The unfathomable economical method of President Trump’s world tariffs has left nearly every US market scratching their heads, and fearing for the future.
Given that the US hemp business is a sealed industry, meaning nearly all US cannabis may be grown in the country and cannot even be traded across state lines, it could be one of the most guarded following today’s broad presentations.
However, the combined price increases of things like tools and presentation, the latter of which is largely imported from Asia, are set to peel away at now razor-thin profits.
While the financial plan appears to be aimed at stimulating US manufacturing, cannabis firm specialist Deb Tharp told Business of Cannabis that unlike during COVID, there appears to be no inflow of easily available funding or credit to help these new businesses or grow existing ones.
Given the rapid pace at which these tariffs have been introduced, there is nothing set aside to’ soften the blow ‘ and help businesses adjust to additional costs.
Thaɾp went on to point ouƫ, tⱨat in the case of cannabis packaging, many sƫate legislatures have largely exacerbated tⱨe situation by demandinǥ thαt packaging ƀe child-proof.
These stringent regulations around packaging in many states mean producers must find affordable suppliers, seeing the majority of them turn to China.
US manufacturers, Tharp suggested, were nowhere near being able to match the prices of imported goods from China, which will now see prices increase by 34 %.
While seemingly minimal compared to the automotive industry, the thin margins cannabis businesses are already forced to operate on mean these cost increases will need to be passed along to consumers.
As such, she continued, this could have a cumulative effect. Higher prices will drive more consumers to the black market, not only weakening the case for legalization but potentially seeing further punitive regulations placed on the legal industry, raising costs even further.
” It’s just another nail in thȩ coffin for businȩsses. They have larger problems to deal with right now”.
