The shock announcement this week that a federal trade court had ruled that key elements of President Trump’s flagship tariff policy were unconstitutional has come as a major relief for any internationally-facing US business, not least the cannabis sector.
Should the courts manage to survive the incoming tirade of legal and political challenges from the Trump administration, it could see the end of the universal 10% tariffs, and the upcoming ‘reciprocal’ tariffs on countries like China, Mexico and Canada.
There is one certainty about Trump’s America: nothing. A challenge to the ruling is underway, and there is speculation about whether Congress will intervene to save this policy.
Jason A. Little, who heads the cannabis practice team at NY-based law firm Farrell Fritz, says that while this is certainly good news for businesses in general. Little, the leader of Farrell Fritz’s cannabis team, told MEDCAN24 It is the present uncertainty which is the real threat to the US Cannabis sector.
Uncertainty is a killer
He explained that the greater issue was uncertainty.
Uncertainty is stressful, whether you are in the stock exchange or run a small company. The uncertainty can affect budgets and confidence. Even if disruptions don’t materialize, fear itself may cause problems.
The prominent target of Trump’s tariffs has always been China, where many of Little’s clients, who he says are ‘early-stage entrepreneurs, startups, small farmers, processors, retailers and CUARD licensees who are new to business, source products vital to the production of cannabis.
The complex supply chain in which the products are sourced adds to the potential complexity of this issue and its impact.
Little explained that his clients ‘aren’t typically importing these products directly’, but rather from US vendors who themselves rely on international supply chains.
It doesn’t matter if it is fertilizers or sector pellets used for sprays. Or if the chemicals are specific to product formulations. They have been sourced a few steps away. The vendors may be buying from overseas or wholesalers, which adds to the complexity.
Once these import costs start rising, he continued, it creates a ‘trickle-down’ effect that means even those not directly impacted still feel the financial pressure.
The individual price difference may not be huge, but it does add up. We’re seeing 5–10% price hikes on a number of these goods… This is especially true for smaller agricultural producers and processors in states like New York and Massachusetts. The majority of these companies aren’t involved in medical services, but they already face tighter price ranges. “These cost increases are absolutely passed on to them.”
Already, the impact is being felt
The impact of many tariffs has already been felt, even though they haven’t yet entered into effect, were rolled back, or may never come to pass.
The question is whether they are reflecting actual market conditions and/or perceptions or not. This is part of the problem.
There are both direct and secondary financial pressures that are increasing costs.
“Then there’s what I’d call ‘phantom stress’, the opportunistic pricing that happens when local producers see an opening. Local suppliers may charge more if cheaper imported alternatives no longer exist.
“Uncertainty allows for opportunism to flourish and dissuades entrepreneurs from making cannabis investments. They may start asking, ‘Should I be growing soybeans instead of cannabis?
This is the type of situation that we are experiencing. When economic and regulatory uncertainty combine, it makes it easier for people to say, ‘Maybe not now.’ These decisions, over time can have real impact on the cannabis industry.”
Stay firm
Little says that when asked for advice on how to best advise his clients, the best thing to do is not to act at all.
Keep on going. “Don’t change anything major at this time.”
He said that, on a more granular scale, the price increase is likely to be far lower than what businesses have experienced due to inflation in the last four years.
Furthermore, given the uncertainty and ever-changing landscape of US politics and regulation, ‘there is risk either side’, and changing your entire business could ultimately work against you when the dial shifts again.
“If you wanted to stock up pre-tariff… that might not be a terrible idea. But that’s risk… you’re going outside of budget, you’re increasing costs, you’re storing things you wouldn’t necessarily store. On the flip side… if you do nothing, it’s risky if prices continue to increase… in a manner and with enough of a regularity that it affects you.
The best time to start is right now. You have a business plan, you have a budget… and unless there are material issues… there isn’t a reason right now to change a whole lot of what you’re doing.”
The shock announcement this week that a federal trade court had ruled that key elements of President Trump’s flagship tariff policy were unconstitutional has come as a major relief for any internationally-facing US business, not least the cannabis sector.
