Category: This Issue

Approaching Issues

The PMTA process has had some errors and challenges as the FDA’s decision deadline looms.
By Timothy S. Donahue
The U.S. Food and Drug Administration’s process for premarket tobacco product applications (PMTAs) has not been perfect. The regulatory agency has less than three weeks to complete its review of the more than 2 million PMTA submissions that remain of the more than 6 million received (the FDA refused to file more than 4 million submissions from the JD Nova Group). Given the unprecedented number of applications and other factors, the likelihood of the FDA reviewing all the applications by Sept. 9, 2021, is low.
“We will continue to allocate our resources with the goal of working as quickly as possible to transition the current marketplace for deemed products to one in which all products available for sale have undergone a careful, science-based review by [the] FDA,” an FDA spokesperson told Vapor Voice. “With that being said, as with all unauthorized products generally, if products are not authorized by Sept. 9, 2021, and do not come off the market at that time, they risk FDA enforcement.”
A court ruling requires the FDA to complete review of all submitted PMTAs by Sept. 9, 2021. Only a positive order issued by the FDA would allow a company to continue to be marketed according to the terms specified in the order letter.
“At a recent House hearing, acting FDA Commissioner Janet Woodcock pledged the FDA would make every effort to conclude review of the PMTAs from the top five vaping companies by the fall deadline,” said Gregory Conley, president of the American Vaping Association. “The FDA does not exactly have the best track record on keeping to their pledges, but it seems likely that decisions will be made on, at minimum, the tobacco and menthol varieties of Juul, Vuse, NJOY, etc., by September.”
Unfair warning
Complicating matters further, the regulatory agency has also recently been accused of issuing unwarranted warning letters, of leaving companies off its list of accepted PMTAs and of having technical issues with its PMTA filing software. As of July 26, the FDA had issued 135 warning letters for the marketing of illegal vaping products. The majority of those letters centered on e-liquids produced and sold online by small-sized vape shops. As the FDA continues its blitz, however, some companies who submitted PMTAs by the Sept. 9, 2020, deadline have allegedly received warning letters in error.
According to Facebook posts from the American Vaping Manufacturers Association (AVM), at least two companies have received warning letters for products for which they had submitted timely PMTAs. Posts acknowledged that the FDA corrected its mistake in a follow-up letter after receiving complaints from the companies. While the number may be small, it does suggest that the regulatory agency is overwhelmed by the number of submissions it is reviewing.
Credit: Chris Titze Imaging
According to the FDA spokesperson, there has been only one instance where the regulatory agency removed a warning letter from its website after it was discovered that the company had submitted a timely PMTA. The agency did not mention the company by name and said the error had been corrected.
The FDA said the list may change as some companies may not have responded to requests or have not had their PMTA accepted yet. It should be noted that in its guidance document released in January 2020 that identified its enforcement priorities for electronic nicotine-delivery system (ENDS) products, the FDA stated that it “may prioritize enforcement of certain new deemed tobacco products that are marketed without market authorization, including as warranted based on changed circumstances, new information or to better address minors’ use of those products.”
The FDA also recently started listing closeout letters for companies that had responded to warning letters on its website. When the FDA completes an evaluation of corrective actions via a follow-up inspection, it may issue a closeout letter if the agency’s evaluation shows that the issues noted in the warning letter have been addressed.
Recently, however, the agency removed those letters from its website. The FDA offered no explanation for the removal of the closeout letters. Companies such as Dr. Crimmy’s V-Liquid, Bulldog Vapor and CC Apothacary had closeout letters posted, but then it seemed they were removed.
The FDA spokesperson said that the letters are still on the website; however, accessing them changed slightly. Users must now use the search functions to access response and closeout letters. “Any closeout letters issued to firms since Sept. 9, 2020, including Dr. Crimmy’s V-Liquid, Bulldog Vapor [and] CC Apothecary, are still posted on [the] FDA’s website,” the spokesperson said. “On [the] FDA’s ‘Warning Letters’ page, you can find the closeout letters by listing ‘Center for Tobacco Products’ under ‘Issuing Office’ and filtering for ‘Closeout Letter’ under ‘Letters with Response or Closeout.’”
The FDA often lists only a few illegal products in a warning letter. It then states that there may be more, but it is impossible to know if the warnings encompass all the company’s registered products. The agency states that it is the responsibility of the company to only sell products with a submitted PMTA.
Companies that receive warning letters from the FDA have to submit a written response to the letter within 15 working days from the date of receipt describing the company’s corrective actions, including the dates on which it discontinued the violative sale and/or distribution of the products. The response must also detail the company’s plan for maintaining compliance with the Food, Drug and Cosmetic (FD&C) Act in the future.
Warning letters are expected to continue to be issued for illegal vapor products as the deadline for FDA action moves closer, and their volume is likely to pick up after the Sept. 9 deadline. The FDA has not said if it intends to ask for an extension on the deadline; however, the U.S. Small Business Administration recently sent a letter to the FDA asking the regulatory agency to request an extension.
Making the list
There are other issues with the FDA PMTA process as well. Recently, the FDA released a list of products that are legal for sale in the U.S. As of Aug. 9, 372 companies had submitted PMTAs for more than 6 million products. Of those products, 99.9 percent are standalone e-liquid products—and of those, 80 percent of the e-liquid submissions were from a single company, according to ECigIntelligence, a vapor industry data and research firm.
At least five companies that filed PMTAs were allegedly erroneously left off the list, according to social media posts by an AVM representative. In its own investigation, Vapor Voice found that Humble Juice Co. had submitted a timely PMTA, received an acceptance letter and was subsequently left off the FDA’s list of approved products. The FDA has corrected the error for Humble. The AVM did not name what companies were left off the list or had falsely received warning letters.
The FDA stressed it has not independently verified the information provided by applicants about the marketing status of their products. In addition, the list excludes entries of products from companies that did not provide information on the current marketing status of their products to the FDA so that the agency could determine whether the existence of the application could be disclosed. It is possible companies were left off the list because they did not respond to the FDA before publication of the list.
As stated on the FDA’s website, the lists are not comprehensive or intended to cover all currently marketed deemed tobacco products that a company generally might manufacture, distribute or sell without risking FDA enforcement. The FDA stated that it was making the list available to the public to be transparent and increase stakeholder knowledge of these products. However, the list is only one source of information, and retailers should discuss with their suppliers the current status of any particular tobacco product’s application and marketing authorization, according to the FDA.
“Due to the large volume of information that needed to be processed to generate the list, it is likely that some information may have been inadvertently excluded during the development of the list. After initial posting of the list, FDA has received inquiries from companies about certain products they believe should have been included on the public list,” the spokesperson said. “We are reviewing these requests, and will update the list, if appropriate, to ensure accuracy. In general, due to the large amount of data in the files, FDA has also stated minor edits and corrections may be made to the list files to ensure accuracy, and the files will also be updated to reflect actions taken on the applications for the products.”
Shaky submissions
The PMTA submission process has also suffered from technical problems. Several companies have complained that the FDA’s software that manufacturers must download to submit PMTA data has randomly left out some files that the companies are uploading. At least two companies that have helped prepare more than 500 PMTAs have acknowledged the issue and have presented the problem to the FDA.
“We did 15 PMTAs for various clients and just all of a sudden had somebody come up and they got a deficiency letter asking for information that was included in their submission. We started looking through it, and it’s missing. We then spent a bunch of time going through every single one and found several others that were missing one or two files,” one of the companies that discovered errors told Vapor Voice. “We reached out to the FDA, got a basic response … ‘we’re aware of this; we’ll get back to you’ type of thing. We believe it’s a bug in the agency’s eSubmitter program.”
The FDA spokesperson said that the agency’s Center for Tobacco Products (CTP) submitters have three options for electronic submissions:
1.   FDA hosts the Electronic Submission Gateway (ESG) used by all FDA centers for the past 20-plus years. It requires registration and maintaining a security certificate, which has an associated fee. CTP receives electronic submissions directly through the ESG from a small number of companies.
2.   CTP provides a simpler zero-cost alternative to using the ESG directly with the FDA eSubmitter software and the CTP Portal. Using the CTP Portal requires obtaining a free account and using the FDA eSubmitter tool to create a valid package of files, which the CTP Portal will upload. Submitters must download the FDA’s eSubmitter software if they intend to use the free CTP Portal. Instructions for use are on the FDA webpage, and detailed technical specifications for creating valid eSubmitter packages can be found under Electronic Submission File Format and Technical Specifications.
3.   Electronic files can be mailed to CTP Document Control Center (DCC) on physical media such as CD, DVD or flash drive.
Credit: Yuri Hoyda
The eSubmitter errors that some companies have found may be user error, according to the FDA. The inclusion of invalid file types in the upload package may make it appear as if certain files were left off. A common invalid file type users attempt to include are zero-sized files, according to the FDA.
“A user may unintentionally include *.tmp files, which are temporary files of zero size that the user’s computer creates when it is moving files from one location to another. If a user moves files they are uploading during the loading process, the .tmp file their computer created will become part of the package manifest and appear in the eSubmitter file count,” the spokesperson said. “A user may think they are sending 500 application files, but if one is a .tmp file, they are only sending 499 files related to the application.”
The CTP eSubmissions help desk recommends submitters create a file list and review the file types to be used in the submission against the list of invalid file types. After uploading to the CTP Portal, they can compare the list of valid files against the CTP Portal upload manifest to ensure all files were included. If files were found to not be included, they could be submitted separately, according to the FDA.
“In general, FDA intends to send only one deficiency letter (if appropriate),” the spokesperson said. “It is the applicant’s responsibility to ensure all information has been submitted to FDA and to review all files that were uploaded to the software prior to submission to FDA.”
Because of these issues, some companies are offering free PMTA deficiency reviews for companies that submitted them to the FDA. Delphinus Consulting and Blackbriar Regulatory Services have said they have programs to help companies find faults in their PMTA submissions.
After the deadline
How the vaping industry changes on Sept. 9 remains to be seen. Large companies may soon dominate the U.S. vapor market while e-cigarettes produced by smaller companies may disappear, according to new research by ECigIntelligence. The data firm carried out an assessment of the FDA’s “accepted” list in order to understand how the U.S. market may change in a post-PMTA regulated market.
Analysis of PMTAs shows that more applications for simpler disposables and cigalike devices were submitted than applications for open systems. According to the research, the simpler products usually come from large companies while the open systems usually come from smaller businesses. Only about 30 open system brands have filed PMTAs, implying that 85 percent of open system brands will be removed from the market, even if all 30 filed PMTAs are approved.
“This may indicate the discouragement nontobacco companies face when applying for PMTA approval,” said ECigIntelligence’s managing director, Tim Phillips. “The PMTA process can be a grueling one for nontobacco companies without sufficient financial means or knowhow. And if smaller brands are to become less prevalent in this category, consumers may soon only have the option of a few models provided by a handful of big companies.”
While the industry awaits decisions from the FDA, vape sales are rising. IRI data for U.S. convenience stores shows that dollar and unit sales for electronic smoking devices each climbed approximately 14 percent for the four weeks ending June 13. A 12-week review revealed a gain of 16.3 percent in dollar sales and 18.6 percent in unit sales.
Whether these trends will continue after Sept. 9 is anyone’s guess.

