The Trump administration has included vaping devices and their components among the Chinese products subject to punitive tariffs, and that's going to have an impact on the marijuana industry. But it's not just vaping devices: Many other products made in China, from fixtures to packaging materials and more that are used in the pot industry, are also subject to increased tariffs.

The bottom line will be increased costs for legal marijuana companies and increased prices for their customers. To the degree that tariffs subdue growth in legal marijuana markets, they could also end up putting a hit on marijuana tax revenues for states and localities.

Companies selling vaping products are on the front line, said Arnaud Dumas de Rauly, co-CEO of the Blinc Group, which develops and sells technology and products related to vaping and runs an incubator program to research, develop, and brand technologies for marijuana and nicotine vaping. Dumas de Rauly made his comments in July 24 testimony at public hearings on the tariffs held by the Office of the U.S. Trade Representative.

The vast majority of vaping devices, as well as batteries, filters, and cartridges, are manufactured in China, Dumas de Rauly noted, and there are currently few alternatives for producing them. But the profit margin on such devices is only 10 to 15 percent, and that means companies will either have to find alternative sources, eat the hit to their bottom lines, or, more likely, pass the increases on to consumers.

And that will have an impact on the "entire cannabis consumption market -- including medical and recreational marijuana," Dumas de Rauly said.

It's not just consumers who will feel the impact, Dumas de Rauly warned. Higher prices mean decreasing sales and shrinking tax revenues and "25 percent of sales come from cannabis vaping products," he said.

The business press, which now actually treats the marijuana business as a real industry, found plenty of people who echoed Dumas de Rauly's sentiments. In an interview with Forbes, Brooke Davies, executive director of Cannabis Organization of Retail Establishments, a non-profit trade association representing cannabis retailers in Washington State, said that tariffs were already having an impact. Small growers there, already under pressure from dropping marijuana prices, will see profit margins shrink even further because the glass jars they buy from China to package their buds are being hit by tariffs.

"The Trump tariffs will undoubtedly hurt the rural parts of Washington State," Greg James, publisher of Marijuana Venture and Sun Grower magazines, told Forbes. "There could well be a snowball effect that results in the outdoor growing community having an even harder time selling their crop," he said.

It's not just growers or vaping companies taking a hit. "Any items essential to the day-to-day operations of a cannabis business, from construction equipment to cell phones, will likely increase in price," Kevin Hagan of the Princeton Public Affairs Group told Forbes.

Meanwhile, CNBC reported that unlike other sectors targeted for tariffs, such as imported steel, aluminum, solar panels, and washing machines, whose impacts are slower to show up (how often do you buy a washing machine?), the tariffs on vaping products will have an almost immediate impact. That means consumers will quickly see price increases and adjust their behavior accordingly.

But for some people -- medical marijuana patients -- marijuana isn't a luxury, but a necessity.

"For those who need it, they don't have a choice," Mary Lovely, a professor of economics at Syracuse University and nonresident senior fellow at the Peterson Institute for International Economics in Washington, D.C., told CNBC.

Maybe they can comfort themselves by reading Donald Trump's tweets. As he exclaimed in a tweet the same day as the Office of U.S. Trade Representative hearings, "Tariffs are the greatest!... All will be Great!"

This article was produced by Drug Reporter, a project of the Independent Media Institute.

California is on track to generate $1.9 billion in legal marijuana sales this year, according to new data from a financial analysis firm tracking the market. That's a lot of weed, but it's only half the amount the same firm previously estimated the state would rake in.

The estimates are from New Frontier Data, which crunches cannabis industry numbers, and are based on tax revenues from pot sales, which so far have fallen dramatically short of projections. According to New Frontier, the state collected $33.6 million in pot taxes between January 1 and March 31, which makes it extremely unlikely that tax revenues will meet original expectations of hitting $175 million in the first half of the year.

New Frontier had earlier estimated that the state would see $3.8 billion in marijuana sales this year, and this latest estimate slashes that number by a whopping 50%. The company also slashed its projections for the size of the legal industry by 2025. Instead of the $6.7 billion in sales it earlier estimated, it now says it thinks sales will only hit $4.7 billion, a hefty one-third reduction.

That's bad news not only for state tax revenues but also for an industry that is supposed to be coming in out of the cold. What happened? New Frontier has an idea.

"It is quite clear that the new adult use regulations have made it more difficult than anticipated for the legal market to get established and for consumers to transition to from the illicit market. Given the number of local government bans on cannabis businesses, we are not seeing the same kind of conversion rates that we have seen in other legal markets," said Giadha Aguirre De Carcer, New Frontier Data founder, and CEO.

State and local licensing fees for marijuana businesses can range from $5,000 to $120,000 per year, depending on the type and scope of the business. And complying with regulatory mandates, such as those around zoning, water usage, and lab testing, costs even more.

It's not just onerous -- and expensive -- regulation for those who want state licenses to grow, distribute, and sell marijuana that's the problem. There's also a serious lack of buy-in by a good portion of the state's cities and counties, and that means that a big hunk of the state has no access to local legal marijuana.

