Put this in your 420 pipe and smoke it: The cannabis industry could become disjointed if the Iran war continues.
Insiders in the bud biz are watching the Middle East conflict closely, as it affects the availability of certain products crucial to cannabis.
Josh Kesselman, the CEO of RAW Rolling Papers and the publisher of High Times magazine, tells JS that the conflict has caused rolling machine prices to increase by 50% due to a lack of materials.
“And some of our favorite filters (like the original cotton ones) are made in Lebanon, where production is now indefinitely suspended,” he lamented.
Although this added cost might affect consumers on 420, the unofficial hashish holiday devoted to all things cannabis, Kesselman said that the price of plastic tubes used on pre-rolls has doubled, “so that might raise the cost of pre-rolls by about 10 cents.”
Inesa Ponomariovaite, CEO of the wellness company Nesa’s Hemp, told JS that the conflict has begun to affect her business by raising costs across her supply chain.
“For instance, we rely on specialized transportation services to move our extracts to co-manufacturers and our products to fulfillment centers, and these costs have increased in line with higher fuel prices,” she said.
She pointed to an ingredient known as nigella sativa that is used in the company’s powder product, and said “what we learned amidst this world chaos is that USA suppliers source this ingredient internationally.”
That means higher prices for her business, though she insists she’s doing everything she can to avoid passing them on to consumers.
But the Iran war is affecting cannabis insiders in other ways than just the supply chain, according to Chris Fontes, CEO of the High Spirits brand of cannabis beverages.
He said that the war “is eating up a lot of Congress’s attention,” but that makes it hard to get anything else done.
“Arguably, nothing else is as important as the Iran War right now,” he said. “So for us in the hemp industry, we’re at a desperate, time-related crunch. It’s causing significant issues in getting legislation passed needed to stop the hemp ban in November.”
The bill, set to take effect in November, outlaws certain synthetic cannabinoid products derived from hemp, a cousin to cannabis sativa, aka marijuana.
Fontes said the language in the bill “changes the definition of hemp in such a restrictive way that no single product could actually be created.”
Brett Harris, CEO of LuvBuds, which distributes cannabis accessories and smoke shop supplies, said any international conflict “can create ripple effects across global supply chains, fuel costs and transportation,” but there are other things to consider.
“The impact is less about the headlines and more about what follows: higher freight, higher factory pressure, and tighter margins across the board,” he said.
Harris said his business sources heavily from China and India, “so when production or logistics costs rise there, we feel it here.”
However, he said he and fellow importers are fighting “to keep those increases from reaching the shelf.”
“Our job is to slow that snowball down. We negotiate hard, use our scale, and absorb what we can so the customer does not feel every shock immediately. Nobody wants to watch a $12 item quietly become a $15 item just because the world got more expensive.”
Thomas Winstanley, executive vice president at Edibles.com, said any impact from the current conflict “will likely build over time rather than hit all at once.”
He said the most immediate pressure point is fertilizer, which “is one of the largest input costs for American farmers.”
Winstanley predicts prices will rise if the war continues, especially since higher energy prices create “the potential for longer-term cost inflation across the supply chain, which could ultimately translate into higher prices for consumers.”
Ali Garawi of Muha Meds said the war is making the vendors who handle packaging and hardware for the cannabis industry “already nervous,” since “pricing is less predictable and everyone is trying to hedge risk at once.”