August 19, 2021
High Expectations

Credit: TSD
While the legality of Delta-8 THC products is questionable, retailers say consumer demand is booming.
By Timothy S. Donahue
Delta-8 THC is currently one of the hottest cannabis products on the market. During the Tobacco Plus Expo (TPE) in May, an estimated 75–80 exhibitors out of 350 were offering a Delta-8 product. Many companies were introducing new Delta-8 products at the event; for example, Beard Vape Co., Charlie’s Chalk Dust, JustCBD and TD Distribution Co. all launched their own brands.
Recent estimates predict CBD sales in the U.S. could reach $1.8 billion by 2022. Trevor Yahn-Grode of cannabis industry analytics company New Frontier Data recently told MedPageToday.com that Delta-8 THC had retail sales of at least $10 million in 2020. That number is estimated to double in 2021. Based on the number of Delta-8 vendors at TPE (see “Finally Face to Face,” page 20), sales could triple. It was probably the most heavily hawked cannabis product at the event.
The Beard Vape Co. launched its HRVST Delta-8 brand after numerous distributors started asking about the new cannabinoid hitting the mass market, according to Zachary Kestenbaum, vice president of sales. He said his main objective at TPE was to talk with other distribution companies about where the Delta-8 market is headed. Kestenbaum said consumers like the product because it’s not as overwhelming as the traditional Delta-9 THC, the psychoactive component of marijuana commonly referred to as only THC.
“In the ’70s, ’80s, ’90s, people were smoking marijuana with THC levels at 12 [percent] to 15 percent. Now they’re breeding strains that are 24 [percent] to 26 percent THC (Delta-9 THC). It really can give that head anxiety to people,” he said. “That’s why people like Delta-8 THC because you’re getting a little bit of the psychoactive effect but not at that 25 percent level like you get with the Delta-9 THC. People are preferring the Delta-8. They like it better.”
First discovered in 1941, Delta-8 THC is only slightly different from its cousin compound Delta-9 THC. The two chemicals are only one chemical bond apart, according to Josh Church, a scientist and managing director of Roots Holdings. Research has shown that Delta-8 is a powerful anti-seizure drug. “The issue is it just doesn’t naturally occur at significant levels, so it’s really easy to ban,” said Church, adding that Delta-8 also promotes relaxation, clear-headedness and increased positivity.
Research has also shown that Delta-8 significantly helps reduce stress, stimulate an appetite and lessen nausea. Delta-8 is a less “head high” and more of a body high without the nervousness and paranoia often associated with Delta-9 THC. Delta-8 THC, users should be warned, will also turn up on a drug test as “THC,” according to Church.
Looking at legality
While its popularity is spiking across the U.S., Delta-8 is not without controversy. While hemp itself is federally legal (at or less than 0.3 percent THC), each state has different laws and restrictions regarding byproducts derived from hemp, including Delta-8. No products containing Delta-8 have been tested by the U.S. Food and Drug Administration or are FDA-approved.
Twelve states have completely banned Delta-8 sales. Those states include Alaska, Arkansas, Arizona, Colorado, Delaware, Kentucky, Idaho, Iowa, Mississippi, Montana, Rhode Island and Utah. New York has a proposed rule to ban Delta-8 products, which is under a comment period until July 19. California, Oregon, Vermont and Washington are in the process of enacting regulations for Delta-8 products. Several other states are also considering bans.
The federal legality of Delta-8 products is disputed. The misinformation and ambiguity surrounding its legality is why some manufacturers in the CBD industry took time to develop and market their own Delta-8 products. Jakob Gutierrez, product specialist for JustCBD, which launched its JustDELTA-8 brand at TPE, said it took the company time to launch its Delta-8 product because it wanted to be sure it was working within the law. JustCBD only sells its products to retail shops and distributors; it does not sell directly to consumers.
“We wanted to make sure we were covering ourselves and making sure we were doing it right, complying with the right laws. Now, we were missing out a little bit because of that, but we’re back on track,” Gutierrez said. “We got on the train, and orders are exponential for the Delta-8. People are coming in, just ordering various product, and walking out. It’s insane how fast this stuff is flying out.”
Ask eight people if Delta-8 is legal federally and you’ll get eight different answers. Some believe that the vagueness of the 2018 Farm Bill, which legalized hemp and hemp-derived products, means that Delta-8 is currently legal under federal law. “Because Delta-8 is such a new product, many state laws don’t address it at all, which puts it in a gray area of de facto legality,” according to Leafly, a cannabis information source. The reason states have banned Delta-8 products is an uncertainty about what it is and what it does, according to many Delta-8 manufacturers.
On Aug. 21, 2020, the U.S. Drug Enforcement Administration (DEA) issued an Interim Final Ruling (IFR) that stated hemp-derived Delta-8 is federally prohibited and is to be considered the same for enforcement purposes as Delta-9 THC and that “all synthetically derived tetrahydrocannabinols (THC) remain Schedule I controlled substances.” The memo states that these products cannot be shipped to customers from retailers through the U.S. Postal Service or any other shipping method, and it is illegal to use and possess these products in states where cannabis is not legal.
The U.S. Department of Agriculture’s position on Delta-8 THC is that the Farm Bill mandates only a Delta-9 THC limit and doesn’t regulate Delta-8 at all, so Delta-8 is not part of the agency’s hemp mandate, according to previous statements. Since the amount of Delta-8 THC found naturally in hemp is almost 1,000 times lower than the amount of Delta-9, the agency saw no reason to address it at all, including as part of its “total THC” testing requirement.
A hemp trade association and a hemp company have filed a petition in the U.S. Court of Appeals for the District of Columbia challenging the DEA’s IFR. That case is still being reviewed. The D.C. Circuit petition challenges the IFR on the basis that: 1) the DEA did not follow the appropriate notice and comment procedures, 2) the DEA does not have authority under the Farm Bill to issue the IFR, and 3) the DEA’s acting administrator lacks authority to issue the IFR.
Not all states are anti-Delta-8. For example, Florida’s statute states that “any hemp product intended for human or animal ingestion or inhalation which is sold in Florida must comply with all Florida statutes and rules. Any hemp or hemp extract products offered for sale or sold in Florida must comply with all labeling rules and have a certificate of analysis that shows a total THC (THCA x .8777 + THC Delta-9 = total THC) content of 0.3 percent or less.” Florida is the only U.S. state to have enacted legislation to provide a framework for the legal sale of Delta-8.
Florida’s statement on Delta-8 clarifies that Delta-8 does not run afoul of any Florida law and, in fact, certifies that the manufacture and distribution of Delta-8 is allowed in Florida, according to ACS Laboratory, a Tampa, Florida-based CBD testing facility. “Despite Florida’s conservative legislative trends, the state’s public policy toward Delta-8 is progressive and ultimately beneficial,” ACS’ website states. “By establishing a structured and comprehensive regulatory framework for manufacturers and distributors to follow, Florida is enabling a burgeoning industry to continue to grow and evolve while simultaneously ensuring the safety of buyers by mandating certificates of analysis for all [Delta-8] items sold.”
Chemistry lesson
The proposed updates to those New York rules that ban Delta-8 included a provision declaring that all cannabinoid and cannabinol products made through a chemical process called isomerization can no longer be sold in New York. The new rules specified the compounds Delta-8 and Delta-10.
Isomerization is, in its most basic explanation, adding a chemical bond to a molecule, according to Church. “Basically, anything you can make out of the THC molecule is banned because all isomers of said molecule are banned—technically,” explains Church. “If you remember Spice or K2, they were synthetic THC. The issue was the DEA; the FDA would ban the new molecule—say tetrahydrocannabinol (THC) 9753—and then within the next week, they would come up with THC 9756. And it was this cat-and-mouse game where the DEA, the FDA, and the Chinese authorities couldn’t stop them fast enough until they finally just banned all isomers.”
Many industry players say that the federal government will soon legalize marijuana, and the ambiguity around products like Delta-8 and Delta-10 THC will disappear. President Biden has publicly said that he supports the decriminalization of cannabis and removing it from the Schedule I list while Vice President Kamala Harris has gone further, stating that she supports full legalization. But like all the states that have legalized Delta-9 THC and have specifically banned Delta-8, it would not be surprising to see the federal government make some of those same decisions, according to Church.
“Regulation of these cannabinoids … it’s going to take an act of Congress. Then it’s really hard to try and predict what Congress is going to lay forth in the legislation. I mean, look at the nicotine space with synthetic nicotine still not being closed as a loophole around regulation,” explains Church. “Because so many states are banning it right now (Delta-8), I think the federal government will come in with some sort of hefty regulation on all the isomers or conversion molecules.”
Tony Riva, CEO of TD Distribution Co., parent to the Hi Drip e-liquid brand, also launched a Delta-8 brand at TPE. Riva said he didn’t have the concerns many of the other manufacturers had. He says the vapor industry has been dealing with a harsh regulatory environment for nearly a decade. He doesn’t see why the cannabinoid industry is going to be any different, especially as more and more cannabinoids come to market.
“If I lived in fear all the time in this industry, I’d never get anything done. We are just trying to provide a legal product and hope that the government doesn’t tell us that we can’t. It’s a constant battle with their … tyrannical overreach that they’ve thrown down on the vaping industry,” he says, adding that he expects the cannabis industry to be federally regulated in some form within the next few years. “People like Delta-8; people like Delta-10 or CBD. They feel that it helps them. We are just trying to provide high-quality, legal products to our clients. At the end of the day, it’s just going to be another hula hoop to jump through.”
Church says that he recommends any retailer or manufacturer contemplating entering the Delta-8 market to consider having a firm process of chain-of-custody documentation, adding that the cannabinoid industry should look toward the legal marijuana industry as a guideline. Church emphasized that one bad player could destroy the market by doing something wrong and causing the potential for another situation like the e-cigarette or vaping product use-associated lung injury (EVALI) issues that occurred because a few bad players used vitamin E acetate in black market THC vape pens without doing any research on the chemical.
“Those dirty conversions are out there; there is a lot of risk to a finished good. The last thing you want to see is a dirty lab pumping out a bunch of garbage. Then it gets distributed nationally, and we have another EVALI situation. This isn’t because of the Delta-8, which is largely safe, but because it’s a bad product. I would strongly encourage anyone looking to move into the Delta-8 or Delta-10 space to meet those high standards that are required for any type of legal consumer product,” says Church. “The reality is, though, that the sky’s the limit on these types of products. I think we’re just now seeing it with Delta-8 and Delta-10 … but it’s going to evolve into a crazy world of these new designer cannabinoids. And regulation is coming along for the ride.”

