Ispire Technology Inc., a US-based vape company, has announced its capability to manufacture a variety of cannabis hardware at its facility in Senai, Johor, Malaysia. The company highlighted that the recent rise in US tariffs on Chinese imports could impact its earnings, as a significant portion of its nicotine and cannabis vaping products are sourced from Shenzhen Yi Jia in China.
In its quarterly report filed with the US Securities and Exchange Commission on May 9, Ispire stated, “We are currently able to manufacture a wide range of cannabis hardware in Malaysia and import into the US at a comparatively low tariff rate compared to goods imported from China.” They pointed out that the current tariff differential gives them a competitive edge in the US cannabis hardware market. However, Ispire cautioned that there is no assurance that tariffs on Malaysian imports will remain low.
The company noted that while it currently benefits from lower tariffs, changes in trade policy could adversely affect its business operations. As of May 5, tariffs on most Chinese products entering the US stood at 145%, while Malaysian imports faced an initial 24% tariff. Recent trade negotiations have led to a reduction in tariffs on Chinese goods to 30%.
Ispire clarified that its operations do not involve direct handling of the cannabis plant, thus exempting it from certain regulatory and tax implications associated with cannabis sales in the US. The company produces hardware designed for cannabis vaping, which customers then fill with oils. This allows Ispire to avoid the complications tied to cannabis-related regulations.
The manufacturing facility in Malaysia is equipped with multiple production lines, with plans for a significant expansion. Phase Two of the Senai facility, set to begin production in Q3 2025, will increase capacity to 80 production lines and expand the facility to 86,000 square feet. Ispire estimates it will be able to produce up to 61 million devices or 107 million pods per month.
On June 2, the Malaysian Ministry of Health confirmed that Ispire received an interim nicotine manufacturing license, allowing the company to produce e-cigarettes in Johor. This license was issued by the Malaysian Investment Development Authority (MIDA). Ispire previously announced on May 22 that it holds Malaysia’s first federal nicotine manufacturing license, enabling it to manufacture nicotine products immediately.
Despite the positive developments in its nicotine product line, the Ministry’s announcement did not mention Ispire’s production of cannabis vaporizers, which began in February 2024. The opening of the new facility, certified for ISO and GMP standards, aims to facilitate market entry for businesses looking to expand their cannabis and nicotine product offerings.
Malaysia has strict drug laws, including the death penalty for drug trafficking under the Dangerous Drugs Act of 1952, which prohibits cannabis. The law allows the seizure of equipment associated with drug offenses, raising questions about the legality of manufacturing cannabis-related devices in the country. Ispire’s quarterly report acknowledged regulatory risks but did not specifically address the legal status of cannabis manufacturing in Malaysia.
CodeBlue has sought clarification from MIDA regarding Ispire’s manufacturing license and the legality of producing cannabis-related products in Malaysia for export. Questions posed to Ispire Technology regarding government approvals for cannabis production in their Senai facility have yet to receive a response, except for a confirmation from their PR agency.
With growing interest from customers looking to diversify their supply chains away from China, Ispire’s operations in Malaysia could position the company favorably in the cannabis hardware market, provided they can navigate the regulatory landscape effectively.
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