Cost – Smoke Master

Tennessee Ban on THCA Has Cost State $54M in Tax Revenue

admin — Thu, 20 Aug 2026 17:54:15 +0000

The Tennessee ban on THCA products has cost the state $54 million in tax revenues, WPLN News reports. Last year, state lawmakers approved the ban along with a new tax on intoxicating hemp products but has only collected 3% of what the new tax was projected to bring in.

In February, the state had anticipated collecting about $8.8 million from the new tax but has only brought in $61,000. The THCA effectively ended the sale of smokable hemp and full-spectrum CBD products, which were the most profitable in the market. The lower sales have also impacted the sales tax the state had previously collected on hemp products.

The ban was initially supposed to take effect January 1 but was delayed until the summer so cultivators and retailers could shift their business models.

Lee Crabtree, a hemp farmer, told WPLN that he is “not making the money” he did “back when CBD was huge there for a minute.”

The state has patched the $54 million deficit with surpluses from other taxes, including franchise and excise taxes, and sales tax more broadly.

Ganjapreneur: Offering daily insights since 2014, the leading digital business journal for cannabis industry professionals. Subscribe to the newsletter to join our community of over 40,000 ganjapreneurs.

TG joined Ganjapreneur in 2014 as a news writer and began hosting the Ganjapreneur podcast in 2016. He is based in upstate New York, where he also teaches media studies at a local university.
More by TG Branfalt

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The Hidden Cost of Surprise Cannabis Vendor Price Hikes (and the Fight to Stay in Control) – Cannabis & Tech Today

admin — Tue, 07 Apr 2026 02:25:38 +0000

A cannabis entrepreneur (let’s call him Ben) runs a small cannabis brand in Michigan. He’s dealt with harvest shortages, human resource issues, and the labyrinth of state regulations over the years. Then he gets a rattling message: his wholesale marketplace, Leaflink—his digital lifeline to hundreds of retailers—is jacking up fees three-plus-fold. No phased schedule, no public webinar, just an “effective next billing cycle” notice.

This story may sound familiar to the myriad brands who found out about a rate hike being implemented that would significantly increase their monthly costs. Operators in different states were already venting on Reddit, one claiming their monthly bill had gone from $599 to $6,200. Some described how they’ve begun to look at alternative platforms, while various brands in Missouri and Colorado were known to have organized coalitions of sorts to figure out if they were going to stay or migrate off of Leaflink, covered not too long ago by a few publications. The common refrain: We’re already bleeding margin. Why is our tech partner twisting the knife?

When Predictability Disappears

At first glance, a small percentage-based fee doesn’t look like much. But over time, those percentages pile up, especially if your sales start to grow. One month you’re paying a few hundred bucks, the next it’s thousands. That’s not a fee. That’s rent.

Operators aren’t just upset about the money. It’s the lack of warning. When a major vendor suddenly changes pricing with no heads-up, you’re left scrambling. Budgeting becomes a guessing game. Forecasts get tossed out. And there’s no time to rethink strategy because you’re already on the hook.

In places like Colorado and Missouri, where wholesale prices have dropped for years, even small unexpected costs hit hard. Add in taxes, compliance, and overhead, and margins get razor thin. Operators are already stretched. So these surprise hikes don’t just hurt—for many, they feel like betrayal.

An Industry Already on Edge

The truth is, cannabis operators are under constant pressure. In states like California, Michigan, and Colorado, prices have tanked from their peak. Meanwhile, costs haven’t followed suit. You still have to pay for testing, Metrc tags, packaging, and staff whether you’re selling at $1,500 a pound or $400.

Federal illegality makes things worse. No easy access to credit, no tax deductions under 280E, and no room for error. And in emerging markets like New York, legal businesses are being undercut by a booming illicit market while waiting for licenses and rule changes. It’s a slog.

So when a software platform flips the script and starts charging a percentage of every transaction, that leaves operators asking: Can I even afford to stay on this platform?

Incentives That Don’t Align

There’s another issue with take-rate pricing: it changes the incentives. When a platform makes more money as your gross sales go up, it starts to care more about volume than profitability. That might mean encouraging bulk deals or bigger discounts, even if those eat away at your bottom line.