July 5, 2021
Numerical Response

Credit: Alexander Ovsyannikov
A large study conducted by the TPA shows e-cigarettes control youth smoking.
By Maria Verven
An extensive, state-by-state analysis conducted by the Taxpayers Protection Alliance (TPA) proves e-cigarettes are more effective in controlling youth smoking than tobacco control programs started after the Master Settlement Agreement (MSA).
“Tobacco & Vaping 101: 50 State Analysis,” authored by Lindsey Stroud, uses data from the Centers for Disease Control and Prevention (CDC) to argue the benefits of vaping, especially when it comes to teen usage. Ironically, this same data had been used to create public hysteria over vaping rates, especially among youth.
“As lawmakers across the country seek to reduce youth tobacco and vapor product use, many have introduced and passed legislation that regulates, taxes and in some cases prohibits the sale of products that actually help reduce tobacco use,” Stroud said.
Stroud said she’s been using the findings in state legislative testimony this year. “I’ve received positive feedback from pro-vaping and tobacco groups but have not heard much back from the anti-groups,” she said. “They may be surprised to see that I used the same data they do to argue the benefits of vaping,” she said, adding that she’s determined to make this information publicly available and accessible.
Stroud said she hopes other researchers and industry followers will use the report’s state-by-state information on adult and youth use of tobacco and vapor products in future articles and reports.
Of particular interest is the effectiveness—or lack thereof—of tobacco settlement payments, taxes and vapor products on reducing combustible cigarette use.
While all 50 states and Washington, D.C. saw a decrease in the percent of smokers, some states actually saw an increase in the number of smokers, due to an overall increase in the state’s population. Stroud’s analysis took into account both the percent difference and population change in examining adult and youth vapor and tobacco rates.
The analysis of cigarette tax revenues between 2000 and 2019 found that while cigarette tax hikes helped increase revenues in the short-term, these increases didn’t contribute to the decline in smoking rates.
It also shows that most states drastically underfunded programs for tobacco cessation services, education and prevention after collecting cigarette tax revenue and tobacco settlement monies over the past 19 years.
Vapor products tied to decrease in youth smoking
Of greatest importance is the analysis on the reduction in youth use of combustible cigarettes—which is at an all-time low. The report also examines youth vapor rates, specifying whether they ever tried an e-cigarette or are truly current or daily users.
Here’s where the data got really interesting. Stroud compared the smoking rates among 18-year-olds to 24-year-olds in the 10 years after the MSA with the smoking rates in the 10 years after e-cigarettes appeared on the market.
Credit: Vaksmanv
Lo and behold, there were greater decreases in smoking rates in the 10 years after the emergence of e-cigarettes when compared to the 10 years after tobacco settlement lawsuits.
And in the four states where smoking rates actually increased after e-cigarettes came on the market, policymakers had increased scrutiny and restrictions on e-cigarettes due to the perceived youth vaping “epidemic.” Coincidence? Stroud doesn’t think so.
“Addressing youth use of any age-restricted product is laudable, but it should not come at the expense of adult users of such products,” Stroud wrote in Politics, adding that bans, arduous regulations and/or unfair taxation threaten adult access to e-cigarettes and other tobacco harm reduction products.
“Completely disregarding that youth smoking rates are at all-time lows, officials often propose ‘solutions’ that fail to address the real reason why youth use e-cigarettes,” Stroud said.
States with higher rates of youth smoking have higher rates of youth vaping. Stroud said that the data clearly indicate that youth use e-cigarettes because friends and family members use them.
When asked about the “primary reason” for using e-cigarette products (among current users, only 10 percent of respondents from many states answered it was due to “flavors” while 17 percent cited “friends and family” and 51 percent cited “other.”
Vapor Voice caught up with Lindsey Stroud to learn more about this groundbreaking report and how this plethora of tobacco and vaping data can be used to inform future policymaking.
Vapor Voice: How was all this data collected? How long did it take?
Stroud: The idea was to provide policymakers with a plethora of tobacco-related data in a simplified manner.
We compiled the data manually by inputting data from the Centers for Disease Control and Prevention’s Behavior Risk Factor Surveillance System (BRFSS) between 1995 and 2019.
While state-specific BRFSS data included detailed demographic information such as age, gender, race, education level, income and smoking status, it wasn’t easy finding that data for the U.S. as a whole. So I started going through individual state data and putting together state-specific spreadsheets on cigarette use.
In addition, I examined annual state cigarette tax receipts, annual state tobacco control funding, cigarette tax increases and youth tobacco and vapor product use, which came from the CDC’s Youth Risk Behavior Survey.
It’s important to note that the Campaign for Tobacco-Free Kids also uses this same BRFSS data. However, while Tobacco-Free Kids only shows smoking rates and the cost of smoking in each state, we pulled various data items to tell a more complete, insightful picture.
What surprised you the most about this project?
I was amazed that my hypothesis—that e-cigarettes were more effective than the MSA in reducing smoking rates among young adults—actually held true. It was really eye-opening.
It’s still pretty amazing that 45 states and D.C. saw greater decreases in smoking rates among 18[-year-old] to 24-year-old adults in the 10 years after e-cigarettes emerged on the market than in the 10 years after the tobacco companies started shelling out millions that states were supposed to use on smoking cessation programs.
In the outlier states, smoking rates were at their lowest levels ever until 2018—the same year the surgeon general declared a “youth vaping epidemic.” Tragically, that’s when smoking rates began to increase.
Why did you feel this data was needed?
I really wanted to show policymakers data that compared youth vaping to youth smoking rates, which were way higher in the 1990s, especially compared to today’s youth vaping rates.
In all states, cigarette tax increases led to immediate increases in revenue in the short term, but these have all fallen as less adults smoke cigarettes.
I also wanted to call attention to the lack of state funding for tobacco control programs, despite the fact that states receive millions if not billions of dollars annually from tobacco monies such as excise taxes and tobacco settlement payments.
As far as I know, this is one if not the first analysis of the BRFSS data to include graphs—which clearly show the reduction in smoking rates among young adults as well as how little funding is spent on tobacco control.
Finally, I wanted to prove my hypothesis that vaping can take much of the credit for the reduction in both adult and youth smoking rates.
The analysis can be found at: www.protectingtaxpayers.org/harm-reduction/tobacco-vaping-101-50-state-analysis/
The original “Vaping Vamp,” Maria Verven owns Verve Communications, a PR and marketing firm specializing in the vapor industry.

July 5, 2021
Taxing the Solution

Credit: Farizun Amrod
Vaping products don’t create costs; they make some of the costs of tobacco use disappear.
By George Gay
According to a Vapor Voice news story quoting a CStoreDecisions piece by Isabelle Gustafson, lawmakers have introduced into the U.S. Senate a bill that would establish a federal tax on vaping products and increase the traditional tobacco tax rate for the first time in a decade.
I quote below three of the five-paragraph news story in full because I believe that some of the points made by those supporting the bill need to be challenged, though I acknowledge that such challenge will not affect the final outcome:
The Tobacco Tax Equity Act of 2021 aims to “close tax code loopholes for tobacco products by increasing the federal tax rate on cigarettes, pegging it to inflation to ensure it remains an effective public health tool and setting the federal tax rate for all other tobacco products at this same level.”
“Tobacco-related disease accounts for one out of every five deaths in America, and I know that story firsthand,” Senate Majority Whip Dick Durbin was quoted as saying. “Data shows that the most effective strategy to prevent children from starting this deadly habit is to price it out of their range. This bill would help reduce tobacco and e-cigarette use by ending loopholes that the industry has exploited to target our children. If America can kick its nicotine addiction, it would go a long way to improving our public health for generations to come.”
“Loopholes in our tax code continue to favor big tobacco while the American public, especially our youth, pays the price,” said Representative Raja Krishnamoorthi. “The Tobacco Tax Equity Act increases taxes on cigarettes and finally imposes taxes on the e-cigarettes hooking our children on nicotine, which would generate billions of dollars in federal revenue. As a father of a high schooler and middle schooler, I’m determined to make sure we end the youth nicotine and vaping epidemic.”
I would like firstly to question the term “loopholes,” which is used three times, once in the introduction and once each by the two politicians quoted. The word loophole is used normally to convey the idea that some scam is in operation that allows a disreputable individual, corporation or organization to gain an advantage over others by obeying the letter of a law or rule but not the spirit of that law or rule. And that implied criticism is aimed at one of the usual suspects—big tobacco.
But is this what has been going on here? Has big tobacco been using loopholes in the tax system to target young people? Not from the evidence presented. The politicians quoted seem to be complaining that big tobacco hasn’t been falling in line with tax rules not yet in place, which seems a tad unfair. In other words, the complaints, if any, should be aimed at the politicians for not having brought in these new rules earlier, given that they seem to believe they are so important.
But it is not the way of politicians to blame themselves or even to admit that they have been neglectful of their duties, so the politicians try to clamber onto the word loopholes as if it somehow represents the moral high ground.
And on that somewhat unstable ground, they teeter. Durbin is quoted as implying that one or more people from within his circle of family and/or friends died from a tobacco-related disease. I’m sure that most people would sympathize with Durbin at this point, but the problem here is that he is trying to convince people of the correctness of his position by arguing from the particular to the general.
And the concern must be that despite the fragility of such arguments, other politicians will be won over. It makes you wonder what would happen if a politician called for extra taxes on automobiles because somebody from within her circle had been killed in an automobile wreck.
What I don’t like, also, about Durbin’s position is that it smacks of collective punishment. Tobacco consumption led to the death of somebody from within his circle, so all tobacco users should be punished through the taxation system, even though what they are doing is legal and even though they had no interaction or involvement with the dead person. Such actions are banned even in war.
Then, from the dizzying moral heights of language loopholes and particularities, the announcement moves on to the favorite ploy of all: emotional blackmail. We are told that the new taxes will protect “our children”—or, rather, children (three mentions), youth (two mentions) and schoolers (two mentions).
I wonder how? Perhaps, in the light of not enough attention being paid by politicians to some of the other needs of children, the additional money raised through the new taxes could be used to feed the 18 million children who are projected to face hunger in the U.S. this year. But don’t hold your breath.
Credit: Auremar
Krishnamoorthi is quoted as saying that the Tobacco Tax Equity Act “increases taxes on cigarettes and finally imposes taxes on the e-cigarettes hooking our children on nicotine.” Note the use of “finally” here, which I guess is meant to imply that it has taken a long time to bring the bill forward because of the heroic efforts that politicians have had to put in to overcome the huge barriers standing in the way of tax reform, when, presumably, the reason is that they have not been bothered up to this point.
I would also like to take issue with the idea that Krishnamoorthi trots out about “e-cigarettes hooking our children on nicotine.” Does he know this to be the case, I wonder? Has he proof? It is true that if you look on the website of the National Institute of Drug Abuse, you will see a piece that says, “Consuming nicotine—through regular cigarettes or vaping—leads to the release of the chemical dopamine in the human brain. As with many drugs, dopamine prompts or ‘teaches’ the brain to repeat the same behavior (such as using tobacco) over and over.”
But according to a review by Rivka Galchen (London Review of Books, April 22) of The idea of the Brain, the author, Matthew Cobb, casts doubt on such an idea. “The connection of dopamine to addictive behavior—Cobb cites a Facebook founder saying the site was meant to be addictive, to ‘give you a little dopamine hit’—is ‘nonsense’ and ‘neurobollocks,’” Galchen quotes Cobb as saying. I am not saying that Cobb is correct. I am not in a position to be able to judge such things, but what he has to say must surely give people, even politicians, pause for thought, for he is not alone in thinking this way.
One problem in assessing the rights and wrongs of taxing vaping products in the U.S. arises from the fact that politicians have fallen for the Food and Drug Administration’s descent from science to alchemy in “deeming” these products to be tobacco products. Imagine a U.S. in which bread has not been invented and a significant proportion of the population lives on cake as a staple, with the consequence that these people are wobbly fat.
In trying to improve the situation, the authorities have turned to imposing high taxes on cake, but the sugar content proves to be too appealing, and the people keep buying cake, whether tax-paid or illicit. The authorities then declare war on the cake manufacturers who, after a while, admit that too many wobblies are dying, and come up with bread, with which they claim they can wean at least some of the people off cake.
What do the authorities do? Do they welcome this development? Not if we are talking about the FDA. They say that bread, like cake, contains flour, and, since there are still small amounts of sugar in bread to make it palatable, bread must be deemed to be cake. At which point, the politicians, desperate for funds, realize that bread can be taxed. Alice has gone headfirst through the looking glass.
Credit: Highway Starz
A couple of other points come out of the announcement of the bill. It is clear that part of the aim of the bill is to force the U.S. “to kick its nicotine habit.” But nicotine and tobacco use are both legal in the U.S., so people have the right to consume tobacco and nicotine products. There is a danger here that politicians are going to muddle up issues of ethics with those of rights.
Just because you object to something on ethical grounds doesn’t bestow on you the right to make it unobtainable for those who don’t go along with your ethical views. In the U.K., we seem to get stuck in the same morass when discussing the issue of assisted dying, and all too few politicians are willing to make the stand that though they might be ethically opposed to assisted dying, they recognize the rights of others to avail themselves of it. As I believe Michel de Montaigne pointed out in the 16th century, “Life is slavery if freedom to die is wanting.”
At the same time, it seems to me that we enter the tobacco and nicotine tax debate too far along the line. We enter it on the assumption that tobacco and nicotine products should be taxed. But why is this so? Well, one idea has it that products should be taxed according to the harm that they cause. This point was made by a couple of speakers who addressed the Western Economic Association International (WEAI) virtual conference during March.
According to a news report, one of them, Woo-Hyung Hong, professor in the Hansung University Department of Economics (South Korea), said that tobacco taxes should be based on a product’s external economic costs. Such a system should consider medical costs, loss-of-labor capital costs, costs from cigarette-related fires and avoidance costs, among others.
There is a certain logic associated with this idea, but if you accept that logic, then surely you have to apply it to everything. Automobiles, for instance. Look at the medical costs that arise from people driving automobiles. There are, of course, the deaths and injuries caused by car wrecks, the deaths and injuries caused by the pollution most automobiles contribute to, pollution that has now been acknowledged to be a bigger killer worldwide than tobacco consumption. And then there is the issue of people becoming wobbly fat because they use their cars rather than walk.
This, in part, is what the U.S. Centers for Disease Control and Prevention has to say on this subject: “Obesity is serious because it is associated with poorer mental health outcomes and reduced quality of life. Obesity is also associated with the leading causes of death in the United States and worldwide, including diabetes, heart disease, stroke and some types of cancer.”
And what about the loss-of-labor costs? Well, for a start, all of the medical problems outlined above are likely to lead to such loss of labor, and just imagine the loss caused by people snarled up in highly polluting traffic jams.
And while most automobiles still run on fossil fuels, there is the billion-dollar cost of subsidizing the oil companies for pumping these fuels out of the ground—fuels, the use of which is causing eye-watering costs associated with climate change and environmental breakdown, costs from which we might never recover.
None of this is to say that tobacco should not be taxed. We are too far down the road to go back now. But all of the revenue from such taxes should be used to relieve some of the causes that encourage people to take up smoking; one of which is clearly poverty since poverty is a good predictor of the likelihood of a person being a smoker. I believe in the idea of redistributive taxes, but the way that tobacco taxation works at the moment is that it is redistributive “upward,” which is obscene.
And finally, there is no reason to tax vaping devices. They don’t create costs; they make some of the costs of tobacco use disappear. They are a solution, not a problem.

