Cannabis Vape Companies Face Safety Concerns Amid Rising Tariffs

Major cannabis vape companies are shifting their manufacturing operations away from China due to increasing tariffs that could pose safety risks for consumers.

Rising Tariffs and Industry Impact
The U.S. imposed a 25% tariff on vape products made in China back in 2018, during President Trump’s administration. This move pushed many cannabis vape companies to explore alternative manufacturing locations. Now, with additional tariffs bringing the total to 45%, industry leaders fear that some operators may resort to buying cheaper, lower-quality vape cartridges to offset costs — potentially putting consumer safety at risk.

Moving Manufacturing Operations
For many companies, relocating production has been a complex and lengthy process. Shenzhen, China, has long been the global hub for vape hardware manufacturing, but businesses are now turning to other regions like Malaysia and Indonesia.

– Pax: San Francisco-based Pax has shifted some production to Malaysia while still manufacturing pods, batteries, and all-in-one devices in China.
– Ispire Technology: Based in Los Angeles, Ispire diversified its manufacturing, with about one-third of its production now in Malaysia. The company is also building a second factory in Malaysia capable of handling 70 production lines, including cannabis vape products.
– Active (formerly Advanced Vapor Devices) and CCell have also expanded operations to Southeast Asia to reduce tariff-related costs.

Shipping Challenges
Shipping remains a critical factor in controlling costs. While some cannabis vape companies are transitioning to shipping by cargo ships to save money, many still rely on air freight for quicker delivery. Shipping by air is more expensive, but smaller operators often rely on it due to limited forecasting capabilities.

Industry leaders stress that better planning can save cannabis companies up to 70% on shipping costs. Larger operators typically have more structured forecasting strategies, while smaller businesses must rely on creativity, agility, and innovation to stay competitive.

Safety Concerns in the Vape Market
A growing concern is that cash-strapped businesses may purchase low-quality vape components to keep costs down. This raises potential safety risks for consumers. Industry experts urge cannabis operators to request key safety documentation from hardware suppliers, including:

– Heavy metal testing
– BPA testing
– Proof that harmful contaminants are not leaching into cannabis oil when heated

Proper testing protocols and shelf-stability assessments are vital to ensure consumer safety, especially as lower-cost products enter the market.

Looking Ahead
As cannabis vape companies navigate these challenges, maintaining quality and safety standards remains crucial. By choosing trusted suppliers, investing in proper testing, and improving logistics planning, businesses can protect both their bottom line and their consumers’ well-being.

This is also why it’s crucial for cannabis businesses to have the right insurance in place. Proper coverage can help mitigate financial risks tied to product safety, recalls, and potential liabilities.