Trump’s 50 % India Tariff Threatens Cannabis Pre‑Roll Cones
A 50 % Indian tariff could upend cost structures across cannabis pre-rolls
The Stealth Squeeze on Cannabis Margins
In a commodity market with razor-thin margins, pre-rolls have emerged as a rare bright spot: scalable, consumer-friendly, and high volume. Yet President Trump’s new 50 percent tariff on imports from India now threatens to undercut that growth by inflating the cost of one of the cannabis industry’s most essential inputs: pre-rolled cones. Because India supplies roughly half of the world’s cones, the tariff—on top of existing pressure on costs of goods sold—could drive cost shocks across brands, disrupt supply chains, and force hard choices between absorbing, passing, or restructuring.
Why Pre-Rolls Matter
Pre-rolls have become central to the cannabis product mix. According to Headset, the U.S. pre-roll category recorded $2.3 billion in sales last year. Growth in the segment has outpaced broader cannabis industry averages: Headset’s pre-rolls report noted a 13.4 percent U.S. growth in one recent year, and in Canada nearly 36.5 percent growth. Custom Cones—working with Headset data—further estimates that from January 2023 through mid-2024 the pre-roll market generated over $4.1 billion and sold over 394 million units. Those figures reflect how pre-rolls now command approximately 15.9 percent of market share in many tracked jurisdictions. The category’s hallmarks are convenience and brand differentiation. Consumers increasingly view pre-rolls as a turnkey product, bypassing the need for grinding, rolling, or accessory purchase. Multipacks—bundling multiple joints—have become popular: in some markets they approach 50 percent of pre-roll sales by count or revenue.
What the Cone Supply Chain Looks Like
A pre-roll—simple as it seems—depends on several inputs: the cone paper, filter or tip, printing or branding, packaging, and final finishing. The cone is especially critical and often delicate in design, with details like paper weight, seam, burn rate, and branding all shaping the end product. Globally, India is the dominant producer of pre-rolled cones, responsible for around 50 percent of supply. Indonesia is another major player. China also contributes, though its output is often viewed as lower quality or inconsistent. Because many cannabis firms rely on custom-branded cones for differentiation, supplier switching is nontrivial. The pre-roll supply chain remains shallow: a few large producers in India and Indonesia, a handful of branding vendors, and domestic finishing. This concentration creates risk when disruption strikes.
The Tariff Shock Hits Hard
Trump’s newly imposed 50 percent tariff covers imports from India, including pre-rolled cones and related accessory inputs. The declared value of cones from India now faces a 50 percent duty, effectively hiking landed costs before other expenses. Industry sources estimate that a cone’s base cost ranges from 3 to 8 cents. For a five-pack multipack, the added tariff could increase costs of goods sold by 8 to 20 cents. With cannabis markups often running two to three times, retail prices could rise by 20 to 60 cents. In markets where pre-rolls already retail for about a dollar, a 10–20 cent increase is significant. Margins on low-price SKUs are thin, and many brands compete on volume.
Customs Friction and Real-World Delays
Beyond higher costs, the tariff creates new friction points. Customs inspections and delays have increased. Companies may misclassify goods or under-invoice to reduce duties, risking penalties or seizures. Declared values come under scrutiny, adding audit risk. Prepaying duties strains cash flow, and firms may stockpile inventory before tariffs fully hit, raising warehouse costs. A real-world example: shipments of specialized tips from RollPros faced customs delays due to reclassification. Though not Indian in origin, the scrutiny illustrates broader pressures. These operational frictions hit small and midsized firms especially hard.
How Cannabis Companies Are Reacting
Facing rising costs, cannabis firms are choosing between absorbing tariffs, raising prices, switching suppliers, or changing production methods. Some well-capitalized companies may absorb the cost to stay competitive, but that hurts margins. Others are raising prices, but that risks pushback in price-sensitive markets. Premium SKUs may have more flexibility, but value-tier products are vulnerable. Some firms are turning to alternate sourcing—Indonesia, Malaysia, even Latin America—but few offer India’s combination of volume and customization. Quality concerns and tariff issues complicate Chinese sourcing. Material substitutions, such as simplified cones or blank stock, are being tested but may weaken brand identity. Supplier switching is risky, and changes to paper feel or burn characteristics could erode consumer trust.
The Onshoring Gamble
A growing number of companies are exploring onshoring. Custom Cones USA is experimenting with domestic cone-rolling machines. The company has already shifted plastic tube production to the U.S. to cut shipping delays. Other firms are evaluating making tips and tooling stateside to avoid tariff swings. Still, onshoring comes with steep barriers: higher labor costs, longer ramp-up timelines, complex equipment, and limited local expertise. Replicating the quality of Indian-made, hand-finished cones in the U.S. could double or triple per-unit costs, especially at scale. The idea is gaining traction, but it's far from a short-term fix.
Mitigating the Risk
Some companies are moving fast to audit their supply chains and reduce exposure. That includes improving traceability of product origin and tariff codes, spreading sourcing across multiple regions, and leveraging customs strategies like bonded warehouses or duty drawbacks. Firms may also petition regulators for tariff relief or exclusions. But these mitigation efforts require experience and money, and smaller operators often lack both. Inventory buffers and supplier renegotiations may help, but they don't eliminate the volatility.
Not All States Will Feel It Equally
The tariff’s impact will vary widely by state. In high-cost states or those with price-insensitive consumers, firms may pass along the cost more easily. In price-sensitive markets or states flooded with competition, absorbing or passing through the cost becomes harder. Large multi-state operators can likely weather the storm better than small, local brands. Some states may see product retraction or SKU reduction as producers cut low-margin lines. Proximity to import hubs may also matter: regions closer to ports may have lower freight costs and fewer distribution hurdles.
Bigger Picture: Trade Policy and Political Uncertainty
The 50 percent tariff may not be permanent. It could be reversed, challenged, or softened by future administrations. U.S.–India relations are dynamic, and cannabis is increasingly a factor in trade conversations. If tariffs extend to other cannabis inputs—packaging, filters, branding materials—the problem multiplies. Cannabis is especially vulnerable due to its complex, regulated nature and its reliance on imported accessories. Trade policy is not stable, and unpredictability discourages long-term investment. That unpredictability forces cannabis firms to make decisions without knowing whether today's pain will last.
Time to Adapt or Get Squeezed Out
Trump’s 50 percent tariff on Indian imports lands squarely on one of cannabis’s fastest-growing product lines. With cones as a core input and India supplying roughly half the global stock, this single policy change ripples across pricing, margins, sourcing, and strategy. Cannabis brands must adapt now—either by absorbing costs, diversifying suppliers, onshoring production, or redesigning product strategies. None of these options are easy. Onshoring is expensive. Alternatives are unreliable. Trade policy may flip at any moment. But one thing is clear: without swift, strategic adaptation, the cone tariff could quietly crush one of the most promising segments in legal weed.
***
Cigaweeds is the ultimate choice for discreet and convenient cannabis prerolls. Made with premium flower and natural hemp tips, our prerolls deliver a smooth and satisfying smoke every time. Whether you prefer indica, sativa, or hybrid strains, we have something for you. Our products are lab-tested and compliant with state regulations, ensuring quality and safety. You can find our prerolls at select retailers across Arizona, or order online and get them delivered to your door. Cigaweeds also collaborates with High Grade, a leading cultivator of exotic and rare cannabis strains, to bring you exclusive and limited-edition prerolls that will blow your mind.
Visit our website to learn more about our strains, our blog, and our store.
Follow us on Instagram to stay updated on the latest news and promotions.