July 5, 2021
Finally Face-to-Face

Exhibitors react to the industry’s first trade show since the Covid-19 pandemic struck in March of 2020.
By Timothy S. Donahue
The vaping industry has a lot of trade shows and conferences every year. So, when the Covid-19 pandemic struck in March 2020, it was a big change. Gone were face-to-face meetings and the networking opportunities the events offer to business owners. Many businesses saw sales slump and profits nosedive. Coupled with other regulatory requirements, the pandemic caused many businesses to close.
That’s what made this year’s Tobacco Plus Expo (TPE) trade show so special. After being postponed nearly four months, many retailers said they had surpassed their sales goals for the entire show on the first day. TPE attendees said it was a good feeling being able to fist bump clients and talk about the industry in person instead of through a Zoom conference. The TPE felt like the beginning of a much-needed return to normal.
Held May 12–14, an estimated 2,500–3,000 people visited the TPE on the opening day of the three-day event. According to security staff, approximately 4,000–5,000 attended overall. Every morning, several hundred attendees waited at the entrance to see the more 350 exhibitors. The show was moved to May from its typical January date due to the pandemic and was also the first major trade show to be held at the Las Vegas Convention Center (LVCC) since it closed in March of 2020.
Dan Bilzerian (right), owner of the cannabis company Ignite
Even professional poker player Dan Bilzerian, owner of the Ignite cannabis brand, made an appearance. “Honestly, I’m excited to be back,” Bilzerian said. “This industry is really set to take off again.” When asked about Ignite sales at the show during the second day of the event, Bilzerian said the numbers looked good. “We hit our sales target for the show on our first day,” he said. “We’ve had an excellent response.”
Many exhibitors said that the show had exceeded expectations. Rich Zagari, a sales representative for Bantam Vape, said they were unsure of what the show would be like considering it was the first industry trade show in over a year. “We didn’t know what the response was going to be, but there’s a lot of people here,” he said during the second day of the show. “Yesterday was great and today’s already shaping up to be even better. When you’re seeing customers come up to the booth, having conversations and placing orders, it makes a difference. It’s good to be back doing business face-to-face.”Zachary Kestenbaum, VP of sales for The Beard brand, said that while he was hoping for a bit more foot traffic this year, for his company the TPE was more about getting facetime with distributors, vape shops and other industry players. “I enjoy face-to-face sales more than phone sales, anything of that nature,” he said. “I think it’s much better to conduct business outright. In that regard, the show has been a great success.”
Some exhibitors initially questioned whether the show would be able to bring in foot traffic at all. Andy Lucas, director of sales for Ripe Vapes, said with the influx of restrictions, such as the premarket tobacco product application (PMTA) requirements for the U.S. Food and Drug Administration and the recent placement of electronic nicotine-delivery systems (ENDS) under the Prevent All Cigarette Trafficking (PACT) Act, alongside the issues brought about by Covid-19, he was a little hesitant about exhibiting.
“Actually, it’s been pretty good. It’s been more like a traditional show, especially for a big show like this. You got all these organizations with tobacco and the hemp industry, the e-liquid industry; it has really lived up to the hype surrounding its opening,” said Lucas.
Jakob Gutierrez, product specialist for JustCBD, said he was happy to be back in Las Vegas. The attendees were also ready to spend money. While he had hoped for even more buyers to visit the TPE, JustCBD had received more orders by Day 2 of TPE than the company had gotten at the last couple of shows it attended, according to Gutierrez. “People keep stopping by and loving our products,” he said. “People are absorbing it, taking it and just asking us for more. We keep providing high-quality products, and our customers keep coming back.”
There was a noticeable reduction in the number of nicotine vaping companies showing on the floor. The impact of PMTA and PACT Act regulation was evident. There were only an estimated 16–18 e-liquid vendors, including Coastal Clouds, BLVK E-liquid and Fresh Farms. There were an estimated five to seven hardware manufacturers, including Mi-One Brands, Myle, NJoy and Inspire, and most of them produced their own brands.
There was also a noticeable reduction in international participants, said Tony Riva, CEO of TD Distribution Co., the parent to the Hi-Drip e-liquid brand, which was also exhibiting. Normally, there are at least 20–30 exhibitors from China alone; this year, there were only a few Chinese brands present, and the booths were manned mostly by U.S.-based personnel.
“The international community that is normally present at this show just isn’t here this year. That’s obviously due to the Covid restrictions and complications of international travel,” he said. “That’s having an impact on sales, I think. But business is good. We are just trying to navigate the changing regulatory environment and new policies that have been put in place.”
Regulatory concern
Before the show, exhibitors were concerned about what impact the PACT Act would have on show sales. The rule requires a manufacturer to gather data from customers to file the mandatory monthly reports with native, state and local governments disclosing the identity, address and product received for all customers as well as remit any excise taxes owed.
“As a best practice, it’s our priority to collect licensing information upfront from any new customer and we were glad potential buyers came to the show prepared,” said Zagari. “They had copies of these documents on hand or emailed them right away.”While many companies have already stopped using the United States Postal Service (USPS) because the PACT Act prevents the USPS from mailing ENDS products to customers, the rules have not yet taken effect. At the time of writing, the USPS had yet to publish the finalized rule. Lucas said Ripe Vapes had a large following for online sales. However, Ripe Vapes has ended all direct-to-consumer sales because of the PACT Act and now only conducts B2B sales in the U.S. “It was a difficult decision,” he said. “In the end, it was the right one to make.”
Zagari said Bantam plans to ship through USPS until the final rules go into effect. “We are working to identify alternative shipping options, which will help us continue online consumer sales once the USPS final rule is published,” he said. “It’s our goal to ensure our customers always have access to our high-quality, flavor-filled e-liquids that are in compliance with all regulatory requirements.”The PACT Act’s definition of ENDS is so broad that it includes vape-able hemp cannabis products too. JustCBD only sells cannabis products and felt that they were “suckered in” to the ENDS definition, according to Gutierrez. The company has filed an exemption with the USPS, but that exemption will not be considered until after the final rule goes into effect. “It seems like we are jumping through a lot of hoops to sell a legal product that has nothing to do with nicotine or tobacco,” Gutierrez said.
Beyond the PACT Act, TPE exhibitors and attendees remain concerned about the PMTA process and the full impact of FDA regulation on the vaping industry. Numerous companies, including major industry players like Dura Smoke, My Freedom Smokes, Logic and Vape Wild, have gone out of business, merged with other companies or ended all online sales.
Kestenbaum said that as the market condenses and regulation pushes players from the market, naturally sales to the companies that remain would increase. The recent release of the list of manufacturers that have submitted PMTAs has also served a guidance for vape shop owners. Companies cannot now claim they have submitted a PMTA without having done so.
“So many companies were saying, ‘We’re going through PMTA. We’re doing it. We’re doing it,’ and they weren’t. I think we are starting to see many of those companies drop out of the industry, said Kestenbaum. “We’re trying to run everything by the book … I feel like we’ve gotten burned for doing that because there were a lot of companies that were not. The PACT Act, PMTAs, these aren’t all bad. Let’s clear out the lawless, let’s get a little bit more organized and allow the ones doing the right thing to continue.”
Lucas said Ripe Vapes submitted only one PMTA for its VCT flavored e-liquid. The company has a considerable international business, so its other popular flavors, such as Key Lime Cookie, are still available outside the U.S. “Our attorney said, ‘Look, your best chance … the way this is going to go, looking at it from a cost standpoint, take your No. 1 e-liquid and just roll with it,’” said Lucas. “Some of these guys are trying 10, 15 or 20 flavors. They may get it if they have enough money, and there’s a couple of guys in this industry that probably do have enough money.”
Another concern is that the FDA has been taking its time in reviewing PMTAs, according to Lucas. He doesn’t see a path for the regulatory agency to complete reviews on the more than 6 million PMTAs submitted by the 1-year deadline (Sept. 10, 2021).
“We find it kind of hard to believe they’re going to have this done by next year. That’s what my next question is: What happens? Do they give you an extension? I think the industry is going to force them to make some decisions because you’re putting us through this,” explains Lucas. “The submittal alone for us was huge. So, when you’re spending all this money, you want some results. … It’s going to be an interesting thing as that deadline approaches.”
Bantam Vape has received a filing letter for its submitted products, according to Zagari. He said that the company hopes to hear back from the FDA soon but is preparing for the likelihood that the agency will not complete all reviews come September. “We are working to better understand our options and in the meantime, we are continuing to monitor FDA communications and actions.”
TPE 2022 will be held Jan. 26–28, 2022, in Las Vegas.

