For more than a year, President Trump has been waging an intense trade war with China, culminating in both sides increasing their tariffs on imported goods.With 25 percent tariffs levied on $200 billion of Chinese goods, Trump is “still threatening to slap duties on another $325 billion of goods,”. The fallout has been considerable. According to the business news outlet, more than 50 U.S. companies are reportedly pulling their production operations from China.
The rippling effects of the trade war have also been felt for some in the U.S. cannabis market. Julia Jacobson, CEO of Oakland, California-based, a sustainable cannabis company, said that because most of her company’s packaging is produced in China, they are being hit with 25 percent taxes on their orders. “Our custom tins for our pre-roll pack were finished, but not shipped when the tariffs first kicked in,” she related.
The situation has become untenable for Jacobson. “While many people think the cannabis industry is striking it rich, with the current regulations and supply chain we are all operating on extremely thin and often negative margins, so any increase in our costs of goods hurts,” she explained., a cannabis-focused Portland, Oregon-based firm, said he has not heard clients complain about the trade war’s effect on their businesses.
For companies like Aster Farms that are feeling the effects of the tariffs, little can be done. Citing the proverbial banking problem faced by many marijuana businesses, an obstacle rooted in the federal illegality of the substance, Salzhauer sounded an understandably pessimistic note.
Couldn’t happen to more deserving people!