As markets whipsaw in memecoin-fashion since the beginning of President Donald Trump’s on-again, off-again tariffs against various other nations, cannabis executives are navigating the recent surge in U.S. levies, particularly on Chinese goods.

Marijuana businesses have been reacting with relatively less alarm than other sectors, partially due to the industry’s domestic supply chain advantages and experience with previous market disruptions during the COVID-19 pandemic.

Still, that’s not to say the latest tariff against China – a major supplier of U.S. cannabis hardware – wouldn’t do damage to the marijuana trade. But it’s still up in the air of how that shapes the future if it’s subject to change at any point in time, especially as a new 90-pause on the rest of Trump’s tariff list slows the bleeding in any ways.

Ari Raptis, founder of cannabis logistics company Tulare Transportation, noted that uncertainty is the biggest challenge facing operators as tariffs create cost instability for essential imported items.

That goes for “items like vape cartridges, packaging and hardware, most of which are still heavily reliant on overseas manufacturing,” Raptis said. “Margins are already thin and now they’re asked to absorb or pass along additional costs, often without much lead time or clarity.”

The company, which handles around $1.2 billion worth of cannabis products annually across 28 states, has observed partners struggling with delayed shipments and sudden price increases.

“Even companies that want to shift sourcing to the U.S. are finding it hard to do it so quickly. It’s not a plug and play situation. Domestic infrastructure isn’t fully built out yet for the volume of compliance needs for cannabis,” he said.

The question of who absorbs these additional costs remains contentious throughout the supply chain.

“Someone has to absorb the shock, whether it’s a tariff, a fuel increase, supply chain delays,” Raptis explained. “Right now, the pressure is getting passed around like a hot potato between importers, manufacturers, distributors and retailers.”

One potential upside of the situation is cannabis stocks may be somewhat insulated from tariff concerns due to their already depressed valuations, suggested Anthony Coniglio, CEO of NewLake Capital (OTCQX: NLCP).

“These stocks are already priced for price compression and margin compression well beyond what would happen in tariffs,” he noted. “In a normalized sector, investors would be adjusting profit expectations and therefore price targets for stocks. But since cannabis is already in an oversold position, we shouldn’t see that come into play for the cannabis sector.”

Additionally, the impact varies significantly across different ancillary marijuana businesses that deal in services instead of cannabis goods.

Companies like TILT Holdings (Cboe: CA:TILT) (OTCQB: TLLTF), which still relies heavily on hardware from China, unlike others, has seen its stock drop around 42% over a five-day period following Trump’s tariff announcements. By contrast, digital platforms like Weedmaps – with minimal foreign supply chain exposure – saw only a 3% decline in the same period.

Both Raptis and Coniglio pointed to the industry’s experience during COVID-19 as evidence of its general adaptability.

“During COVID, everyone’s home; these businesses were declared essential and there was a growth spurt for the industry. And so they had to weather through the supply chain disruption, not just to keep their current business alive, but to grow their business,” Anthony said.

Raptis agreed that the industry has become more resilient due to the pandemic years.

“We’re seeing an uptick in demand for shared warehouse space and fulfillment solutions to reduce exposure to shipping disruptions,” Raptis said. “The sentiment is frustrating but pragmatic. The industry is used to working through headwinds and tariffs are just the latest.”

For cultivators and dispensaries, tariff impacts may be limited versus other industries.

“On the cultivation side, on the dispensary side, it’s much less. But 5% to 7%, call it, their expenses will go up. If they can pass some of that on to the consumers or the customers of theirs, then you should only see a few percentage point impact on margin,” Anthony explained.

At the same time, newly-licensed operators in emerging markets like Kentucky could face greater challenges, as they’re just beginning to build out their facilities and may need to purchase equipment potentially affected by tariffs.

Overall, industry leaders are preparing for ongoing trade tensions while remaining hopeful that the situation isn’t as dire as it first appeared.

“We always take the approach that you prepare for the worst and hope for the best,” Anthony said. “When I look at this tariff dialogue, while I believe that the worst will not come to pass, I do think when it comes to China, all signs point to a prolonged tariff confrontation.”

For Raptis, the future will reward companies that prioritize logistics.

“The next wave of growth will come from companies that turn logistics into strength and not an afterthought,” he said.

California Governor Gavin Newsom announced that over $316 million worth of illegal cannabis was seized in the first quarter of 2025. The state said the seizures demonstrated its commitment to the legal cannabis market. The value of the seizures might be a little generous as the state is placing a roughly $2,600 price per pound while the average is generally around $1,000 per pound.

The statistics for the first quarter are as follows:

• 212,681 illegal cannabis plants eradicated
• 120,307 pounds of illegal cannabis seized
• 99 warrants served
• 35 firearms seized
• 29 arrests
• $474,462 cash seized

“This task force continues to make impressive progress disrupting illegal cannabis operators and their supply chain,” said Nathaniel Arnold, Chief of the Law Enforcement Division for the California Department of Fish and Wildlife (CDFW). “UCETF’s accomplishments demonstrate the dedication of all agencies involved in the taskforce.”