July 2, 2021
Market Watch: India

Credit: Alin Andersen
E-cigarettes have been banned in India since 2019, but the ‘grey’ market continues to grow.
By Vapor Voice staff
There are more than 100 million cigarette smokers in India. The country suffers from over 1 million tobacco-related deaths each year. But Western-style cigarettes account for only a fraction of tobacco consumption in India. According to data from the Global Adult Tobacco Survey (GATS) of 2016–2017, India has the second-largest tobacco-consuming population in the world (China is first). An estimated 267 million Indians use tobacco in some form.
Tobacco also plays a significant role in India’s economy. More than 4.2 million hectares of farmland in India are dedicated to growing tobacco. The government also owns a 28 percent stake in ITC, India’s dominant tobacco company. Currently, there are only 19 smoking cessation centers for the nearly 270 million tobacco users, and there is no national policy to make telemedicine or other medical support available, according to the CDC Foundation.
Under the guise of preventing potential health risks to the country’s youth, India banned the “import, manufacture, sale, advertisement, storage and distribution” of e-cigarettes in September 2019. Ministers at the time said the decision aimed at averting health risks related to e-cigarettes. The Indian vaping ban came amid an updated guidance from the World Health Organization (WHO), which encouraged the prohibition of e-cigarettes. India’s ban does not cover the personal consumption of vaping products, although the rule is ambiguous and doesn’t define personal consumption.
Before the vapor ban, many vapers would purchase their products at tobacco shops, known as paanwalas. These shops sold mostly basic 510-threaded vaping devices, low-quality shisha-flavored e-liquids and cheap closed pod systems, according to sources familiar with vaping in India. Shop owners knew little about tobacco harm reduction (THR) and the role vapor products play. A handful of large importers were supplying the shops, and in 2014, ITC even released its own e-cigarette, Eon, that it marketed through the local shops.
India also had a small fraction of vapers, mostly former smokers, that understood the THR concept of vaping and its purpose as a quit smoking aid. “They opened a few shops and were quality conscious. They wanted to help customers stop smoking combustible cigarettes,” said a former vape shop owner, who asked to remain anonymous due to the illegal nature of vaping products in India. “These shops sold mostly high-end brand devices and e-juices from trusted manufacturers. “Almost all of them had online shops and social media presence and nationwide reach, and a few also had brick-and-mortar stores.”
Then came the ban. India’s legal vaping market abruptly stopped overnight. All websites were shut down immediately, sources said. The law, as written, is strict with severe penalties. Initially, all players in the vaping industry in India were terrified. “After some time passed, with little to no enforcement action, the market began to slowly reemerge,” said another former participant in the Indian vape market. “Vendors returned, although in much smaller numbers. The cheap, low-quality vapes are back at the bigger paanwalas. Often these shops do not care what age a customer is when selling tobacco products.”
Amplifying the issue is that most of the employees running the paanwalas do not possess the knowledge to properly educate customers about the usage and maintenance or the pros and cons of vaping products, according to the former vape store owner. “This market needs restrictions and regulations. The less educated, less privileged masses perceive vapes as just another way to exhale dense clouds,” he said. “Also, this market is less afraid of the law because, in most places, the local police have arrangements with small stalls/shops/kiosks of all kinds, where they collect a weekly fee (called a hafta) to look the other way when they flout rules.”
Vaping products are even being displayed on some store shelves now in India. A few of the biggest paanwalas in the cosmopolitan cities reportedly sell Juul and other high-end hardware. It’s not plainly obvious everywhere, and the specialist “vape only” vendors are all clandestine. Most of the specialists are discerning and do not entertain new customers without a reference from a known customer.
“The black market is not large at present. However, as India has a huge population (1.4 billion), even ‘not large’ can be sizable. Unofficial estimates say India had a million vapers before the ban, and there are still approximately 200,000 to 300,000 vapers in the country,” the former market player said. “The penalty for selling vapes to anyone—even an adult—is up to three years in prison and fines up to INR500,000 ($6,700). You will be amazed to know that the penalty for selling [combustible] cigarettes to a minor is only INR200 ($2.75) with no imprisonment. How is this allowed?”
According to Anupam Manur, an assistant professor of Economics at the Takshashila Institution in Bengaluru, banning vapor products has caused the government to lose all controls over the products.
“If a seller is selling an illegal product anyway, what difference would the age of buyer make—whether it is above or below 18 years?” Manur wrote in Business Insider. “Furthermore, since it is illegal, would it make sense for a seller to ensure product quality and safety? There have been numerous reports of substandard and potentially dangerous products being sold in India on the black market,” he said. “It would behoove the government to learn the lessons from the U.K. and the U.S. and choose a harm reduction approach, which would involve developing a regulatory plan for e-cigarettes that maximizes smoking cessation among adults while limiting youth uptake.”
The WHO was more enthusiastic about India’s approach, even giving Indian Health Minister Harsh Vardhan a top award for pushing the policy. Vardhan is a former WHO advisor and was until recently the chair of WHO’s executive board, and hence deeply steeped in the WHO’s anti-THR stance. “His leadership was instrumental in the 2019 national legislation to ban e-cigarettes & heated-tobacco products,” tweeted the WHO secretary-general, Tedros Ghebreyesus, after announcing the award. “Thank you, minister!”
Samrat Chowdhery, director of the Association of Vapers India (AVI) and president of the International Network of Nicotine Consumer Organizations, a global consumer advocacy group comprising 40 national and regional bodies, does not expect anything to change in India’s vapor market any time soon.
Samrat Chowdhery
Politics aside, the negative impact of the ban will become clear in time, he says, adding that the nations that have embraced vaping products as THR tools are reaping the rewards of accelerated smoking declines after allowing (and in some cases encouraging) smokers to make the switch.
Countries that have experienced lower health costs because they have embraced vaping products and invested in THR may one day offer enough evidence to force a shift in India’s policy toward e-cigarettes, according to Chowdhery. “Currently, Thailand is the only other major country in Asia that bans safer nicotine inhalation alternatives, and it is worth noting along with India, it too has a state-run tobacco enterprise which is facing competition from replacement products,” said Chowdhery. “China is moving toward regulation too. This ‘ban group’ is likely to shrink further over time.”
If electronic nicotine-delivery system products continue to be available in some form in India, the number of ex-smokers who have switched will continue to grow, according to Chowdhery. With the ban slowing this transition and potentially even halting it, he believes at some point the vaping ban will create its own critical mass to call for a rethink.
“Another possibility is that the courts intervene and either discard the law altogether or create caveats which render the law infructuous. Such challenges require substantial financial backing, which established commerce in this field can support,” said Chowdhery. “The courts have so far been reluctant to delve into this issue because of the emotional ‘think of the children’ pitch attached to it, but over time, rationality and pragmatism will win over. A country with this large of a tobacco problem cannot for long ignore effective measures to reduce related mortality and morbidity.”

