Cannabis vape companies worry tariffs will impact consumer safety

Major cannabis vaporizer companies increasingly are moving manufacturing operations away from China, due in part to a 20% tariff enacted by the Trump Administration.Now, some operators fear price compression accompanying the tariffs – now totaling 45% for goods manufactured in China – will prompt unscrupulous operators to purchase cut-rate vape cartridges and other inputs, potentially jeopardizing consumer health.

ADVERTISEMENT Executives from many U.S.-based vape companies say the process of finding – and, in some cases, building – new manufacturing operations has been a years-long endeavor that is getting renewed attention because of the tariffs.Shenzhen, China, is a well-known manufacturing hub located near Hong Kong, a financial and shipping powerhouse; together, the Special Economic Zone still is responsible for producing the majority of the world’s vape hardware.

But that is changing, albeit slowly.Fallout from initial tariffs In March 2018, during U.S.

President Donald Trump’s first term in office, he applied $50 billion in tariffs to Chinese goods, including a 25% tariff on vape products manufactured in China.The move prompted many U.S.

companies manufacturing vapes in China to explore other options, and some executives say they were forced to absorb the price increases because customers in the cannabis industry already were struggling under heavy regulations and taxes.“Honestly, we didn’t raise our prices; we really absorbed the impact of those tariffs into our cost of doing business for the purpose of keeping prices as low as possible for consumers,” said Laura Fogelman, chief of staff and vice president of communications at San Francisco-based vape company Pax.

“At that point, it was a 25% tariff, which was not insignificant, and that was really what catalyzed our interest in moving manufacturing out of China,” Fogelman told MJBizDaily.Today, the company’s Pax Pods and ba...