The Governor’s Unified Cannabis Enforcement Task Force (UCETF), the Department of Fish & Wildlife (DFW), and the Department of Cannabis Control (DCC) all worked together for the task force.

The UCETF said in a statement that it seized a total of $67,258,232 worth of unlicensed cannabis during the first quarter of the year. The task force’s enforcement efforts also included:

• 19 search warrants served
• 77,923 illegal cannabis plants eradicated
• 40,747 pounds of illegal cannabis seized
• $330,808 cash seized

Agencies involved in UCETF’s first quarter enforcement actions include Department of Cannabis Control, California Department of Fish and Wildlife, California State Park, California Department of Corrections and Rehabilitation, California Department of Pesticide Regulation, Employment Development Department, California Department of Tax and Fee Administration, Oakland Fire Department, City of Oakland Police Department, Torrance Police Department, Alameda County District Attorney’s Office, and California Air National Guard.

DFW’s enforcement efforts for the first quarter 2025 included:

• $97,476,308 worth of illegal cannabis seized
• 47 search warrants served
• 101,473 illegal plants eradicated
• 8,340 pounds of illegal cannabis seized
• 11 firearms seized
• 9 arrests
• $27,073 in cash seized

DCC’s enforcement efforts for first quarter of 2025 included:

• $151,752,966 worth of illegal cannabis seized
• 33 warrants served
• 33,285 illegal plants eradicated
• 71,220 pounds of illegal cannabis seized
• 24 firearms seized
• 20 arrests
• $116,581 in cash seized

“We remain unwavering in our aggressive, strategic approach to reducing illicit cannabis activity,” stated Bill Jones, Chief of DCC’s Law Enforcement Division. “By staying ahead of the threats and swiftly dismantling illegal operations, we are driving up the cost of doing business for bad actors and delivering on our commitment to protect California’s communities and the legitimate industry.”

The Netherlands launched a new phase in its cannabis regulation initiative this week, requiring participating coffee shops in various cities to sell only marijuana products sourced from government-authorized growers.

The expansion, first announced in 2022, aims to eliminate a long-standing legal loophole in Dutch policy, where selling cannabis was mostly tolerated but production remained illegal.

“Weed was sold here legally for 50 years, but the production was never legal. So it’s finally time to end that crazy, unexplainable situation and make it a legal professional sector,” Rick Bakker, commercial director at producer Hollandse Hoogtes, told The Associated Press.

Around 80 authorized coffee shops across 10 municipalities – with notably Amsterdam not part of the list – must now source cannabis exclusively from 10 government-licensed producers, ending their reliance on unregulated suppliers.

There are around 565 cannabis coffee shops throughout the country, with most still operating under the traditional tolerance policy rather than the new regulated system, according to StratCann.

Those 10 legal growers are:

• Almere
• Arnhem
• Breda
• Groningen
• Heerlen
• Hellevoetsluis
• Maastricht
• Nijmegen
• Tilburg
• Zaanstad

According to StratCann, the transition became mandatory for participating shops as of Monday, despite some operators expressing readiness concerns in March.

The regulated program includes cannabis flower, edibles and hash products. StratCann reported that by the end of last year, 70 of the 75 participating coffee shops had already begun selling regulated cannabis flower and hash, but were still permitted to offer unregulated products alongside them until an April 7 deadline.

Hollandse Hoogtes, located near the German border, produces about 200 kilograms of cannabis weekly with strict quality controls. Benjamin Selma, the company’s head grower, told the AP, “We do a full test, microbial, cannabinoid, terpene, as well as yeast and anaerobic bacteria, heavy metals as well. So it’s very, very controlled.”

Village Farms International (NASDAQ: VFF), operating through its Leli Holland subsidiary, is among the licensed cultivators. The company completed its first harvest in December and began deliveries in early 2025, according to a company news release.

The experiment will be evaluated after four years to assess impacts on crime, safety and public health, Dutch government officials have said.

“It is also a great opportunity to see how cooperation within the closed chain between legal growers, coffeeshop owners and all other authorities involved works,” Breda Mayor Paul Depla told the AP.

Despite pioneering cannabis decriminalization in the 1970s, the Netherlands has grown more conservative in recent years, compared to the federally-legal Canadian market and various U.S. state markets, which are now laden with more egalitarian hemp operators. Amsterdam has even been closing coffee shops and restricting cannabis use in some historic areas.

The Dutch legal market generated revenue of $64.1 million in 2023 and is expected to grow substantially, with market analysis firm Grand View Research projecting it to reach $337.5 million by 2030, representing a compound annual growth rate of 26.8% from 2024 to 2030.