July 2, 2021
Unintended Consequences

Credit: Lost in Midwest
Harm reduction advocates worry about the effects on vapers when the USPS implements PACT Act requirements for ENDS.
By Vapor Voice staff
The United States Postal Service (USPS) has delayed the implementation of a requirement to place electronic nicotine-delivery systems (ENDS) under the same shipping rules as combustible cigarettes. As of this writing, the USPS has not published its final rule for mailing ENDS products in the Federal Register. The USPS has stated that the rules will take effect immediately when the final rule is published.
The rule has been delayed because the USPS is still determining how it will handle the broad definition of ENDS set by the U.S. Congress and how the USPS will process and determine eligibility for companies seeking an exception to the Prevent All Cigarette Trafficking (PACT) Act rules. For example, CBD vaping devices fall under the ENDS definition, but it is believed that it was not the intent of Congress to ban the mailing of hemp products. No date has been announced for when the USPS intends to publish the final rule.
Emily Burns, of counsel for the Green Light Law Group, noted that while the USPS could have banned vaping products altogether as part of the new rule, the USPS is now taking time to revisit the implications of an all-encompassing prohibition on shipments of vaping products. She wrote in the firm’s blog that the USPS must not exceed its own legal authority under the PACT Act by regulating vaping products that fall outside the definition of tobacco product as such a rule could be subject to challenge by various industry groups.
Credit: Aleksandr Yu
“If lawmakers intended to truly change the way the federal government defines ENDS to include nontobacco and non-nicotine products, it is rational to assume that Congress would have also amended the [Tobacco Control Act] to allow the FDA to regulate these other substances. The strategy moving forward should be to encourage USPS to specifically focus on the ENDS market … anything done in relation to cannabis or hemp should be seriously challenged by the industry.”
The USPS confirms Burns’ concerns and has stated that the process is turning out to be more complicated than just ending all vape mail of vapor products. On April 19, the USPS issued guidance for exemptions to the requirements for mailing all vapor products, including cannabis. The USPS was inundated with exemption applications, none of which will be addressed until the final rule is published, according to the USPS.
The USPS refers to possibly exempting cannabis products in its guidance. Other exceptions include intrastate shipping within Alaska and Hawaii, shipments between businesses engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation or research, shipments by individuals for noncommercial purposes (including return of goods to manufacturer), limited shipments by manufacturers to adult smokers for consumer testing, and limited shipments by federal agencies for public health purposes.
For cannabis-based product exemptions, the guidance states that “mailers must retain, and prepare to make available upon request, records establishing compliance with all applicable federal, state and local laws pertaining to hemp production, processing, distribution and sales, including the [2014 Farm Bill] and [2018 Farm Bill].” The guidance says such records may include “laboratory test results, licenses and compliance reports.”
Burns stated that the USPS guidance also indicates that cannabis products with greater than 0.03 percent THC would be nonmailable if they are deemed to be drug paraphernalia for purposes outlined under the Controlled Substances Act (CSA), which includes a federal ban on mailing drug paraphernalia that already exists outside of the PACT Act. However, the CSA prohibition on drug paraphernalia does not apply to “any person authorized by local, state or federal law to manufacture, possess or distribute” such items.
“In the case of medical and recreational cannabis states that have removed criminal statutes penalizing drug paraphernalia used to consume cannabis, anyone who is shipping from one legalized state to another would technically fall under the paraphernalia definition exception, thus providing a legal basis for exception from the PACT Act requirements,” Burns states.
The move to place ENDS under the PACT Act has been heavily scrutinized. Several harm reduction advocates say the new rule will bring unintended and deadly consequences. During a seminar sponsored by Hall Analytical in mid-May titled “PMTA and Beyond: A Global Outlook on ENDS Regulatory Requirements,” David Lawson, CEO of Inter Scientific, said that placing vaping products under the PACT Act only serves to benefit large tobacco companies and could push former smokers who shop for vaping products online back to combustible cigarettes.
“If you’re a large tobacco company in the U.S., you most likely sell directly to the likes of Walgreens and these kinds of stores. They then sell them to consumers. Many of the independent vaping companies and manufacturers, they sell online. The PACT Act doesn’t really impact store sales. It only impacts online sales,” explains Lawson. “So a company who relies entirely on online sales may have gone through the [submitting a premarket tobacco product application (PMTA) to the U.S Food and Drug Administration] process. They’re now risking the potential for not being able to ship to their clients at all. I think from that perspective, it’s quite negative and damaging.”
Lawson said that what lawmakers failed to realize when moving ENDS under the PACT Act is that online retail has the advantage of being able to do more thorough ID checks than a local mom-and-pop shop. A credit card is needed for an online purchase, for example, along with a photo ID. At a brick-and-mortar store, a youth simply needs a fake ID and cash. “It’s much easier to do detailed checks on people online than it is to do them in store,” he said. “It is a growing concern for the U.S., the ability of youth to get access to ENDS, but I think, from the experience I’ve had, from what I’ve seen from our clients in the U.S., the kids aren’t getting the products online.”
Credit: Michael Vi
Another consequence of the PACT Act is that when adult consumers who purchase vaping products online can’t get their products anymore, they may go back to smoking combustible cigarettes, which are more readily available in local stores, according to Lawson.
“In the U.S., if you’re buying a specific product online, certainly it’s not going to be available anymore. You have the option there to try and find an alternative brand or risk going back to cigarettes. I think there’s a huge risk impact that will result in adult smokers who are currently vaping going back to smoking again, which is, obviously, not good for public health,” said Lawson. “I don’t personally see the value of the PACT Act. I think it’s kind of a step backwards. It does risk impacting public health negatively.”
While the industry continues to wait for the USPS to publish its finalized rule and what a PACT Act exemption might entail, Burns recommends that concerned business owners “reach out to a regulatory attorney about the compliance process ahead of time in preparation of the forthcoming regulatory changes.”
Coupled with the requirement to submit premarket tobacco product applications to the FDA, the PACT Act and flavor bans, ENDS regulations have become overly stringent, and the complex rules can turn smokers away from the idea of switching to ENDS products, said Lawson, especially when that regulation doesn’t allow for clarification of the science behind vaping products.
“The issue here really is around all this information from the perspective of science, perhaps. When ENDS first entered the market back in 2006 … there was a lot of bad science and bad data generated. When you generate a bad set of data and it becomes publicly available, people don’t necessarily question and interpret how the information has been generated or the validity of that data,” said Lawson. “I think there’s a huge risk with the media and with the interpretation of science that it can certainly switch people away from using ENDS.”
There are other regulatory challenges coming too. The Tobacco Tax Equity Act Of 2021, a bill that would establish the first federal e-cigarette tax, increase the traditional tobacco tax rate and close tax loopholes, is currently making its way through the U.S. Senate. The rule would follow the lead of 21 states, and Washington, D.C., that have set their own state taxes on vapor products by setting a federal tax on ENDS products.
Senator Dick Durbin, who sponsored the bill, said tobacco-related disease accounts for one out of every five deaths in America. He did not mention that there has never been a reported death associated with vaping of legal nicotine products.
“Data shows that the most effective strategy to prevent children from starting this deadly habit is to price it out of their range. This bill would help reduce tobacco and e-cigarette use by ending loopholes that the industry has exploited to target our children,” he said in a statement. “If America can kick its nicotine addiction, it would go a long way to improving our public health for generations to come.”
The repercussions of the USPS vapor mail ban on the vaping industry will not be realized for some time. While the PACT Act requirements have forced many businesses to close, the vapor industry is used to dealing with a great amount of uncertainty. With numerous regulatory hurdles on the horizon, it does not seem like that is going to change any time soon.

July 1, 2021
Attack of the PACT Act
An amendment to the PACT Act to include vapor products has caused major disruption throughout the vapor industry.
By Timothy S. Donahue
When a 5,000-plus page omnibus bill, the Consolidated Appropriations Act of 2021, was signed into law on Dec. 28, 2020, the vapor industry knew its impact would be bad. It was impossible to know at the time how crushing a blow it would be. Buried deep within the bill (page 5,136) was the Preventing Online Sales of E-cigarettes to Children Act. It was a provision that effectively bans the United States Postal Service (USPS) from shipping electronic nicotine-delivery systems (ENDS).
The updated provision redefines the word “cigarette” under the 2009 Prevent All Cigarette Trafficking (PACT) Act to include ENDS products. ENDS would now be subject to the same shipping laws as combustible tobacco. The ensuing shipping problems for vapor retailers forced many companies to end all U.S. online sales and many others have been forced out of business. Chris Innes, owner of Elevated Vaping in Houston, Texas, announced that he would be closing his shop due to the PACT Act and the U.S. Food and Drug Administration’s stringent premarket tobacco product application (PMTA) requirements.
The Vape Spot in Los Angeles also announced it would be closing its store due to the PACT Act after eight years of helping smokers make the switch. Securience, parent to DuraSmoke, announced a merger with VapinDirect to stay in business. Logic ended all online sales on March 16. White Cloud Electronic Cigarettes ended all online U.S. sales on March 26. Vapewild and Vistavape went out of business entirely. The list goes on.
“If the increase in shipping costs wasn’t enough, the bill also imposes huge paperwork burdens on small retailers and backs it up with threats of imprisonment for even innocent mistakes,” said Gregory Conley, president of the American Vaping Association. “This is not a law designed to regulate the mail-order sale of vaping products to adults; it’s an attempt to eliminate it.”
According to Karen Goss of Chemular, a business improvement solutions and compliance systems provider, the PACT Act affects the entire vaping industry from the manufacturers shipping to the distributor, the distributor shipping to the retailer, and businesses taking orders from consumers online regardless of whether the product is even mailed.
While the legislation was geared toward nicotine vaping products, the law is so broadly defined that cannabis businesses must also comply. This means marijuana and CBD companies selling, manufacturing or shipping vaporizers or associated parts across state lines are required to comply with the provisions of the PACT Act.
“It affects literally everyone in the distribution chain, regardless of whether you are actively shipping your product into a state. If you are advertising your product for sale in that state, you should be registered with that state for PACT Act purposes. This is for any electronic device that, through an aerosolized solution, delivers nicotine, flavor or any other substance to the user by inhaling from a device,” said Goss during a recent webinar. “This covers liquid and any component, part or accessory, whether sold with the device or separate. It coves liquids with 0 mg of nicotine. It covers synthetic nicotine. It essentially covers the gamut of vaping products.”
The PACT Act has turned out to be an even greater hurdle to the vaping business than the FDA’s onerous PMTA applications, which had to be submitted to the regulatory agency in September of last year, according to James Xu, chairman and CEO of Avail Vapor, a major chain of brick-and-mortar vape shops. He said FDA regulations took time; the PACT Act was implemented in less than four months.
“It was just like, wow, this is happening. The PACT Act can take away the majority of online vapor businesses. Smaller companies aren’t going to be able to comply, especially these companies that are selling e-liquids for $10 a bottle that are now going to have to go up to $50, $60 a bottle,” he said. “They’re not going to survive; there’s no way they can survive. They were already cutting their profit margins just to be able to push product out.”
Credit: Sam Larussa
Rules of the road
PACT Act regulations are so stringent for online merchants that leading private shipping companies will also stop delivering vapor products. “Effective April 5, 2021, UPS will not transport vaping products to, from or within the United States due to the increased complexity to ship those products,” said UPS spokesperson Matthew O’Connor in a statement. FedEx began no longer accepting vapor products for delivery on March 1, 2021. DHL had already previously banned all shipments of nicotine-containing products and has now also ended all cannabis vapor product shipments.
The only shipping option that remains is Austin, Texas-based X Delivery, a private B2C shipping company. “The shipping carrier X Delivery isn’t afraid of a little red tape,” the company’s website states. “X will verify the age of the purchaser and obtain the required signature of the adult, as outlined in the PACT Act, with every vape-related delivery.” Another company, Vapefreight, was preparing to ship B2B vapor products but was still conducting trial runs as of this writing.
Many businesses were unsure if B2B mailing would be allowed. According to Azim Chowdhury, a partner at Keller and Heckman, the PACT Act has historically exempted business-to-business deliveries from the USPS ban. Specifically, the USPS ban does not extend to tobacco products mailed only for business purposes between legally operating businesses that have all applicable state and federal government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation or research.
“Companies seeking to use USPS for business-to-business deliveries must first submit an application to the USPS Pricing and Classification Service Center and comply with several other shipping, labeling and delivery requirements,” said Chowdhury. Under the B2B exception for the USPS, all transactions must be done in-person, face-to-face, according to the USPS.
“This was not a requirement set by Congress, and it imposes time and money burdens on both businesses and the USPS infrastructure,” said Conley. “USPS should accept the approved business purposes exception documentation, verify that a recipient is a covered and approved authorized business recipient of ENDS products, and allow mailings through both the USPS pickup and drop-off system in place for other USPS-handled packages.”
The USPS mail ban on vaping products will go into effect on or before April 27, 2021. After this date, retail customers will no longer be able to receive vaping products by way of USPS delivery, according to the USPS. However, the USPS rule states that the agency will mail vapor products under narrowly defined circumstances:

