DETROIT (WXYZ) — As the United States and China continue to increase tariffs on each other's goods, Michigan's cannabis industry is getting caught in the middle.
President Donald Trump raised tariffs on China to 145% on most goods and 245% on electric vehicles and syringes. China hit back with 125% tariffs on all American exports just last week.
For Michigan's cannabis industries, the conversation has now turned to parts, packaging and supplies, as much of that is being imported from China.
“It is just another thing to deal with, which it’s already an industry where you’re dealing with a lot," founder of North Coast Travis Murphy said.
North Coast is a processing company that supplies just about everything that goes into the products inside dispensaries like House of Dank including vape parts and other materials.
“Vape carts, glass tips... custom boxes," Murphy said about all the things he purchases and provides to the over 100 cannabis businesses he works with across the state.
Murphy primarily imports from China and so the price for him to buy recently went up, and so the price to sell could go up soon as well.
“For certain goods like a disposable vape, those cost $3 to $4 to import per unit," he said. "You’d be seeing a like a $10 increase to the customer.”
While Murphy isn’t seeing the higher costs just yet because he has a stockpile that will last him a few months, he is preparing to have to pivot where he buys from.
Meanwhile, Anthony Allos, who owns ARO Connection and supplies packaging for businesses like PUFF Cannabis Co., says he is starting to see the higher costs but adds that he will not raise prices for his customers for at least another few months.
“As far as my company, I'm not going up, I'm actually eating the costs of the tariffs for my customers just because I know what kind of hard time it is for the cannabis industry," Allos said.
Allos, however, knows that not every company is in a position to do what he's doing, which is when customers may start to see price increases.
"They’re definitely going to see cost and price go up," he said.
Allos primarily buys from China as well but says that may soon change.
"Now that China has the tariffs, it’s forcing us to go back domestically, which eventually in my opinion I think would be good," he said.
While these companies and suppliers hope a deal is reached between the two countries soon, they sit and wait in limbo to see what happens next.
