to make sales legal | Associated Press

How weed drinks became the only winner of California's legal weed market | SF Gate

New Yorkers will benefit from higher quality weed and more places to buy from this year, experts say | TimeOut