The cannabis industry is facing significant challenges as licensed operators and ancillary companies prepare for increased business costs due to President Donald Trump’s recent tariffs. These tariffs have created uncertainty in the market, leading to concerns about lost customers and negative reactions from vendors. Experts warn that these tariffs are contributing to rising inflation and fears of a recession in the United States.
The impact of these tariffs is expected to be felt across the entire cannabis supply chain, affecting everything from cultivation equipment to packaging and raw materials. This assessment comes from over a dozen executives and economic experts who spoke to MJBizDaily following Trump’s recent tariff announcement, which disrupted decades of U.S. foreign trade policy.
Many cannabis businesses are already experiencing the consequences of these tariffs, especially those affected by retaliatory actions from international suppliers. As a result, some companies are actively looking for domestic sources to mitigate rising costs. Retailers and brands are considering passing on these increased expenses to consumers, highlighting the already thin profit margins in the highly regulated and taxed marijuana market, which competes with a burgeoning illicit market.
Trump’s “reciprocal” tariff order particularly targets manufacturing hubs in Southeast Asia and the European Union, imposing higher rates that went into effect on April 5. Notably, China is facing a staggering 125% tariff following its failure to meet Trump’s deadline regarding its own retaliatory tariffs. The broader tariff plan includes a 10% tariff on products imported from approximately 90 countries, which caused a substantial sell-off on U.S. stock exchanges, erasing $6.6 trillion in value, according to The Wall Street Journal.
After a swift reversal by Trump, which included a 90-day pause on escalating tariffs—excluding those on China—the U.S. trading indexes began to recover. The AdvisorShares Pure US Cannabis ETF, which tracks American marijuana companies, was still trading near a 52-week low at $2.14.
Arnaud Dumas de Rauly, the founder of cannabis consultancy MayThe5th and chair of the industry trade group VapeSafer, emphasized that tariffs are now an urgent issue for the cannabis sector. He stated that they pose a direct threat to profitability and scalability, making the industry “dangerously exposed” to the risks of global supply chain disruptions that have become significantly more costly overnight.