"If there's (no governmental support) locally, then there's no option for a state license, and that's why most people are being shut out at this point in time," California Cannabis Industry Association executive director Lindsay Robinson told the Marijuana Business Daily. "The process gave local authorities an option to kind of sit on their hands, and that's the biggest barrier that we're seeing."

According to CCIA spokeswoman Amy Jenkins, only about a third of the state's 540 local governmental entities have approved commercial marijuana activity. Lack of legal access is "forcing consumers to turn to the illicit market," she told the Los Angeles Times this week.

Or return to it. Or stay in it, if they never left. Humboldt State University economics professor Erick Eschker pegged the size of the state's pot market -- legal and illegal -- at about $7.8 billion. Of that, about $2.3 billion came from the medical marijuana market, leaving about $5.5 billion for legal, grey market, and black market pot sales. If the legal market is only accounting for $1.9 billion in sales, that suggests that grey and black market sales are still about twice the size of legal sales. These consumers don't get hit with stiff sales and excise taxes, and if they can still get it from the guy down the street, why pay those high, state-legal prices?

If California wants to eliminate the black market in marijuana, it's got a whole lot of work to do. And no matter what steps the state takes to deal with its internal black market, there's still the export black market to the non-legal states in the rest of the US. Ultimately, the only way to end the black market is to legalize it nationwide, but we're not quite there yet. In the meantime, California's transition to a legal marijuana regime is facing some unhappy realities.

Canada's Liberal Party formally endorses drug decriminalization (although Justin Trudeau is keeping his distance), the State Department cites continuing human rights concerns in the Philippines drug war, a Utah medical marijuana initiative appears set to make the November ballot, and more.

Marijuana Policy

Kirsten Gillibrand Says Time to Legalize Marijuana, Calls on Sessions to Meet With People Busted for Pot. The junior senator from New York and potential Democratic presidential contender said Sunday the time has come to legalize marijuana and that she had sent a letter to Attorney General Jeff Sessions inviting him to discuss the impact of the drug war with New Yorkers who have been denied jobs, housing, and college financial aid because of non-violent drug crimes. She also called on Sessions to reinstate the Cole memo, the Obama administration's policy of largely leaving state-legal marijuana alone.

Idaho Democratic Gubernatorial Contenders Split on Marijuana Policy. One Democrat running for governor wants to legalize marijuana; the other does not. In a Sunday night debate on Idaho Public Television, contender Paulette Jordan said she fully supports legalization and cited the tax benefits for the state. Boise businessman AJ Balukoff, who is also seeking the nomination, disagreed. He said he is opposed to the substance and believes medical marijuana needs to be properly tested. Idaho is one of four states in the country that has not passed any form of marijuana law reform, not even a CBD medical marijuana law.

Albuquerque Decriminalization Went into Effect on 4/20. New Mexico's largest city has now decriminalized the possession of less than an ounce of marijuana. The change went into effect last Friday after a measure was passed by the city council and signed by Mayor Tim Keller. Possession remains a crime under state and federal law.

Medical Marijuana

Utah Initiative Appears Set to Qualify for November Ballot. A medical marijuana initiative from the Utah Patients Coalition looks very likely to qualify for the November ballot. While it won't be official until May 15, petitioners appear to have met the overall signature requirement, with 145,000 registered voter signatures in hand, well above the 113,000 required. But the initiative also must meet specific signature thresholds in each of the state's 29 state Senate districts. As of last Friday, they had done so in 26 of them.

Foreign Policy

State Department Says Drug War Killings Remain Top Philippines Human Rights Concern. In its global rights report for 2017, the State Department said drug war killings and rising police impunity remain the top human rights concerns in the Philippines. "Extrajudicial killings have been the chief human rights concern in the country for many years and, after a sharp rise with the onset of the antidrug campaign in 2016, they continued in 2017,"reads the report released Friday (Washington time). The report also expressed doubt and uncertainty over Filipino government reports on the killings. "Police claimed to have begun investigations of all reports of extrajudicial killings,"the report read in part. "Some civil society organizations accused police of planting evidence, tampering with crime scenes, unlawfully disposing of the bodies of drug suspects, and other actions to cover up extrajudicial killings,"it added.

International

Canadian Liberals Formally Endorse Drug Decriminalization, Trudeau Demurs. Canada's governing Liberal Party endorsed the decriminalization of the possession of all drugs at its national convention Saturday. But party policy isn't necessarily government policy, and party leader Prime Minister Justin Trudeau has distanced himself from the decriminalization plank. Drug decriminalization, as well as the decriminalization of sex work and proposals to reform health care, which the party also approved, are seen as bolstering the Liberals' odds against the New Democrats, who traditionally attack them from the left.

