When people think of trade wars, cannabis probably isn’t the first industry that comes to mind. But while the plant itself isn’t crossing international borders (legally, anyway), the materials and tools used to grow, process, and package it often are.
Under President Donald Trump’s trade policies—both from his first term and new proposals emerging in 2025—tariffs have expanded beyond legacy sectors like steel and automobiles to include a wide range of industrial, agricultural, and consumer goods. That includes many of the products cannabis businesses rely on every day: grow lights, steel frames, climate systems, vape hardware, and packaging materials.
Although cannabis isn’t directly targeted in tariff negotiations, the industry has become one of many caught in the crossfire of broader U.S.-China trade tensions. As new tariffs roll out and older ones persist, operators across the U.S. are seeing rising costs, shifting supply chains, and new questions about long-term sustainability in an already challenging market.
This article explores how Trump-era tariff policies—past, present, and speculative future—could affect the U.S. cannabis landscape, from cultivation facilities to retail shelves. We’ll also consider the global context and what this means for international players watching from the sidelines.
Table of Contents
- A Look Back: How Trump’s First-Term Tariffs Reshaped the Cannabis Supply Chain
- What’s Happening Now: Tariffs Are Back—and Broader Than Before
- Looking Ahead: Where Tariffs Might Take the Cannabis Industry
- Adapting in Real Time: How the Industry Is Responding
- Global Ripple Effects: How Tariffs Are Reshaping Cannabis Beyond U.S. Borders
- Conclusion: The Pressure to Evolve—or Be Left Behind
A Look Back: How Trump’s First-Term Tariffs Reshaped the Cannabis Supply Chain
Before diving into what’s happening now, it’s worth revisiting how the first wave of U.S. tariffs—introduced during Trump’s initial term—impacted the cannabis industry. While cannabis businesses weren’t directly targeted, the effects rippled through the supply chain in ways that still matter today.
Tariffs Expanded in 2018–2019
During Donald Trump’s first term, the U.S. introduced a series of tariffs on goods imported from China under Section 301 of the Trade Act. These tariffs, implemented between 2018 and 2019, were wide-reaching—covering over $250 billion in products across sectors like electronics, agriculture, metals, and manufacturing inputs.
While cannabis was not a direct focus of these trade measures, the industry quickly felt the indirect effects. Most U.S.-based operations rely on imported materials: LED grow lights, hydroponic systems, HVAC units, packaging components, and vape hardware—many of which are produced overseas, particularly in China.
Vape Hardware and Packaging Prices Increased Sharply
When tariffs increased from 10% to 25%, businesses across the cannabis space reported higher costs and delays. For example, a disposable vape cartridge that previously cost around $2.00 to import rose to roughly $2.50 under the tariff structure. For companies ordering thousands of units, this added up quickly.
A California cannabis brand also noted that tariffs on packaging resulted in a two-month delay and a 25% price increase on custom pre-roll tins. For smaller operators especially, unplanned cost increases placed pressure on already tight margins. Some brands were able to adjust, but others faced tradeoffs—either absorbing the expense or modifying quality and design choices to stay within budget.
Infrastructure Costs Rose Due to Steel and Aluminium Tariffs
Other materials, such as steel and aluminium, also became more costly due to separate tariffs introduced in 2018—25% on steel and 10% on aluminium imports. These increases had a measurable impact on facility construction, greenhouse builds, and indoor cultivation infrastructure. Reports from that time indicated that steel framing and conduit costs nearly doubled in some markets, directly influencing the cost of cannabis infrastructure projects.
A Global Policy With Local Impacts
In many ways, these early tariff rounds revealed how closely cannabis is connected to broader global trade networks. Even without crossing international borders, the plant’s supply chain depends on materials that do. For many businesses, it was an early lesson in how quickly international policy decisions, especially in key supplier countries, can influence the economics of domestic cannabis production.
What’s Happening Now: Tariffs Are Back—and Broader Than Before
In 2025, tariffs are again shaping the cost landscape for cannabis businesses in the U.S. Under Trump’s second term, the current trade policy has introduced a more expansive tariff system, applying not just to goods from China but to imports from a wide range of countries. The most notable update? A universal baseline tariff of 10% on nearly all imported goods, with significantly higher rates for countries that have large trade deficits with the U.S. Tariffs on Chinese imports have reached levels as high as 145%, including many of the tools cannabis businesses rely on to operate. Recently, tariffs on Chinese imports have been temporarily reduced to 30%, but can rise again in the next few months.
Cannabis Inputs Under Pressure
Many of the products cannabis operators rely on—from LED grow lights and hydroponic pumps to packaging materials and steel greenhouse frames—are now subject to these tariffs. One commercial builder of cultivation facilities recently reported that costs for aluminium framing, lighting components, and security systems had increased by 10% to 40% across the board. For new operators looking to build or expand, these increases can add hundreds of thousands of dollars to a project’s budget.
For example, importing a pallet of LED grow lights that used to cost $50,000 might now run closer to $60,000 or more after tariffs are factored in—without any change in product or quality.
