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Major cannabis vaporizer companies are increasingly moving manufacturing operations away from China, primarily due to a 20% tariff implemented by the Trump Administration.
Industry leaders are concerned that the price pressures resulting from these tariffs – now totaling 45% for Chinese-manufactured goods – may drive some operators to purchase lower-quality vape cartridges and components, potentially endangering consumer health.
Executives from U.S.-based vape companies report that finding or establishing new manufacturing operations has been a multi-year process that's gaining renewed urgency because of the recent tariffs.
While Shenzhen, China, remains a primary manufacturing center located near Hong Kong's financial and shipping infrastructure, the region's dominance in global vape hardware production is gradually diminishing.
In March 2018, during President Trump's first term, his administration applied $50 billion in tariffs to Chinese goods, including a 25% tariff on vape products from China.
This initial move prompted many U.S. companies to explore alternative manufacturing locations. Some executives report they absorbed these price increases because cannabis industry customers were already struggling with heavy regulations and taxes.
San Francisco-based vape company Pax chose to absorb the impact of those tariffs into their cost of doing business to keep prices as low as possible for consumers. The company reports that the significant 25% tariff was what catalyzed their interest in moving manufacturing out of China.
Currently, Pax manufactures its Pods and batteries in China, while other products, such as the brand's all-in-one vape device made from ocean-bound plastics, are produced in Malaysia.
Ispire Technology, the Los Angeles-based cannabis division of e-cigarette company Aspire, has also diversified its manufacturing, with approximately one-third of products completed on company manufacturing lines in Malaysia.
Ispire is currently constructing a second factory in Malaysia capable of supporting 70 production lines, with some dedicated specifically to cannabis vape products.
During Trump's first term, all of Ispire's manufacturing was based in China, but increasing discussions about trade wars and tariffs prompted executives to reconsider their strategy.
Ispire's leadership determined that regardless of which administration controlled the White House, the geopolitical situation had fundamentally changed and would not revert. This belief was reinforced when the Biden administration continued the tariff approach to China established under President Trump.
When looking for a manufacturing base with less geopolitical risk, Ispire selected Malaysia due to its proximity to Singapore – another financial and shipping powerhouse similar to Hong Kong.
Industry analysts observe that the governments of Malaysia and Singapore are working to establish a manufacturing and shipping collaboration similar to the successful model between Shenzhen and Hong Kong, with promising early results.
While manufacturing in Malaysia was initially slightly more expensive than in China, the new 2025 tariffs on Chinese products – a 10% tariff announced on February 1, followed by another 10% tariff last week – could help balance the total cost of goods.
Douglas Fischer, general counsel at vape company Active (formerly known as Advanced Vapor Devices), which produces various vape cartridges, all-in-one vape devices, and batteries, emphasized that China will remain a significant part of the vaporizer supply chain. Many essential vape components still come from China, including ceramics, circuit boards, heating elements, and borosilicate – a heat-resistant glass used in vape cartridges.
Research indicates that shipping costs from China are comparable to those from Southeast Asian countries, including Indonesia, where some vape manufacturers have established operations.
Indonesia has experienced significant economic growth in recent years, with substantial investments in infrastructure to support international shipping and trade operations.
While Hong Kong and Singapore are established port cities, industry data shows that a considerable portion of vape inventory arrives in the U.S. via air freight rather than cargo ships.
The high volume of vapes transported to the U.S. by air highlights a critical need for improved forecasting by domestic cannabis operators – particularly smaller vape manufacturers and retailers.
Multi-state operators (MSOs) typically employ a more systematic approach to business, with emphasis on forecasting, planning, and operational efficiency to reduce costs. Companies can achieve up to 60% savings on shipping expenses by utilizing cargo ships instead of air deliveries, though this requires more extensive advance planning.
Smaller operations often gain competitive advantage through creativity, speed, and quicker adoption of new technologies. However, many fail to dedicate sufficient resources to logistics planning, particularly shipping cost management, which frequently results in supply chain disruptions and inventory shortages.
With already thin margins in the cannabis industry, cost increases will likely transfer to consumers. This economic pressure could accelerate the consolidation of the market as brands unable to manage these additional costs exit the industry.
Several vape executives expressed concerns that the new tariffs on Chinese imports could drive U.S. companies to purchase lower-quality materials to maintain stable costs.
Such actions, they worry, might compromise consumer health.
Many quality-focused vape companies prioritize product safety and avoid cutting corners, resulting in higher prices compared to low-cost alternatives available from overseas marketplaces. Industry advocates express concern that as vape cartridge prices increase, products and components of questionable origin and quality may become more prevalent in both regulated and illicit markets.
The situation is compounded by the financial constraints facing many U.S. cannabis operators. In other industries, companies would typically stock up on inventory ahead of announced tariff implementations. However, due to capital limitations in the cannabis sector, many businesses are unable to take such proactive measures.
When selecting vape hardware, cannabis operators should request comprehensive documentation from suppliers, including:
The increasing tariffs on Chinese vape components highlight the essential need for robust quality management and supply chain verification in the cannabis industry. As economic pressures mount, maintaining product safety becomes both more challenging and more critical than ever.
Don't let tariff pressures compromise your commitment to quality and safety. Contact Qredible today to discover how our purpose-built quality management and compliance management solutions for high-risk industries can help you navigate supply chain challenges while maintaining the highest standards of product integrity and consumer protection.
