Vicki
Herbal Alchemist
https://www.forbes.com/sites/juliew...fs-set-to-hit-cannabis-industry/#722e593a5816
It’s more than soybean farmers and car makers who could feel the effects of Donald Trump’s tariffs on Chinese products. The legal cannabis industry will take a hit as well.
Vaping devices, and batteries, filters and cartridges created for vaping devices are all subject to the new tariffs said Arnaud Dumas de Rauly, Co-CEO of The Blinc Group. His company develops and sells technologies and products related to vaping and other ancillary cannabis products, and runs an incubator program that helps develop, research, and brand technology related to cannabis and nicotine vaping.
On July 24th, Dumas de Rauly testified as part of The Office of the U.S. Trade Representative public hearings regarding the proposed tariffs, saying that they will raise prices for medical marijuana patients and other consumers who use vaporizers.
By increasing prices on Chinese-made products, Trump has essentially forced American manufacturers to take time out of running their businesses to find alternate suppliers, “or price themselves out of competition with other manufacturers," said Juan Carlos Negrin, President of the New Jersey Marijuana Retailers Association.
Smoke Wallin, president of Vertical, a multi-state cannabis growing and production company, said the tariffs have created a sense of urgency around finding new suppliers in America for vape pens, even though the Chinese manufacturers are much less expensive.
$247M in Cannabis tax revenue in 2017 and “25% of sales come from cannabis vaping products,” said Mr. Dumas de Rauly.
Beyond vaporizer components, "any items essential to the day-to-day operations of a cannabis business, from construction equipment to cell phones, will likely increase in price,” said Kevin Hagan, a strategic advisor who consults on cannabis policy issues at Princeton Public Affairs Group.
Cannabis companies are especially vulnerable to changes in their input costs said Negrin because they are not allowed to deduct business expenses from their taxes. That lowers their profit margins. “A tariff on goods the companies use in daily operations will have a substantially negative impact on their earnings,” he said.
Brooke Davies, executive director of Cannabis Organization of Retail Establishments, a non-profit trade association representing cannabis retailers in Washington State, said that she has already begun to see the effects of the tariffs. Small growers like Sweetwater Farms in Eastern Washington buy glass jars from China to package their flower. With the price of cannabis dropping in Washington, an increased cost in packaging is very hard on a small farm she said.
“The Trump tariffs will undoubtedly hurt the rural parts of Washington State,” said Greg James. He communicates often with marijuana companies through the two magazines he publishes, Marijuana Venture and Sun Grower. “There could well be a snowball effect that results in the outdoor growing community having an even harder time selling their crop,” he said.
Julie Weed wrote the best-selling All I Really Need to Know in Business I Learned at Microsoft. Follow her on Twitter @julie_weed and at www.julieweed.net
Author of the best-selling All I Really Need to Know in Business I Learned at Microsoft. I now write about the marijuana industry and, yes, Weed is my real last name. I've written about 100 articles for The New York Times, as well as articles and cover stories for Inc. magazine.
It’s more than soybean farmers and car makers who could feel the effects of Donald Trump’s tariffs on Chinese products. The legal cannabis industry will take a hit as well.
Vaping devices, and batteries, filters and cartridges created for vaping devices are all subject to the new tariffs said Arnaud Dumas de Rauly, Co-CEO of The Blinc Group. His company develops and sells technologies and products related to vaping and other ancillary cannabis products, and runs an incubator program that helps develop, research, and brand technology related to cannabis and nicotine vaping.
On July 24th, Dumas de Rauly testified as part of The Office of the U.S. Trade Representative public hearings regarding the proposed tariffs, saying that they will raise prices for medical marijuana patients and other consumers who use vaporizers.
By increasing prices on Chinese-made products, Trump has essentially forced American manufacturers to take time out of running their businesses to find alternate suppliers, “or price themselves out of competition with other manufacturers," said Juan Carlos Negrin, President of the New Jersey Marijuana Retailers Association.
Smoke Wallin, president of Vertical, a multi-state cannabis growing and production company, said the tariffs have created a sense of urgency around finding new suppliers in America for vape pens, even though the Chinese manufacturers are much less expensive.
$247M in Cannabis tax revenue in 2017 and “25% of sales come from cannabis vaping products,” said Mr. Dumas de Rauly.
Beyond vaporizer components, "any items essential to the day-to-day operations of a cannabis business, from construction equipment to cell phones, will likely increase in price,” said Kevin Hagan, a strategic advisor who consults on cannabis policy issues at Princeton Public Affairs Group.
Cannabis companies are especially vulnerable to changes in their input costs said Negrin because they are not allowed to deduct business expenses from their taxes. That lowers their profit margins. “A tariff on goods the companies use in daily operations will have a substantially negative impact on their earnings,” he said.
Brooke Davies, executive director of Cannabis Organization of Retail Establishments, a non-profit trade association representing cannabis retailers in Washington State, said that she has already begun to see the effects of the tariffs. Small growers like Sweetwater Farms in Eastern Washington buy glass jars from China to package their flower. With the price of cannabis dropping in Washington, an increased cost in packaging is very hard on a small farm she said.
“The Trump tariffs will undoubtedly hurt the rural parts of Washington State,” said Greg James. He communicates often with marijuana companies through the two magazines he publishes, Marijuana Venture and Sun Grower. “There could well be a snowball effect that results in the outdoor growing community having an even harder time selling their crop,” he said.
Julie Weed wrote the best-selling All I Really Need to Know in Business I Learned at Microsoft. Follow her on Twitter @julie_weed and at www.julieweed.net
Author of the best-selling All I Really Need to Know in Business I Learned at Microsoft. I now write about the marijuana industry and, yes, Weed is my real last name. I've written about 100 articles for The New York Times, as well as articles and cover stories for Inc. magazine.