Vape Hardware Feels the Pinch
Vape technology is especially vulnerable. The vast majority of both nicotine and cannabis vape cartridges, pods, and batteries used in the U.S. are manufactured in China, and many of these goods have been subject to stacked tariffs totalling over 125%. A vaporiser that once cost $10 to manufacture and import may now cost closer to $22–$25 by the time it hits U.S. shelves.
Some companies have attempted to shift production to Malaysia, Vietnam, or Mexico—but these countries have also faced U.S. tariff threats or partial implementation, reducing the long-term viability of those pivots.
Everyday Costs Are Rising
Even smaller-scale items haven’t been spared. Reports from cannabis packaging distributors note that pre-roll tubes, custom jars, and printed labels now come with an average 15–25% cost increase. And because these are used in bulk, the added expense adds up quickly—especially for brands trying to stay competitive without hiking retail prices.
The universal tariff has made many “cheap alternative” options less cost-effective. Even packaging sourced from countries like Canada or South Korea is now taxed at 10%, which, while not a massive increase on its own, still narrows the gap between low-cost and premium products—especially when layered with other rising expenses across the supply chain.
Planning Around Uncertainty
Perhaps the most challenging aspect for operators isn’t just the increased cost—it’s the unpredictability. Some countries have seen tariff rates fluctuate within weeks, making it difficult for importers to forecast budgets or secure pricing guarantees. Several cannabis equipment distributors have started stockpiling inventory when possible or requiring upfront payments to lock in pricing, tying up working capital in the process.
In an industry already shaped by inconsistent regulations and thin margins, this level of trade volatility has become another operational headache—one that affects businesses at nearly every level, from cultivators to product manufacturers to retailers.
Looking Ahead: Where Tariffs Might Take the Cannabis Industry
With tariffs already reshaping costs across the cannabis supply chain, the question isn’t whether the pressure will continue—it’s how the industry and the country will respond if it does.
When Domestic Policy Meets Global Instability
The current trade environment reflects something bigger than just economic policy. As the U.S. leans further into protectionist strategies—tariffs, tax incentives, supply-side stimulus—many analysts see echoes of other historical moments when governments tried to reconsolidate economic power during periods of decline.
In the late 1970s and early 1980s, the U.S. responded to inflation and foreign competition by hiking tariffs and implementing “Buy American” campaigns. It worked for some sectors in the short term but ultimately drove up consumer prices and triggered global retaliation. Similar patterns were seen in post-WWI Britain when the empire tried to reinforce domestic industries and preserve colonial trade routes—only to face economic stagnation and increasing pressure from rising powers like the U.S. and Germany.
Today’s tariff wave has a familiar flavour: an attempt to protect American manufacturing, reduce reliance on China, and reassert global influence. But history shows that these moves often have unintended consequences, including supply shortages, cost spikes, and diplomatic fallout.
Could Federal Legalisation Become an Economic Lever?
If financial pressure continues to mount on the cannabis industry, federal reform could become less of a moral question and more of an economic strategy. Legalisation would unlock new tax revenue, national supply chains, and domestic manufacturing opportunities—all appealing outcomes for a government trying to stimulate growth without adding to inflation.
We’ve seen this logic before. During the Great Depression, alcohol prohibition ended not just because of public demand but because the federal government needed the tax revenue from alcohol sales. Similarly, the 2009 financial crisis spurred massive investment in clean energy and tech as the U.S. sought new sectors to anchor recovery. Cannabis could serve a similar role—especially as the country looks for high-growth industries that are already operating at scale, just not yet federally sanctioned.
Global Perception Matters
To the rest of the world, the U.S. is becoming harder to predict. As tariffs escalate and political rhetoric intensifies—even targeting long-standing allies—the country’s reliability as a trade partner has started to waver. For cannabis, this could mean international investors and innovators begin placing their bets elsewhere.
Countries like Canada, Germany, and Thailand are already expanding medical and adult-use cannabis programs with far fewer regulatory and trade barriers. If the U.S. continues to isolate economically, the global cannabis market might grow around it rather than with it.
The Big Question: What Happens If It All Cracks?
When industries like cannabis—already heavily regulated, overtaxed, and underbanked—start absorbing economic shockwaves from global trade tensions, it points to deeper structural stress. These aren’t isolated issues. They’re signals.
Historically, late-stage capitalist societies have attempted to prop up internal markets through trade protectionism, wealth redistribution via tax cuts, and nationalist economic narratives. These strategies often precede periods of upheaval or transition—think the fall of the Roman Empire, the collapse of the Soviet Union, or the restructuring of post-colonial economies in the 20th century.
Cannabis may seem like a niche topic in that context, but it’s emblematic of a broader shift. What was once counterculture is now a legitimate industry caught in the push-pull between economic nationalism and globalism. Whether that results in federal legalisation, new trade partnerships, or a reshuffling of where cannabis innovation happens—it’s clear the plant is no longer on the sidelines of these bigger conversations.
Adapting in Real Time: How the Industry Is Responding
With rising costs, shifting supply chains, and uncertain trade policies, cannabis operators across the U.S. are being forced to get scrappy. From cultivation to retail, businesses are rethinking sourcing, reworking budgets, and navigating new challenges with fewer safety nets.
