The consequences of the war in the Middle East are becoming more and more evident along the horticultural chain. Rising energy prices, more expensive raw materials and higher logistics costs are forcing suppliers around the world to raise prices. Looking ahead to the coming winter and the 2027 season, producers face difficult decisions: pre-order tickets, wait until the situation stabilizes, or risk further price increases. Globally, these rising costs are expected to contribute to higher inflation.

Energy prices
A direct consequence of the war in the Middle East is the increase in energy and fuel prices, although natural gas prices have not yet reached the peak seen in 2022 when the war in Ukraine began. Rising gas prices also affect electricity costs, both for growers with and without combined heat and power (CHP) systems, and CO₂ availability. In addition, horticulture suffers – and will continue to suffer – many indirect effects from the situation and higher energy costs.

Plastics
The increase in the price of oil directly affects the transport costs of the entire chain, from supply to distribution. Indirectly, it also affects the production of many horticultural inputs. Oil is an essential raw material for plastics, which are widely used in horticulture, such as trays, films and pots. Rising oil prices therefore directly increase the cost structure for both growers and suppliers. In addition, labels, packaging and printed materials are also more expensive due to the increase in the price of oil. An additional factor is the shortage of recyclable plastics. Suppliers are forced to raise prices or switch to daily prices.

Fertilizers
The fertilizer market is also affected, although fertilizers represent a relatively small part of production costs. Fertilizer producers face higher costs of energy, raw materials and logistics, which increases prices for producers. In addition, the price of sulfuric acid, which is necessary for the production of fertilizers, is increasing significantly. The war in Ukraine, together with export restrictions from Russia and China, makes the situation even more difficult.

Coconut substrates
This year the substrate market, which is already under pressure, is also suffering the effects of the war. Although India has reduced petrol taxes to 3 rupees ($0.032) and abolished diesel taxes, the situation in Sri Lanka is completely different. As one of the main producers of coconut substrate, it is suffering from fuel and energy shortages as the country relies almost entirely on imports. The government has raised fuel prices significantly to cover import costs and aims to reduce consumption as much as possible. Measures include a four-day work week, fuel distribution via QR codes and even discussions about possible lockdown measures. Energy prices have also increased. Whether substrate production will be directly affected is not yet clear, but higher costs for suppliers are expected.

Shipping charges and delays
With global fuel prices on the rise, transportation costs are increasingly affecting both the supply of horticultural inputs and post-harvest logistics. Belgian carriers, for example, have raised the alarm. Isabelle De Maegt of the Belgian Transport Federation explains, “We are very concerned. The increase in diesel prices this month is having a significant negative impact on transport costs, which have risen by more than 6%. There is no other option but to pass this increase on to customers. Transporters cannot absorb these costs themselves, as the average profit margin in the transport sector is around 2%”. But other factors are also acting on price increases: French shipping and logistics company CMA CGM has revised its Emergency Fuel Surcharge (EFS) from March 27, 2026, citing higher fuel prices linked to geopolitical developments in the Middle East.

Investment decisions
Global greenhouse horticulture continues to develop and has good long-term prospects, but recent years have also brought major challenges. These include the loss of capital in North America due to the failure of several large vertical farms and greenhouse companies. Worldwide, the sector was also affected by the ToBRFV tomato virus. This year, several suppliers have cautiously reported positive developments, but geopolitics threatens to get in the way. Global uncertainty is driving up construction costs (glass, steel), and instability is not providing a solid basis for investment, delaying the final approval of several major projects worldwide. Also, fears of a new wave of inflation are driving interest rates higher.

“We cannot balance state budgets on the backs of one industry. Excessive taxation drives consumers back to the illegal market and shrinks the legal one.”

By Katherine Dailey, Michigan Advance

Genesee County Sheriff and Democratic gubernatorial candidate Chris Swanson was adamant. A 24 percent cannabis tax was approved as part of the 2026 budget Gov. Gretchen Whitmer’s (D) plan to fund road repairs across the state.

In a video posted to Facebook Friday evening, Swanson promised that, if elected, he would work to repeal the tax, saying it is “not fair and just” to an industry that provides goods and services, as well as jobs, to the state of Michigan.

Swanson’s campaign added in a press release that the tax “undermines the legal market and the intent of voter-approved legalization,” referring to the 2018 ballot initiative that legalized cannabis in the state of Michigan.