That kind of misalignment isn’t harmless. When your vendor’s goals don’t match your own, it becomes harder to trust them. And in cannabis—where trust is already scarce—that matters.

Also Read: Stay ‘Melo,’ Build ‘Lowd’

A Shifting Landscape—and the Opportunity to Innovate

Since the price hike, operators have responded in a handful of ways. Some are raising their own prices for orders placed on the marketplace while others are shopping around, trying out platforms with flat monthly rates and clearer billing. Some are even piecing together multiple tools to reduce dependency on a single marketplace.

This pushback is creating space for innovation. New platforms are now stepping up with better UX, real support, and clean pricing models that don’t change on a whim. When a tool feels more like a partner and less like a toll booth, people notice.

Operators are now asking smarter questions: Does this software actually help me run my business better? Is the support team responsive? Can I track my costs and margins easily? Can I switch without months of chaos?

Slowly, control will shift back to the brands.

Because in the end, that’s what this is about. In software we talk a lot about fees and features, but this is really about cannabis companies’ ability to have control over their data, costs, and future.

The winners in this space won’t be the platforms that extract the most. They’ll be the ones that give operators the tools and confidence to move forward without surprises. In cannabis, that kind of clarity is a lifeline.

If you get a surprise rate change tomorrow, it’s normal to feel frustrated. But it can also be a moment to pause and look at the bigger picture. Are the tools you’re using helping you stay connected to your business, or making things more complicated? When margins are tight, clarity matters. And when you gain that clarity, the better your chances of navigating what comes next.

Azam Khan is the co-founder and COO of Distru, a leading ERP platform powering the cannabis supply chain. With a background that spans mobile gaming, ad tech, and enterprise software, Azam brings a unique commercial lens to operational challenges in emerging industries. He began his career in business development roles across the mobile and social gaming ecosystem, gaining experience in application development partnerships and monetization strategy.
After earning a B.S. in Biology from UC Santa Barbara, and indulging in a variety of roles across various industries, Azam gravitated toward the cannabis sector, where he connected with Blaine Hatab through early community meetups and conferences in Oakland. Alongside Blaine and technical co-founder Johnny Halife—whom Blaine met through the Elixir programming community—Azam helped launch Distru to serve the overlooked but critical layer of cannabis distribution and manufacturing.
Since founding the company, Azam has worn nearly every operational hat—spanning sales, customer success, support, marketing, and now leading finance and strategic initiatives. He currently oversees investor relations, growth strategy, and key operational planning as Distru scales nationally. His cross-functional experience and deep market understanding have been instrumental in shaping Distru’s evolution from early product-market fit to a category-defining vertical SaaS company.

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Nicotine Pouch Taxes and Regulations Surge Worldwide—But At What Cost?

admin — Sat, 04 Apr 2026 01:45:24 +0000

A fresh wave of nicotine taxation is sweeping the United States, and it’s changing the game for smoke-free alternatives. And what started as a campaign to address plunging cigarette revenues has morphed into a broad push that would bring within the same tax framework smoke-free alternatives — especially nicotine pouches. For those who focus on tobacco harm reduction, the stakes are high: taxation is not just a revenue-generating mechanism but an instrument of policy that could help speed up or thwart smoking cessation.

Utah’s recent reforms help clarify this shift. Beginning July 1, 2026, the state will impose a new tax of 11 cents per cigarette, along with a new framework to govern nicotine pouches: $1 per can, with additional charges as the pouch count increases. This replaces older weight-based systems with a hybrid unit-and-volume tax. And updated definitions ensure that all nicotine products, including pouches and e-cigarettes, are explicitly covered in the tax code. On paper, this is modernization. In practice, it indicates a wider alignment: the fundamental products as if they present similar risks.

And Utah is far from alone. Other states, including New York, Michigan, Massachusetts, Vermont and Washington, are proposing or enacting similar measures across the country. Nicotine pouches in many instances are being taxed at the rates historically applied to cigarettes or other high-risk tobacco products. The reasoning is well known — youth uptake, concerns about addiction, funding for public health — but it often neglects an important aspect: relative risk.