Passing Costs—or Absorbing the Hit
In some markets, we’re already seeing the impact of tariffs reflected in higher consumer prices—especially on vape cartridges, pre-rolls, and branded packaging-heavy products. For example, a vape that used to retail at $35 might now hover closer to $40 or more as brands try to recover the extra cost of imported hardware and shipping.
But raising prices isn’t always a viable option. In saturated markets like California or Oregon, where competition is fierce and illicit alternatives are just a text away, many businesses are choosing to absorb those added costs to stay competitive—eating into already razor-thin margins in the process.
Domestic Alternatives Are Growing—But Slowly
Some companies have started shifting toward U.S.-based suppliers for everything from growing equipment to child-resistant jars. While that shift supports local manufacturing and avoids tariffs, it’s not without tradeoffs. Domestic products often have higher base prices and longer production timelines, especially for custom orders or specialised equipment.
For smaller operators, the switch isn’t always realistic. Many rely on overseas manufacturers because of pricing, volume capacity, or simply because there aren’t comparable domestic options—particularly for things like vape hardware or extraction tech.
Inventory Hoarding and Supplier Shakeups
To manage volatility, distributors and multi-state operators have started stockpiling critical inventory ahead of known tariff hikes or anticipated policy changes. That means large upfront purchases, warehousing costs, and tying up capital that could otherwise be used for expansion, hiring, or marketing.
At the same time, supply relationships are shifting. Some importers are switching to “tariff-hopping” strategies—sourcing parts from China but assembling them in countries with lower tariffs, like Mexico or Vietnam (at least until they, too, get caught in the crossfire). Others are renegotiating supplier contracts entirely to lock in prices or add flexibility in case of future disruption.
Innovation Under Pressure
Not all the change is reactive. For some companies, this moment is inspiring real innovation. Brands are experimenting with low-cost packaging alternatives, modular grow systems, and localised manufacturing partnerships that might not have been considered under more stable circumstances. While tariffs have added friction, they’ve also forced some operators to future-proof their supply chains and streamline their operations.
Global Ripple Effects: How Tariffs Are Reshaping Cannabis Beyond U.S. Borders
While the focus of Trump-era tariffs has been on imports into the U.S., the consequences don’t stop at the border. Cannabis companies abroad are also feeling the aftershocks—some through rising costs, others through newfound competitive advantages.
Canada and the Packaging Squeeze
Canadian cannabis producers—particularly those sourcing materials from the U.S. or China—have started to experience rising costs, even though Canada isn’t directly involved in U.S. tariff enforcement. Why? Because many packaging manufacturers serving Canadian brands rely on U.S. or Chinese materials that are now more expensive due to tariffs.
This means products like raw materials, mylar bags, aluminium tins, and vape cartridges have quietly ticked up in price for Canadian companies. Some brands have responded by seeking domestic alternatives or shifting orders to suppliers in Latin America or Europe. For companies that were already operating on thin margins, especially in Canada’s tightly regulated market, even a small price hike can disrupt long-term plans.
A Window of Opportunity for Global Competitors
While U.S. companies wrestle with import taxes and rising infrastructure costs, producers in countries with fewer trade restrictions are beginning to gain ground. Places like Germany, Colombia, and Thailand—where cannabis markets are expanding and international investment is encouraged—are positioning themselves to be more agile and cost-effective in the long run.
If U.S. cannabis businesses continue to face elevated production costs, we may see global buyers, medical programs, and wellness markets turn to alternative producers who can deliver consistent supply at lower prices. In the long term, this could mean that the U.S.—once expected to dominate the global cannabis market—finds itself priced out of international relevance.
Long-Term Outlook: Global Trade, Local Consequences
The bigger concern isn’t just losing out on market share—it’s losing influence. If other nations begin to set the tone for cannabis standards, sustainability practices, and cross-border commerce, the U.S. may end up playing catch-up instead of leading the conversation.
Federal legalisation could shift that trajectory, but until then, tariff-heavy policy and economic isolation are making it harder for the U.S. cannabis industry to compete globally. The irony? A market that helped pioneer cannabis culture is now at risk of being left behind by the rest of the world.
Conclusion: The Pressure to Evolve—or Be Left Behind
Tariffs are just taxes on movement. On materials. On collaboration. And in cannabis, a sector built on constant adaptation, movement matters.
Whether you’re a cultivator pricing out your next facility, a consumer watching prices creep up, or a policymaker weighing economic options, the effects of trade strategy aren’t theoretical—they’re structural. And in this moment, they’re asking the cannabis industry—and the U.S. at large—a bigger question:
Will this pressure lead to innovation, or stagnation?
Because it’s not just about weed; it’s about how the U.S. responds when the systems they’ve relied on become too expensive to sustain. Do they build something new? Do they invest in what’s been overlooked? Or do they let the opportunity pass while other countries move ahead?
Cannabis is uniquely positioned. It’s young, flexible, and not yet cemented in global trade norms. That means it has the potential to thrive in a new economic model—or get locked out of it entirely.
One way or another, the squeeze is coming. And how we respond may say less about cannabis and more about what kind of future we’re willing to fight for.
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