Should the courts manage to survive the incoming tirade of legal and political challenges from the Trump administration, it could see the end of the universal 10% tariffs, and the upcoming ‘reciprocal’ tariffs on countries like China, Mexico and Canada.
There is one certainty about Trump’s America: nothing. A challenge to the ruling is underway, and there is speculation about whether Congress will intervene to save this policy.
Jason A. Little, who heads the cannabis practice team at NY-based law firm Farrell Fritz, says that while this is certainly good news for businesses in general. Little, the leader of Farrell Fritz’s cannabis team, told MEDCAN24 It is the uncertainty which is threatening to the US Cannabis sector.
Uncertainty is a killer
He explained that the greater issue was uncertainty.
“Uncertainty causes stress whether you’re on the stock market, or managing a small-business. The uncertainty can affect budgets and confidence. Even if disruptions don’t materialize, fear itself may cause problems.
The prominent target of Trump’s tariffs has always been China, where many of Little’s clients, who he says are ‘early-stage entrepreneurs, startups, small farmers, processors, retailers and CUARD licensees who are new to business, source products vital to the production of cannabis.
The complex supply chain in which the products are sourced adds to the potential complexity of this issue and its impact.
Little explained that his clients ‘aren’t typically importing these products directly’, but rather from US vendors who themselves rely on international supply chains.
The actual sourcing of fertilizers, pellets for sector, sprays or processing chemicals that are used to formulate products is one step away. They may source from foreign manufacturers or wholesalers. This adds to complexity.
Once these import costs start rising, he continued, it creates a ‘trickle-down’ effect that means even those not directly impacted still feel the financial pressure.
The individual price difference may not be huge, but it does add up. We’re seeing 5–10% price hikes on a number of these goods… This is especially true for smaller agricultural producers and processors in states like New York and Massachusetts. The majority of these companies are not involved in medical services, but they already face tight prices. “These cost increases are absolutely passed on to them.”
Already, the impact is being felt
The impact of many tariffs has already been felt, even though they haven’t yet entered into effect, were rolled back, or may never come to pass.
The question is whether they are reflecting actual market conditions and perceptions or not. This is part of the problem.
There are both direct and secondary financial pressures that are increasing costs.
“Then there’s what I’d call ‘phantom stress’, the opportunistic pricing that happens when local producers see an opening. Local suppliers may charge more if cheaper imported alternatives no longer exist.
“Uncertainty allows for opportunism to flourish and dissuades entrepreneurs from making cannabis investments. They may start asking, ‘Should I be growing soybeans instead of cannabis?
This is the type of situation that we are experiencing. When economic and regulatory uncertainty combine, it makes it easier for people to say, ‘Maybe not now.’ These decisions, over time can have a real impact on the cannabis industry.”
Stay firm
Little says that if asked for advice on what to advise his clients to do in these turbulent times, the best option is to not take any action.
Keep on going. “Don’t change anything major at this time.”
He said that, on a more granular scale, the price increase is likely to be far lower than what businesses have experienced due to inflation in the last four years.
Furthermore, given the uncertainty and ever-changing landscape of US politics and regulation, ‘there is risk either side’, and changing your entire business could ultimately work against you when the dial shifts again.
“If you wanted to stock up pre-tariff… that might not be a terrible idea. But that’s risk… you’re going outside of budget, you’re increasing costs, you’re storing things you wouldn’t necessarily store. On the flip side… if you do nothing, it’s risky if prices continue to increase… in a manner and with enough of a regularity that it affects you.
The best time to start is right now. You have a business plan, you have a budget… and unless there are material issues… there isn’t a reason right now to change a whole lot of what you’re doing.”
Cannabis Law Resources for Poland
Discover essential legal information about the cultivation of cannabis, its sale, and regulations governing medical products in Poland. These guides will help you understand the legal requirements, such as certifications and permissions.
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Polish News Registration and Interests of Cannabis Businesses
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Permissions for Cannabis Sales in Poland
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Authorization for Importing or Manufacturing Medical Products
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Permission for Manufacturing or Importing Medical Products
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Certificate of Good Manufacturing Practices (GMP)
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Registration of Medical Products in Poland