Noncontiguous states: intrastate shipments within Alaska or Hawaii;

Business/regulatory purposes: shipments transmitted between verified and authorized tobacco industry businesses for business purposes, or between such businesses and federal or state agencies for regulatory purposes;

Certain individuals: lightweight shipments mailed between adult individuals, limited to 10 per 30-day period;

Consumer testing: limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes; and

Public health: limited shipments by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
The USPS rules also state that the listed exceptions cannot feasibly be applied to inbound or outbound international mail, mail to or from the Freely Associated States, or mail presented at overseas Army Post Office, Fleet Post Office, or Diplomatic Post Office locations and destined to addresses in the United States. Because of this inability, all ENDS products “in such mail are nonmailable, without exception.”
One way USPS could simplify the exception process would be digitizing not only the specific business requirements but also the exception application itself, suggested Conley. He says that by uploading the necessary permits and business filing documents online, USPS would have access to verified businesses anywhere in the nation, ensuring that there are not unnecessary delays in the shipping process for ENDS businesses. “This online portal could also be used by applicant businesses to verify the status of an approval for utilizing USPS as a shipping provider of ENDS in a timely manner,” he said.
Excluded from the statutory definition are products approved by the FDA for sale as “tobacco cessation products or for other therapeutic purposes and marketed and sold solely for such purposes.” The USPS also proposes to treat ENDS as a standalone category, “albeit one generally subject to the same restrictions and exceptions as cigarettes, consistent with the statute.”
According to the PACT Act legislation, anyone selling vaping products must:

Register with the U.S. Attorney General;

Verify age of customers using a commercially available database;

Use private shipping services that collect an adult signature at the point of delivery;

Register with the federal government and with the tobacco tax administrators of the states if selling in states that tax vaping products;

Collect all applicable local and state taxes, and affix any required tax stamps to the products sold;

Send each taxing state’s tax administrator a list of all transactions with customers in their state, including the names and addresses of each customer sold to and the quantities and type of each product sold; and

Maintain records for five years of any “delivery interrupted because the carrier or service determines or has reason to believe that the person ordering the delivery is in violation of the [PACT Act].”
Retailers can be cited by states for not following their individual requirements for tax payments and filings, and they may have to purchase tobacco and other licenses or hire a registered agent in the state. The cost for being PACT Act compliant can range anywhere from $40 to $250 or more per year per state, according to Goss. “There are a variety of companies that perform PACT Act compliance,” she said. “I put those numbers out there so that you have some sort of ballpark figure and you know you’re not getting overcharged. At the same time, it gives you a view of what to expect for this process on an ongoing basis.”
Credit: Manuel Alvarez
Registered for mail
In addition to the nonmailing provisions, the PACT Act requires anyone who sells ENDS products to register with the Bureau of Alcohol, Tobacco and Firearms and Explosives (ATF) and the tobacco tax administrators of the states into which a shipment is made or into which an advertisement or offer is disseminated, according to Chowdhury. Retailers who ship ENDS, cigarettes or smokeless tobacco to consumers are further required to label packages as containing tobacco and maintain records of all delivery sales for a period of four years after the date of sale, among other things.
Registering with the ATF online requires visiting the agency’s website (www.atf.gov) and filling out a single-page form. Goss said that companies should notice that in the first section under “Person,” the company would enter its name; person is defined as the business. “Another item to note is that you should list all of your business locations that are receiving product,” she said. “For example, if you have multiple distribution hubs, list all of them on this form. Save yourself the trouble of filling out multiple forms and lump all your business locations into one form.”
Companies will also have to tell the ATF where to send service of process in each state the company operates in case of any potential lawsuits. This is another area where hiring an agency to serve as a registered agent can make things easier. “There are a number of registered agent organizations that have offices in every state across the U.S. When you find a company that you like, they can most likely be your agent in all states that you require their services in,” said Goss. “Basically, they’re your mailbox in that state.” There’s not any further interaction required with the ATF after filling out the form unless a company changes agents or any information such as addresses change.
Completing the requirements to register with the states is more complicated. Each state has its own rules for companies doing business in the state. Retailers can be cited by states for not following their individual requirements for tax payments and filings. Some will have special forms while others will accept the same letter copy of the federal registration (addressed to the state). “Go to each state’s tobacco tax office website, if there is one,” said Goss. “Typically, that’s where the state will have information on how to register.”
The state and ATF registration requirements only apply when the destination state taxes ENDS products, according to JDSupra.com, a business news source. This is important for cannabis companies since some states, Oregon for example, have exemptions for ENDS shipments of cannabis (THC and CBD) devices.
The most arduous requirement of the PACT Act is monthly reporting. Similar to the ATF and state registration requirements, the state reporting requirements only apply when the destination state taxes ENDS, according to JDSupra. Just like with the registration process, states have different ways to submit information, and states also want varying amounts of information, according to Goss.
Some states want a form and hard copies sent in, while others have an online portal with templates. Typically, for each delivery sale and each person who has delivered product in connection with a delivery sale, it is required to file a delivery sales report with the comptroller’s office.
“The same product may get reported to the state multiple times. A bottle of e-liquid will get reported when it’s shipped from the manufacturer to the distributor, and then the distributor is going to report it when it ships it to the retailer,” says Goss. In most states, the reports must also include a memorandum or a copy of an invoice that provides:

the name, address and phone number of the person delivering the shipment to the recipient on behalf of the delivery seller;

the name, address, telephone number and email address of the individual to whom the delivery sale was made;

the brand or brands of the ENDS products sold; and

the quantity of ENDS products sold.
California, however, requires brand names and wants registrants to identify and distinguish between various types of ENDS products (a coil and an e-liquid, for example) with all invoice information relating to specific customers to be organized by city or town and by zip code. Texas wants only the brand name and the quantity sold. Every state requires the reports to be submitted on or before the 10th of the month for the previous month. For many states, the first reports were due April 10 for sales from March 27 to March 31.
Credit: John R Perry
Back to the basics
Many believe that including ENDS products in the PACT Act requirements is going to be a detriment to the overall public health of the country. If ENDS products cost more than combustible cigarettes and are harder to acquire, smokers who quit cigarettes with vaping will likely return to smoking combustibles. States are going to know where all the ENDS shipments are going now and how much was purchased. Alongside all the other requirements that vary by state, each state also has varying rules and regulations for when and who should apply and collect any excise taxes.
Xu says that many online companies do not charge either state or local sales tax or excise taxes. Now, the consumer will be responsible for all the taxes and the additional shipping costs. This could mean the end of online vapor sales entirely in some states. For example, numerous vapers from California order online due to their state’s complex tax regime, explains Xu.
According to the California Dept. of Tax and Fee Administration (CDTFA), the state’s statewide sales tax rate is 7.25 percent. The excise tax rate on vapor products is 59.27 percent of wholesale value. In most areas of California, local jurisdictions have added district taxes that increase the tax owed by a seller. Those district tax rates range from 0.10 percent to 1 percent. Some areas may also have more than one district tax in effect.
“That will be a huge cost increase to the consumer when they add up the sales tax, local tax and the vaping excise tax. People order online, one for convenience, but mostly it’s for the cost. That cost advantage is going to go away,” said Xu. “Add an adult signature fee with the shipping-related cost and suddenly the online purchase is just as costly as from the brick-and-mortar stores … possibly even more. [In some states], it’s immediately become a level play[ing] field with brick-and-mortar stores.”
There is no arguing that the PACT Act will change the vapor market. There are going to be supply chain issues, and companies may receive warning letters, felony charges and fines as they navigate the new process. As numerous online retailers close or move to a distributor, those customers will most likely move to brick-and-mortar vape shops.
There are some positives, according to Xu. “The online market is going to suffer, and sadly, it’s going to push some back to traditional cigarettes. However, the local brick-and-mortar vape shop can do a better job at educating consumers about vapor products and helping people transition away from deadly combustibles,” he says. “Most shop owners and employees take pride in their customer service and their knowledge of the product. It’s too early to tell what type of impact the PACT Act will have on our retail stores or the industry as a whole. Right now, it’s still wait and see.”
May 9, 2021
Stand and Deliver

