Connecticut’s cannabis sector is facing rising costs as a result of new tariffs placed by the Trump Administration on Chinese imports. Tariffs of up to 125% are being imposed on a number of goods that are used by the cannabis industry for cultivation and retail.
Infrastructure and Equipment
David Salinas is the co-owner and manager of Hi! People Cannabis Market, Derby reported that their team was forced to purchase essential infrastructure items, like lighting and HVAC, in order to prevent a 35% projected cost increase. Salinas said, “We haven’t received our building permit and had to purchase our electrical package last week before the cost increased by 35%.”
The Packaging of Vape Hardware
Ben Zachs owner of Fine Fettle, a dispensary, has highlighted the fact that vape cartridges as well as packaging materials, which are often made in China, are especially affected. Packaging is the biggest issue that we are seeing quickly. Zachs noted that much paper and packaging was made in China or abroad. Zachs also highlighted the effect on vape carts. “The vast majority of vape carts are made with components and parts from China,” he said.
Operating Adjustments and Market Impact
Rino Ferarese of Affinity Grow a Connecticut-based grower, said that the company sources even its large equipment, such as conveyor belts and induction sealings. He voiced concerns over the rising cost of equipment and possible need to transfer these costs onto the consumer. Ferrarese referred to improvements in the quality of Chinese manufactured equipment.
Zachs also noted that, while some businesses may be able to absorb these costs and others might have to increase their prices. This can affect competitiveness.