(This article was prepared by StoptheDrugWar.org's 501(c)(4) lobbying nonprofit, the Drug Reform Coordination Network, which also pays the cost of maintaining this web site. DRCNet Foundation takes no positions on candidates for public office, in compliance with section 501(c)(3) of the Internal Revenue Code, and does not pay for reporting that could be interpreted or misinterpreted as doing so.)

The president makes downright scary remarks about killing drug dealers, the Brazilian army and cops roar into Rio's favelas, California's Democratic Party reaffirms its support of legal pot, and more.

Marijuana Policy

Arizona Legalization Bill Snuffed Out. A bill that would have legalized marijuana in the state was snuffed out last week by House Judiciary and Public Safety Committee Chairman Eddie Farnswoth (R-Chandler). The measure, House Concurrent Resolution 2037 would, if passed, have put the issue directly before voters in a referendum.

California Democrats Reaffirm Commitment to Legal Marijuana, Diss Anti-Pot Feinstein. Meeting over the weekend, the California Democratic Party approved numerous platform planks in support of marijuana legalization, including one that says they "support the ongoing legalization, regulation, and taxation of cannabis in a manner similar to that of tobacco or alcohol, while prioritizing the health, education, and safety of California's communities and the country over revenue or profits." In other action, the state party failed to provide its endorsement to Sen. Diane Feinstein, who has lagged far behind other state Democrats when it comes to marijuana policy.

Maine Legalization Implementation Bill Kills Off Social Clubs, Tax Revenue Sharing. The Marijuana Legalization Implementation Committee took a final vote on the overhauled implementation bill Friday. The final version of the bill contains no provision for marijuana social clubs, nor does it allow for the sharing of marijuana tax revenues to the state with localities that allow marijuana businesses. The excise tax on wholesale marijuana is set at 21.5%, or about $335 a pound at current prices. The measure will go before the whole legislature in a few weeks.

Ohio Legalization Initiative Could Be Delayed to 2019 or 2020. At a press conference last Friday, Cincinnati businessman Jimmy Gould, the man behind the failed 2015 "monopoly marijuana" legalization initiative, said his plans to get another initiative on the ballot may not come to fruition this year. He said language for the proposed measure was not yet set and the initiative may not appear on the ballot until 2019 or 2020. The deadline to hand in enough vote signatures to qualify for the ballot this year is July 4.

Medical Marijuana

Idaho CBD Medical Marijuana Bill Advances. The House Health and Welfare Committee has approved House Bill 577, which would legalize the possession of low-THC CBD oil for medical use. The bill advanced despite the opposition of law enforcement and the Idaho Office of Drug Policy. It now heads for a House floor vote.

Sentencing

Trump Says He Wants to Execute All Drug Dealers. President Trump has been making some disturbing authoritarian and blood-thirsty private remarks about what he'd like to do to drug dealers, according to a new report from Axios. Worse yet, his dark fulminations may foreshadow some repressive policy prescriptions not too far down the road. Trump seems obsessed with fighting drugs, according to the Axios report. It cites five sources who've spoken with Trump on the subject who say "he often leaps into a passionate speech about how drug dealers are as bad as serial killers and should all get the death penalty" and that softer approaches to drug reform will never work.

Arizona Bill Would Impose Mandatory Minimums on First Time Heroin, Fentanyl Sellers. A bill that would create five-year mandatory minimum sentences for first-time heroin and fentanyl sellers passed the House last week. House Bill 2241 now heads to the Senate.

International

Brazilian Army, Rio de Janeiro Cops in Massive Anti-Drug Operation. The army and the state police have launched a massive anti-drug operation in several favelas (shantytowns) on the west side of the city, military spokesmen announced last Friday. More than 3,000 soldiers and police are taking part in the operations in Vila Alianca, Coreija, and Vila Kennedy. In the latter, there have been at least 13 shoot outs between drug traffickers and police since January. The operation started just days after an army sergeant and police commander were killed there last week.

Colombia Coca-Country Clashes Are Creating Refugee Flows. Three-way fighting between rightist paramilitaries, leftist ELN guerrillas, and the Colombian military in the coca-rich Bajo Cauca region some 80 miles north of Medellin has displaced some 1,500 people already, with the prospect of more to come. "The clashes between the armed groups continue to cause fear amongst the indigenous communities and rural populations," said the Norwegian Refugee Council, which is assisting victims of the violence.

Manila Demonstrators Protest Philippines Drug War. Thousands of marchers organized by Catholic groups took to the streets of Manila Saturday in a "walk for life" to protest the thousands of killings that have occurred under President Rodrigo Duterte's bloody crackdown on drugs. "We will not tire in walking for life even if the path ahead is winding and soaked in blood," Cardinal Luis Antonio Tagle.

Philippines Police Kill Ten in Night of Bloody Drug Raids. In the single bloodiest night of the country's drug war since police resumed participation in December, police said they killed 10 suspected drug dealers and arrested 63 more last Wednesday night. The operations took place in Bulacan, north of Manila, the capital. Police said the suspects were killed in eight separate towns during 45 "buy-bust" incidents.