Taxing safer alternatives like cigarettes

Why does this matter? Because nicotine pouches are not cigarettes. They don’t have tobacco leaf, don’t burn, and create no smoke. There is an increasing body of evidence to suggest they are far less harmful than smoking cigarettes and can have a meaningful role in cessation.” Research on contemporary oral nicotine products suggests they may assist smokers in transitioning away from combustible tobacco — especially in conjunction with behavioral support. Real-world data from Nordic countries provide additional support for this consideration; in these countries, the wide adoption of oral nicotine has been associated with dramatic buildups in smoking prevalence.

But U.S. fiscal policy seems headed in the other direction. The most high-profile example of taxation as deterrence probably comes from New York. The state is proposing a 75% wholesale tax on nicotine pouches, the same as traditional tobacco products. The measure is projected to raise billions in revenue, but it has drawn huge backlash. The majority of New Yorkers do not support this measure, maintaining that pairing smoke-free alternatives to smoking contravene the principles of harm reduction movement since it removes financial incentive to switch, with less than 50% supporting passage. Some policymakers have even questioned whether a public health strategy can be based on making safer products more expensive than combustible ones.

In Washington State, for example, a 95% excise tax has already gone into effect — nearly doubling the retail price of many nicotine products. Similar actions in Minnesota and Rhode Island highlight an unmistakable trend: With cigarette use falling, governments are widening their tax base to add new categories of nicotine. Just in 2025, dozens of legislative proposals sought to rein in nicotine pouches, a strong sign that the tide was turning against favorable treatment for all brands.

What are the repercussions?

Economic modeling and real-world evidence both suggest that excessive taxation of reduced-risk products may delay smoking cessation — or even reverse it.

But this method comes with a cost. Economic modeling and real-world evidence both suggest that excessive taxation of reduced-risk products may delay smoking cessation — or even reverse it. If the price gap between cigarettes and competitors narrows, so does the incentive to switch. Cost is still one of the most potent motivators for adult smokers seeking lower-risk alternatives.

In Thailand, officials have adopted a far different — but equally aggressive — tack. Instead of taxation, enforcement has served as the main tool. The government has stepped up enforcement against sales and marketing of nicotine pouches, especially in tourist areas and on online marketplaces. These include fines and possible jail time, reflecting widespread concerns about youth use and unregulated sales. If couched as a public health intervention, such stringent enforcement could drive consumers into underground markets, where product quality and safety are far less assured.

Opposing such avenues, groups like the Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) have long advocated another way. Instead of blanket taxation or prohibition, CAPHRA promotes risk-proportionate regulation: rigorous age controls, well-defined product standards, and clear labeling guidance, backed by policies that preserve accessibility for adult smokers. Their stance is bolstered by both scientific research and actual consumer experience from around the world, where harm reduction approaches are evidenced to work in reducing smoking rates.

Time to stop ignoring science and real-world evidence

This makes the current wave of U.S. tax hikes look increasingly out of step with global evidence. Nowhere is the contrast clearer than in Sweden, which just reached its lowest-ever smoking rates. Among adults, daily smoking prevalence has fallen to just 3.7%, fueled in large part by the widespread availability of oral nicotine products like snus, as well as nicotine pouches. Instead of demonizing these substitutes, Sweden has incorporated them into a harm-reduction paradigm — outcomes over ideology (but more on that in our next article.)

The result is not just fewer smokers, but vastly lower rates of smoking-related illness.

Given all this, taxing nicotine pouches the same way as cigarettes seems less like good policy and more like using a blunt tool. While it’s important to address youth access and product standards, these issues can be addressed through targeted regulations rather than broad taxes that may have unintended consequences.

Ultimately, the dispute boils down to a basic question: Does public health policy need to reflect relative risk? If we are trying to reduce smoking, the single largest preventable cause of death worldwide, then the answer should be clear. Policies that make safer alternatives less accessible, less affordable, or — not least — simply less enticing than cigarettes are not only counterproductive; they are, in the face of a mounting body of evidence, increasingly hard to justify. And as Sweden’s experience shows, there is an alternative.

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