Vape Shipping Ban Shakes Up Hemp & CBD eCommerce Stores

pact illegal to ship vape products

First Federal Law Banning Vape Mailing

When the 116th US Congress and Former President Trump passed a Covid-19 relief package at the end of 2020, few people paid attention to the amendment entitled “Preventing Online Sales of E-Cigarettes to Children Act.” The new law exists as a supplement to existing legislation the Jenkins Act and the Prevent All Cigarette Trafficking Act, or PACT Act, and has two key points that its attempting to address. Primarily, the bill redefines the word “cigarette” to include electronic nicotine delivery systems (ENDS). In doing so, it requires vape product vendors, particularly online retailers, to follow the same laws as traditional tobacco and smokeless tobacco shops. Secondly, it mandates that the US Postal Service create and implement regulations to specifically prohibit the mailing of ENDS. Without the ability to ship directly to consumers, and requirements for shipping to other businesses more stringently regulated, businesses will be forced to look at more expensive, alternative private shipping options. 

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ATF Prevent All Cigarette Traffic Registration Form: Download Here

What qualifies as an ENDS under the new legislation?

ENDS products are described as follows “any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device [including] an e-cigarette; an e-hookah; an e-cigar; a vape pen; an advanced refillable personal vaporizer; an electronic pipe; and any component, liquid, part or accessory of a device…without regard to whether the component, liquid, part, or accessory is sold separately from the device.” The section describing what type of aerosolized solution may be considered a vapor product is so broad that non-nicotine and hemp products, such as CBD and Delta-8, qualify. Additionally, the language indicates individual components of ENDS, such as the liquid, the device itself and various accessories, as being part of the ban. 

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How will this ban on shipping vapes affect consumers?

Consumers in rural areas will be disproportionately impacted by this vape mail ban in a negative manner. There are many areas of the US that are quite remote and simply do not have a tobacco or vape shop. Individuals living in those areas often rely on their mail services to supply a large portion of their goods and products. Not to mention that most retailers in remote areas are unable to provide specialty tobacco products at competitive prices, forcing rural dwelling citizens to pay a higher price for goods.

In addition, many medical marijuana patients and adult-use marijuana consumers choose to fill their own cartridges, as opposed to buying pre-filled ones. With the implementation of this legislation, consumers who prefer to fill their own cartridges will be forced to purchase from middle men smoke shops that offer less variety at a higher price, not to mention the questionable nature and quality of their products.

How have the USPS and private shipping entities reacted to this legislation?

Furthermore, the amendment to PACT will mandate the USPS to create onerous regulations that will prohibit the shipment of ENDS from businesses to consumers and make it very difficult for businesses to ship to other businesses. On February 19th, the USPS published a proposed regulation entitled “Treatment of E-Cigarettes in the Mail.” The 31-day period wherein comments by the public may be submitted has since expired and the USPS has yet to formally announce the final rule. Currently, there is no date set for its implementation. 

Regardless of the USPS issuing their final regulation, private mail services, such as UPS, Fedex and DHL, have begun to establish their own internal regulations regarding the sending of e-cigarettes in the mail. DHL prohibited shipment of any vape devices prior to passage of the law, UPS will cease shipping ENDS effective April 5th and Fedex stopped shipping packages containing ENDS on March 1st. 

How will this affect retailers and manufacturers?

The PACT amendment will make business much more difficult to conduct for vape product retailers and manufacturers. In order to remain compliant with the new amendment, all sellers must register their business with the U.S. Attorney General, the Bureau of Alcohol, Tobacco and Firearms (ATF), remain compliant with local and state laws and register with tobacco tax administrators in all states and localities that a vendor does business in. With local and state laws existing incongruously and rapidly evolving, it will be near impossible for most operators, particularly smaller ones, to abide by this burdensome regulation. Moreover, submission of a list of monthly transactions to each state’s tax administrator is required by law, including the names and addresses of each individual purchaser, the quantities and items sold, and the name, address, and phone number of the person delivering the shipment to the recipient. Vendors will be required to keep records of any incidents wherein an individual under 21 years of age attempts to make a purchase for a five-year period. As one of the stated aims of this amendment is to increase tax revenue, collection and submission of all local and state excise taxes are mandatory, as is attachment of all required tax stamps to products sold. 

Furthermore, in order to comply with the new law, it will be compulsory for vape companies based in the United States to ship only through private carriers, and for those carriers to obtain an adult signature at the point of delivery, along with myriad personal information on the individual delivering the shipment. Ultimately, this will increase shipping costs for sellers, in terms of both obtaining raw materials to create vape devices and delivering finished products into the hands of consumers. Furthermore, this increased complexity in the tax code will necessitate additional costs to be incurred by vape retailers in order to remain compliant.

Failure to comply with the Jenkins and PACT Act will result in significant civil fines ranging from $5,000 to $10,000, along with the potential for criminal charges to be brought, with the penalty being up to three years incarceration. There is a provision in the PACT legislation that the ATF must create and maintain a non-compliance list. Being on the list disallows any shipping entities from delivering that companies products and the list is routinely circulated to the USPS, private shipping services, credit card companies and others to ensure that bad actors are unable to do business.

Mailing vaporization devices through USPS will soon be an antiquated notion. For the time being, it looks to be the same situation for all liquid solutions and empty cartridges. 

Can I still ship my vape samples to the lab for testing?

It’s not always the case, but this time it appears regulators considered the other stages of the supply chain as they aimed to regulate direct to consumer sales online. Shipping from one business to another (B2B) remains legal, so samples can be shipped to laboratories for testing and wholesalers are permitted to send product resellers.

Can eCommerce companies ship vapes after registering?

Yes, assuming their registration is complete and they’ve adopted a private shipping company who verifies age and collects a signature at the time of delivery. The form for registering with the ATF can be downloaded here.

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