Article

Raising Tariffs -- Not Good for U.S. Cannabis Sector.

May 15, 2019

 

The United States increased tariffs from 10 to 25 percent on Chinese exports May 10 in an escalation of its trade war with China will increase costs for many businesses across the cannabis supply chain. Nothing new here.  A  few "experts" have reached the same conclusion. The real issue is the impact on cannabis-related jobs.  The raised tariffs will likely cause a 20 to 25 percent cost increase for vaping devices, packaging, extraction equipment, dispensaries' exit bags, and other products that are primarily manufactured in China. The manufacturing jobs that produce popular cannabis products and the intellectual property behind the actual manufacturing processes have never been based in the U.S. The technology of vaping device has been invested in the U.S., but manufacturing the products—the vape cartridges themselves — is costly and labor intense to produce the quantities needed. If cannabis businesses are forced to pass the increased costs along to their patients and customers, it will send consumers to the black market (which controls 74% of the estimated real market).
We are not a prominent endorser of vaping products; believing a contracting market will limit its future. As for today, the products occupy a significant labor force in the U.S.  

 

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