X Delivery wants to be the logistics answer to the challenges of mailing PACT Act-compliant vaping products in the U.S.
By Timothy S. Donahue
When the options seemed bleak, X Delivery took on the challenge. Buried within the omnibus spending bill passed at the end of last year was the Preventing Online Sales of E-Cigarettes to Children Act that prohibits the U.S. Postal Service (USPS) from delivering nicotine or cannabis vaping products directly to consumers by bringing electronic nicotine-delivery systems (ENDS) and cannabis products under the 2009 Preventing All Cigarette Trafficking Act (PACT Act).
All the major shipping carriers (UPS, FedEx, DHL) stopped shipping vaping products too. It seemed the online market for vaping products had ended abruptly (see “Attack of the PACT Act,” page?). Then came X Delivery. The shipping carrier with the simple name offered a solution. While there is still room for growth and bringing on more drivers to deliver vaping products to more zip codes, X Delivery has given many online retailers hope.
The PACT Act requirements make shipping vapor products complicated. Paul Vinuelas, chief logistics officer for X Delivery, said that the company can fulfill all the PACT Act requirements, including verifying the age of the purchaser and obtaining the required signature of the adult with every vape-related delivery. All packages containing vaping products cannot weigh more than 10 pounds (4.5 kg) and all shipping packages must also carry a sticker stating the contents contain a “tobacco” product, along with a statement reminding the recipient that taxes are owed on the purchase, according to Vinuelas.
“All shipping has unique challenges. The fact that the national carriers have opted out of vape shipping shows us that they are only interested in the drop-and-run delivery model. They are not confident in their ability to deliver to a person 21 years or older,” explains Vinuelas. “That’s where X Delivery comes in; we have a network of dedicated individuals who take the PACT Act seriously. We are dedicated to ensuring compliance and protecting youth from obtaining these products. It takes a bit more effort to perform our deliveries and audit them for PACT Act compliance, but we think it’s worth it.”
X Delivery has the capability to ship products to consumers nationwide and can currently deliver to about 90 percent of the U.S. population for vaping products. Vinuelas told Vapor Voice that the company is working to increase its coverage to 100 percent of the country as soon as possible.
“Our final-mile delivery partners are required to check IDs and obtain adult signatures. From an end-customer’s perspective, ordering from an online merchant that ships via X Delivery is just like getting an order from an online merchant that ships with a household-name shipping carrier: You get tracking updates from the moment your order is placed all the way through to your delivery,” says Vinuelas. “We take it a step further and work to notify customers when their package is arriving soon to make sure they are home to receive their package.”
X Delivery was started by CEO Chris Guggenheim, who has a storied career in the entertainment and ecommerce technology industries. These experiences led Guggenheim to invest in technology that drives commerce and opened “X.” The technology company X powers X Delivery, and there are more offerings that will come to market over time under the X umbrella. In 2019, his highest-volume clients asked for help solving challenges they were facing regarding delivery. The technology company soon began supporting the high-tech nationwide shipping carrier X Delivery, which Guggenheim started in early 2020. In just six months after beginning operations, X Delivery delivered more than 10 million packages within a two-day average delivery time nationwide. The company began shipping vape products in late 2020.
“Over the last 6 months, we have partnered with vape companies to build a fully compliant shipping carrier service leveraging our existing technology and logistics capabilities,” explained Vinuelas. “We appreciate the seriousness of these residential deliveries and our local, state and federal regulation compliance efforts have been exhaustive yet successful.”
The knowledge gained running X helped Guggenheim solve a variety of retail issues for merchants, according to Vinuelas. “When we began to pilot our service in 2019, we realized that building technology from the ground up was the only way to support high-growth D2C [direct-to-consumer] e-commerce businesses long term,” he said. “When we talk about the value of X Delivery, it is to improve customer experience, sales conversion and to enable merchants to experience peak performance from one warehouse.”
X Delivery’s official slogan is “Reimagine Delivery.” X Delivery has an unofficial slogan too: Fix logistics. The purpose of X Delivery is to “simplify package delivery through technology, reliability, speed and price,” according to the company’s website, xdelivery.ai. Vinuelas says the company has developed a new approach to logistics by leveraging in-motion supply chain assets, from empty warehouses to local delivery services, and connecting them to new technology.
“Most e-commerce merchants will not be able to accurately answer how much it costs them to ship a package. Many e-commerce merchants incorrectly believe that running an operation out of multiple warehouses will help them take advantage of faster shipping and lower costs. This is not true, and this is what is broken,” explains Vinuelas. “Shipping carriers need to understand that all customers should get the same service no matter where they are shipping from or where they are shipping to in the U.S. This is our purpose in the market today. I’m also going to add that it shouldn’t take a Ph.D. to figure out what it will cost a merchant to ship in the U.S. Shipping carriers need to stop with the extra fees, fuel surcharges, Covid-19 fees, etc. We have done that.”
Paul Vinuelas
X Delivery uses an application programming interface (API) to help streamline its shipping process. An API is a set of protocols that sync up data in real-time across various platforms by allowing the backends of software and applications to communicate with each other over the internet.
According to the X Delivery website, with the help of an API, one program (application A) can “call” another program (application B) to access its data or functionalities. For example, users can see data from application A via application B’s interface without manually transferring the data from one program to another. API integrations allow users to automate processes across various digital applications to make the flow of information seamless and instantaneous.
“APIs allow companies to integrate shipping functionality directly into their system or other platforms so they can customize the interfaces to improve productivity and expand fulfillment capabilities while minimizing errors and delays associated with manually transferring data,” the website states. “Our API drives the future of logistics management. We help you simplify package delivery through technology, reliability, speed and price by leveraging in-motion supply chain assets to give you the best shipping options available in real-time.”
Currently, X Delivery is only shipping for customers with a minimum of 500 packages a day, shipping out of one warehouse with a weight limit of 10 pounds; however, Vinuelas says that the company is working on lowering the minimum package threshold. “We are working hard to eventually offer our service to smaller companies,” he said. “For now, we have partnered with several carefully selected fulfillment companies to help those (smaller) companies tap into the X Delivery network.”
Shipping with X Delivery will be slightly more expensive than shipping with the big-name delivery services but not much more than the cost of USPS delivery with adult signature collection. A 1-pound package costs approximately $6–$7, depending on the amount of packages shipped, and a 10-pound package costs approximately $10–$11 with X Delivery. Those costs are expected to decrease as the network broadens and more companies start shipping through X Delivery, according to Vinuelas.
Moving forward, X Delivery is dedicated to optimizing delivery routes. By joining the X Delivery team, businesses have access to multiple delivery options from anywhere in the country.
“We understand that nothing we say will earn trust better than showing results. We are 100 percent transparent with our clients and their end-customers. We also make it easy for anyone to try us out. Once you try us, you will understand how logistics should work, and you will never want to go back to the old way,” says Vinuelas. “Our long-term goal is to be the No. 1 shipping carrier for D2C ecommerce brands. Vape and e-cigarette merchants want to partner with people who understand the relevant laws in detail and will be a good partner to them. We are that partner.”
May 9, 2021
The People’s House

Montana vape shop owner Ron Marshall is taking the right to vape to a whole new level.
By Maria Verven
Ron Marshall, who owns Freedom Vapes with three vape shops in Montana, is taking the right to vape to the people’s house. Marshall ran for election to the Montana House of Representatives and won in the general election last November. A Republican, Marshall assumed office in January and will represent District 87—a section in the far western region of the state—for the next two years.
Even before he took office, Marshall worked on two pro-vaping bills—B106, which seeks to prohibit expansion of the Montana Clean Indoor Air Act, and HB137, which seeks to revise the laws around vaping and alternative nicotine products. “Writing laws should be done in this house—the people’s house,” Ron Marshall told members of the House Human Services Committee during a hearing at the state capitol in January.
Making a Difference at the State Level
Although the U.S. Food and Drug Administration classifies vapor devices as tobacco products, Marshall’s bill HB137 seeks to differentiate the two. If passed, the bill would cancel bans on indoor vaping and on the sale of flavored nicotine solutions as well as previous anti-vaping regulations enacted by various counties and cities in Montana.
In short, the bill would prevent the state of Montana from regulating the sale, manufacture, flavoring, marketing, product display, public exposure and access to “alternative nicotine products or vapor products.” Opponents said the bill would prevent individual communities from deciding what is best for them and that enacting the legislation would result in increased use of the addictive flavored nicotine products by young people.
Vapers and vape shop owners gave passionate testimony in favor of the bill, asserting that the state legislature should adopt rules for businesses that ensure reliable access to vapor devices, which are primarily used by smokers to help them quit combustible cigarettes. “Everyone that owns vape shops share the same mission as myself and my family—to help people whom everyone has forgot[ten] about—the daily smokers,” testified Keith Bowman, part owner and general manager of six e-cigarette vape stores in Montana.
Fighting an Uphill Battle
In 2019, the Montana Department of Public Health and Human Services enacted an emergency rule prohibiting the sale of flavored e-cigarettes. Last November, the city of Missoula became the first in the state to permanently ban the sale of flavored e-cigarettes. The state health department also proposed a permanent statewide ban on flavors but ultimately backed down after facing pushback from legislators. Nearly a dozen counties in Montana prohibit indoor vaping.
Ron Marshall / Credit: State of Montana
These anti-vape policies have harmed vape businesses across the state, Marshall said. “During the 2019 session, we defended against eight anti-vaping bills around taxes and clean indoor air. It was out of control,” he said. “We have no problem with sales to customers 18 years or older. The shops had already been doing that without being told. We wrote our own bill to curb youth access through store purchases. It didn’t make it out of committee, but the seeds had been sown.
“Our problem is being called a tobacco product. We are not. Our bill separates tobacco products from alternative nicotine products. We aren’t the same by law in Montana,” he said, explaining that they pay $5 each year to the Department of Revenue for a license to sell alternative nicotine products.
Marshall finally decided to take the fight to the people’s house and ran for the House of Representatives in his district.
“Our current representative termed out, and the seat was open. After a three-way primary and general election, we won! It was a great feeling and a sobering experience,” he said. “The experience you have in everyday life is transmitted to how I look at legislation. If it sounds fishy, it probably is. Ask tough questions. Every time you vote on a bill, it will change someone’s life.”
The Joy of Helping Others Quit Smoking
The Marshalls started their vape business in 2014 after Ron’s wife Deanna suffered from a bad respiratory infection. “She used a disposable V-2 device that someone had recommended, and it worked great for her. After about 10 days, the infection healed. She tried to smoke a cigarette, but it was so disgusting, she couldn’t do it.
“Being a smoker myself, I gave it a try,” Marshall said. “It was good, but not great. Deanna searched the internet looking for something better and found it in the form of SMOK Ego pens. We gave them a try, and it was perfect for both of us. It took me about 10 days to quit smoking completely.
“After that, several people asked us how we did it. The answer was simple. The hard part was accessibility. There were no vape shops in Montana.”
So, in February 2014, the Marshalls opened their own vape shop. “It was slow at first. Deanna put all her time and energy into it. I was only able to be in the shop two days a week,” Marshall said. “But after it took off, it was great. The joy of helping others get away from smoking and improving their lives was a reward that cannot easily be explained.”
Freedom Vapes now has 10 employees with stores in three locations—Hamilton, Missoula and Belgrade. The Marshalls said most of their customers vape as a way to wean themselves off combustible tobacco products. While they and other vape shops refuse to sell products to anyone under age 18, young people can still buy products online, Marshall said.
And while all of Freedom Vape’s flavorings are water-based, online products can potentially contain harmful contaminants. Still, other vapers may resort to mixing their own vape juice if a ban goes into effect.
“That’s very dangerous,” Marshall said. “If they don’t get the right flavoring or use oil-based materials, they can harm themselves. We tell our customers not to buy anything off the street or use any product if they don’t know its source. This ban won’t make the problem go away. It will make it more of a problem.”
Perspective From the ‘Inside’
Marshall said it’s totally different being on the “inside.” “It’s a whole different outlook. I spend lots of time in committee hearings on lots of issues. Plus, you need to draft your own legislation and get it through the system.”
Marshall had worked on his bill HB137 even before he was elected. After the election, a legislative drafter contacted him to ask what section of the Montana code the bill dealt with. A rough draft was sent back to him for input and adjustments before going through legal and other reviews.
“Once it was done, I signed the bill, and then it was off to committee assignments. The committee’s job is to look at the intent of the bill. The intent of HB137 is simply to prevent local cities, counties or state bureaucrats from banning a legal product. It defines and categorizes flavors and definitions of alternative nicotine products and vapor products.”
HB137 then made its way out of committee and on to the floor of the House. When the hearing was held in the House Health and Human Services committee, it was loaded with all the ANTZ (anti-vaping) groups. “It was easier for them to load the hearing with opponents—most of whom were from out of state—because they had to use Zoom during this Covid stuff. We have heard this all before. Nothing new here,” Marshall said.
Montana’s 100 lawmakers then debated it on the floor. “It was tough, but it made it,” Marshall said. The vote was 62 in favor and 37 opposed. “Some of the opposed injected their own personal beliefs into the vote. That is bad policy. You should not dictate your lifestyle on others.
“As a representative of the people, it is their—the people you represent—decision. If HB137 makes it through the Senate and to the Governor’s desk, it will make sure that the people of Montana have access to a product they want.
“It will ensure that small businesses won’t be shut down and closed. Montana will be a vape-friendly state for both consumers and business owners.”
The original “Vaping Vamp,” Maria Verven owns Verve Communications, a PR and marketing firm specializing in the vapor industry.
May 8, 2021