President Donald Trump’s tariffs aren’t just a serious downer for investors on Wall Street but also those looking to get a THC high. The new taxes on imports from scores of countries around the world will affect the cost of many of the items that pot smokers use partake in their habit.

“Items such as tins, vape hardware and specialized glass remain difficult to source domestically,” reports Reuters. These items are mainly imported from Asia. Even growing cannabis in the United States will become more expensive as producers rely on compost and peat imported from Canada whose goods were already slapped with tariffs earlier this year.

Cannabis manufacturers will have to pass the added costs of tariffs onto consumers

Trump announced a 10% tariff across the board on nations and additional “reciprocal” tariffs that will take the new import tax up to as high as 50% in some cases. Any firm that relies on goods from those nations “will need to take a serious look at how they might absorb the extra costs or alter partnerships,” Hara Supply CEO Bryan Gerber told the news agency. His company is the world’s largest manufacturer of cones and combustibles.

In most cases, those added costs will be passed onto consumers as “most cannabis businesses don’t have the margin flexibility to absorb a 10%-15% increase,” explained managing partner at AE Global, Mike Forenza, which makes packaging products for cannabis firms.

An example of the supply chain headache was laid out by the president of Wasserstrom Co, Brad Wasserstrom, a supply chain firm working with cannabis companies. One of the manufacturers that his company works with imports glass from China, wood from Canada and sends it to Mexico to be put together before being distributed in the United States.

“How is that getting taxed?” he wondered. “That’s a challenge for everyone and ultimately it will come down to the consumer level,” he added.

Demand for cannabis slowing as prices rise, consumers likely to turn to the illicit market

The cannabis market is already beginning to soften says Wasserstrom as manufacturers have already begun to pass the cost of the tariffs down the line. He says that inbound order rates are starting to slow. With the costs being passed on to the end user it’s expected that consumers will likely be driven to the illicit market further cutting into their margins.

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