“As governor, I will work to roll back the 24 percent wholesale excise tax to ensure fairness and equity,” the press release continued. “We cannot balance state budgets on the backs of one industry. Excessive taxation drives consumers back to the illegal market and shrinks the legal one.”

“I’ve never been a fan of fixing budget issues by targeting one industry, and that’s what happened,” Swanson said in the video. “The people spoke. This is an industry that’s here to stay. And anything that tries to disrupt that is going to be non-negotiable for this administration. And we’re also going to keep it from expanding into the black market, where they can lead to other, more dangerous situations. So we’re going to make sure that this industry is taken care of.”

The tax narrowly passed the State Legislature in early October and came into force in early 2026, and has been heavily criticized…and even taken to court—the leaders of the cannabis industry— because they harm the industry and the small companies that make it up.

Swanson’s press release also quoted Robin Schneider, executive director of the Michigan Cannabis Industry Association, as praising his opposition to the tax, a law enforcement agency focused primarily on keeping the industry out of the black market.

“Candidate Chris Swanson came out publicly against a 24 percent wholesale tax,” Schneider said. “Now it’s up to us to build momentum behind the message that we’re brave enough to carry.”

Swanson also emphasized in the press release that he still plans to fund the kinds of infrastructure projects that cannabis taxes will fund.

“It’s about doing what’s right for Michigan. Even with the repeal of this tax, I’m 100 percent committed to funding all future road and bridge projects. That’s a priority, too,” he said. “Supporting a fair system protects people, strengthens small businesses and respects voters who have made their voices heard.”

Swanson has trailed Secretary of State Jocelyn Benson (D) in polls and campaign fundraising in the primary, but has continued to campaign ahead of the August primary.

This story was first published by the Michigan Advance.

Ohio State Representative Jamie Callender (R-Concord) testified before the House Judiciary Committee on House Bill 611 (Callender/Stewart), marking the first General Assembly hearing on a bill targeting the adult use industry since Senate Bill 56 was passed (S. Huffman, 136th General Assembly). House Bill 611 would grant cultivation licenses and dispensary licenses to independent cannabis processors in Ohio, often referred to as orphan processors, joining the majority of cannabis processors in the state.

Originally created by House Bill 523 (per S. Huffman, 131st General Assembly), Ohio’s medical marijuana program divided licenses into three categories: dispensaries responsible for operating as the retail part of the program, growers responsible for growing cannabis, and processors responsible for turning raw cannabis into products sold at dispensaries. Since the bill’s passage in 2016, state law now allows for the sale of products without the involvement of processors, and all Ohio cannabis growers have become vertically integrated, meaning they own a grower, processor and at least one dispensary, leaving 14 processors without a corresponding grower.

To address orphan processors’ concerns about product access and increase market supply, House Bill 611 grants an orphan processor a cultivation license after a successful application to the Division of Cannabis Control. This allows orphan processors to build up to 5,000 square feet of cultivation space. Additionally, House Bill 611 grants dispensary licensing to orphan processors.

“We want to thank the bill’s sponsors for their support in introducing this long-overdue legislation,” said Jason Kabbes, founder and CEO of Diamon Science LLC. “Ohio’s orphan processors have long been left out of Ohio’s cannabis supply chain, without fair or reliable access to supply or demand, while paying higher annual license fees. This corrective action will allow a small number of Ohio-based small businesses that have participated in the program since its inception to finally participate and compete in the legislature’s original arena.”

“Ohio’s first-day small business independent processors urgently need cultivation and retail licenses, as this critical vertical integration is the only path to sustainability and independence while ensuring a diverse and consistent product for patients and consumers,” said Emilie Kelleher (Ramach), Vice President of Business and Government Affairs at Beneleaves. “This self-sufficiency will allow Ohio-owned small businesses like ours to reduce their entire supply chain and operating costs, resulting in more affordable products and greatly improved patient access across Ohio.”

House Bill 611 follows the passage of Senate Bill 56 and marks the beginning of the next wave of cannabis legislation building on the foundations laid for Ohio’s cannabis industry by House Bill 523, Senate Bill 56 and Issue 2.

“House Bill 611 comes after much discussion and debate among members of the cannabis industry, advocates and lawmakers,” Callender said. “This bill marks the continuation of the efforts begun by House No. 2 to create a strong, mature and legal cannabis market in Ohio. By supporting orphan processors, we will maintain good-paying jobs across the state by increasing market supply, reducing costs for consumers and undermining illegal sellers.”

Source: Ohio House of Representatives