Good morning. It’s Tuesday. Today we’ll look at how the Trump administration’s tariffs are affecting the cannabis industry in New York. We’ll also get details on why a city child care program may collapse if the State Legislature does not come up with additional funding.
You might not expect to hear state officials who regulate the legal cannabis industry in New York discuss the Trump administration’s tariff policy, but my colleague Ashley Southall did. She writes that those officials, and many cannabis growers and retailers, are worried about the administration’s tariff on goods from China.
The Trump administration’s 20 percent tariff on items imported from China — added to an already existing 25 percent levy on imported agricultural products and supplies used by the legal marijuana industry — is driving up prices for farmers, manufacturers and retailers just as the cost of legal weed is coming down.
State regulators are watching. “Anything that might implicate the way cannabis consumers budget for or prioritize cannabis spending will have a real impact on our industry,” John Kagia, the policy director of the Office of Cannabis Management, said last week during a meeting of the agency’s oversight board.
Some retailers say the tariffs have put them in a desperate bind.
“We’re going into the season knowing that we are going to lose money,” said Karli Hornick-Miller, co-founder and chief executive of Florist Farms in Cortlandt, N.Y., which grows cannabis and sells marijuana, prerolled joints, and gummies, along with vape pens and cartridges.
Cannabis has helped keep her larger vegetable farm going — the margins are dollars in cannabis and pennies in vegetables, she said. “If we were just a vegetable farm, we would be going out of business,” she said.
The tariffs are putting pressure on an industry in which financial capital is limited because the federal government considers it illegal. Few banks will make loans to cannabis companies, and they cannot claim most tax write-offs. Cannabis businesses also face continuing competition from illicit sellers, despite an enforcement crackdown intended to help licensed retailers. New York City’s effort to snuff out unlicensed shops got a boost last week after a federal judge ruled that the closings were legal.
It’s not that the tariffs are driving up the cost of cannabis itself. Retailers in the state are allowed to sell only weed that was grown in New York, not products from elsewhere. But the tariffs have added to the prices of necessities like the compost that farmers add to the soil, dome-shaped “hoop houses” that protect outdoor cannabis crops and the metal tins used to package prerolled joints and edibles.
Vape makers are especially vulnerable to the tariffs. Nicolas Guarino, co-founder and chief executive of Jaunty, which makes the state’s top-selling brand of cannabis vapes, said that the cost of hardware for a single vape had climbed 22 percent, to $5. The company’s next quarterly hardware order totaled about $240,000, compared with $200,000 without the tariffs, he added.
Peter Machalek, the chief revenue officer at Green Tank Technologies, a manufacturer in Toronto that supplies Jaunty’s vape hardware, said the devices were made in China from 16 to 20 components, including the battery, the oil reservoir, the plastic mouthpiece and the ceramic atomizer. Machalek said that even if manufacturers switched to countries like Malaysia that the new tariffs do not cover, some of the components would still need to come from China. “There’s no escaping it,” he said.
Guarino said the tariffs hurt businesses that play by the rules, extending the advantage that the illicit market already has. The tariffs put pressure on vape makers to switch to lower-quality hardware and to cut corners with testing, which could compromise consumer safety, he said.
“Generally, the impact is going to be lesser-quality products for consumers because the high-quality supply chains that are established have become too expensive, and people want the price to come down,” he said. The result, he added, is that consumers who use vapes may end up inhaling toxic amounts of heavy metals like cadmium and mercury.
The cannabis industry is also concerned about what the Trump administration’s crackdown on immigration will mean for cannabis farms and foreign investors. Federal immigration agents visited Hepworth Farms last week and served the owners with a subpoena for payroll records. Gail Hepworth, who runs the 207-year-old farm with her twin sister, Amy, said they decided to turn over the records after meeting with their undocumented workers.
“They all said whatever happens, they’re ready,” she said.
Weather
Expect a sunny sky with the temperature reaching into the high 50s. In the evening, there will be a chance of rain and snow, with a low around 40.
ALTERNATE-SIDE PARKING
In effect until March 31 (Eid al-Fitr).
The latest New York news
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A city child care program could soon collapse
Child care vouchers for low-income families have long been a lifeline as New York City’s affordability crisis has worsened and the cost of day care for infants and toddlers has ballooned.
My colleague Alyce McFadden writes that the vouchers may vanish unless state lawmakers move to fund the program.
The vouchers are issued by the city’s Administration for Children’s Services, but the city relies on state funding to cover much of the cost. The program already faces a funding gap for the current fiscal year, and the agency needs an additional $1 billion in state funding to continue to provide vouchers to the 62,000 recipients who have signed up, according to Jess Dannhauser, the A.C.S. commissioner.
In January, Gov. Kathy Hochul, a Democrat, released her executive budget, which included no additional funding for child care subsidies. Nor did the State Senate’s version, released a few weeks ago. The State Assembly’s proposal included roughly $213 million for child care assistance statewide, far less than what A.C.S. says is needed to maintain its current caseload.
The cost of child care has put an impossible strain on working parents of young children in the city, where the average cost of enrollment in center-based care was $26,000 last year, according to an analysis by the city comptroller, Brad Lander. That figure represents a 43 percent increase since 2019.
To afford child care for a 2-year-old, a family needs to earn at least $334,000 a year, Lander’s report said. The median income for a family of three in the New York City region was $139,800 in 2024, according to city data.
Erika Reyes, a mother of two in Brooklyn, said A.C.S. vouchers had enabled her to keep her job as a discharge planner at NewYork-Presbyterian Hospital. Without vouchers, the burden of paying for care for her 1-year-old would be overwhelming — akin to a second rent payment, she said.
“How am I going to manage paying that, paying rent, paying food?” she asked. “And then on top of that, bills and electricity, cable, their clothes. I mean, I have two kids, so it’s a lot.”
METROPOLITAN diary
Getting a grip
Dear Diary:
I was standing in a crowded subway car at rush hour. It was a speedy express that jostled those of us who were standing, forcing us to grab on to whatever post or overhead bar we could grab.
I am over 6 feet tall, so it was easy enough for me to reach the bar above me with my left arm. A woman who was significantly shorter and standing next to me had nothing to hold on to and kept losing her balance.
“If you’d like, you can hold on to my arm,” I said.
Without a word she gripped my right arm at the elbow.
“Don’t tell my wife,” I said, trying to put her at ease.
“Don’t tell my husband,” she said.
We rode in comfortable silence for the next several minutes, got off at the same stop and never said another word to each other.
— Leonard Orr
Illustrated by Agnes Lee. Send submissions here and read more Metropolitan Diary here.
Glad we could get together here. See you tomorrow. — J.B.
P.S. Here’s today’s Mini Crossword and Spelling Bee. You can find all our puzzles here.
Stefano Montali and Ed Shanahan contributed to New York Today. You can reach the team at [email protected].
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The post Why Tariffs Are Hurting N.Y.’s Cannabis Industry appeared first on New York Times.
