Trump's Trade War Could Hurt the Cannabis Industry

As the trade war between the Chinese government and Donald Trump heats up, most people assumed the cannabis industry would be mostly unaffected since the amount of marijuana we export to China is 0. But there is one way Trump's trade war will actually damage the industry.

One of the goods the Trump administration added to its list of Chinese products that could be subject to a new 25 percent tax is vaping devices. While most of the companies that make vapes and products to put in them are based in the United States, the actual devices are mostly manufactured in China. 

Now a tariff isn't necessarily the worst thing in the world. Some companies could simply absorb the added tax and make less money, increase prices on vapes for customers or they could move the manufacturing of those devices to another country. However part of the reason why vapes are made in China is because companies need the lower labor costs in order to turn a profit on them. One expert in the industry estimated that most companies that sell vaping devices only turn a 10 to 15 percent profit on them. So since they're already making so little profit on it, the only reasonable course of action for them is to raise prices on consumers.

So if you're someone who likes your cannabis in vape form, you may have to pay a little extra starting next month.

(h/t CNBC)


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