Tag: Chowdhury

  • Confusion Continues to Cloud Proposed Nicotine Tax

    Confusion Continues to Cloud Proposed Nicotine Tax

    Credit: Leo Lintang

    Experts say Congress’ latest attempt to tax nicotine is complicated, confusing and harmful to public health.

    By Timothy S. Donahue          

    To help pay for an infrastructure bill, the U.S. Congress has again introduced an excise tax on next-generation nicotine products, such as e-cigarettes and snus. The excise tax would apply to nicotine vapor products using both natural and synthetic nicotine as well as nicotine pouches. Experts say the provision, which would ultimately be paid by tobacco consumers, goes against U.S. President Biden’s campaign promise to not increase taxes on those making less than $400,000, negatively impact tobacco harm reduction efforts, increase sales of combustible tobacco products and boost an already growing black market.

    The nicotine tax has been removed and reintroduced to Biden’s Build Back Better (BBB) legislation at least three times. The proposed vapor tax provision is now part of the latest version of the administration’s social spending and climate bill. According to Ulrik Boesen, a senior policy analyst with the Center for State Tax Policy at the Tax Foundation, taxes on tobacco and nicotine products tend to serve at least two purposes: to improve public health and raise revenue. He claims that a nicotine tax could do that if it is properly designed.

    Ulrik Boesen / Credit: Tax Foundation

    “A good design means internalizing externalities related to consumption of a product,” Boesen stated. “With tobacco and nicotine product consumption, these externalities are the health risks connected to frequent use and [the] quantity consumed. Nicotine is the addictive substance in the products but not the harmful ingredient. In other words, the proposal does not target the harmful behavior directly.”

    Taxing based on nicotine content would favor low-nicotine liquids and could encourage increased consumption in the quantity of liquid, according to Boesen. “For example, a vapor pod that has a nicotine content of 3 percent and contains 1 mL of liquid would be taxed at $0.83 whereas a vapor pod that has a nicotine content of 5 percent and also contains 1 mL of liquid would be taxed at $1.39 even if there is no difference, or even a negative differential, in broader health effects of the two pods,” he states, adding that the effects of the tax are most substantial for nicotine pouches, such that the category is unlikely to survive.

    Other estimates show that a 60 mL bottle of e-liquid with 12 mg of nicotine e-liquid would be taxed at $20.02. A four-pack of 8 mL pods with 5 percent nicotine salt pods would be taxed at $4.45 and a 15-pouch can of 8 mg nicotine pouches would be taxed at $3.34 (alongside state and local taxes, the cost of a single can could grow to $20 in some states).

    Bryan Haynes, a partner with the law firm Troutman Pepper who specializes in tobacco and vapor regulations, said that, at a minimum, the proposed nicotine tax is “a hastily written addition” that will “have a negative impact on tobacco harm reduction efforts and public health.” He said that it’s the first time the tobacco industry has seen an excise tax placed on an ingredient instead of a finished good. “This is an unprecedented type of tax that will ultimately drive former smokers back to combustible products,” said Haynes, adding that taxing an ingredient could also cause unforeseen issues for manufacturers, such as moving material between factories.

    Bryan M. Haynes
    Bryan Haynes / Credit: Troutman Pepper

    “If a company is producing nicotine or even synthetic nicotine, moving product from one factory to another could trigger the need for an Alcohol and Tobacco Tax and Trade Bureau (TTB) license, and when product is removed, so to speak, from their factory, they would be responsible for remitting the taxes,” explained Haynes. “There may be a way, for example, if the company removed the nicotine from their factory and transported it in-bond to another TTB factory that you could make that work. But it’s just not clear. There is the potential for a lot of unforeseen issues to arise the way the tax is currently being proposed.”

    States often tax nicotine products by its cost. Boesen says the tax on the product will pyramid since the federal tax would be levied at the manufacturer level and the state tax is levied at the distribution level. “In effect, the state tax base includes the federal tax and becomes a tax on a tax. This means that even if the taxes on tobacco and other nicotine products are approximately equal at the federal level, by the time it reaches the consumer, the nicotine product will carry a higher tax (and often a higher price),” he states. “This is highly problematic when considering that cigarettes are much more harmful than nicotine products. That makes the federal tax proposal look like a harm-maximizing strategy.”

    Credit: Tax Foundation

    The bill also subjects synthetic nicotine products to the nicotine tax. Many in the industry have expressed concern that this provision could allow the U.S. Food and Drug Administration to assert authority over the substance. Synthetic nicotine is covered not only in the proposed tax bill but also in the Prevent All Cigarette Trafficking (PACT) Act, which bans the U.S. Postal Service from mailing any vaping products.

    Azim Chowdhury, a partner at the law firm Keller and Heckman who specializes in vapor, nicotine and tobacco product regulation, said that’s just not possible and Haynes agrees. “The definition of a tobacco product in the Tobacco Control Act (TCA) is clear. It’s just not ambiguous; a product must be made or derived from tobacco, or a component or part of a tobacco product, to be a tobacco product,” said Chowdhury. 

    azim-chowdhury
    Azim Chowdhury

    “Congress would have to change the Tobacco Control Act’s definition of a tobacco product in order to give FDA’s Center for Tobacco Products the authority to regulate synthetic nicotine products as tobacco products. That won’t happen overnight. I also see a scenario where synthetic nicotine could be regulated as a drug and that would be a whole different and more onerous regulatory regime.”

    The FDA could, however, cite the inclusion of synthetic products in the PACT Act and the latest nicotine tax proposal in its lobbying efforts to change the TCA’s definition of tobacco, said Haynes. “I could see the FDA telling Congress, ‘You just amended the Internal Revenue Code to make these products subject to federal excise taxes just like tobacco-derived nicotine, so it’s not a big stretch to amend the Tobacco Control Act’ in the same way,” he explains. “That’s how I would do it. It’s not really a legal argument, but it could be a decent lobbying argument.”

    It isn’t just vapers, business owners and attorneys that find fault with the proposed nicotine tax; researchers suggest the tax could also harm public health. Michael Pesko, an associate professor in the Department of Economics at Georgia State University, used a $1.4 million dollar grant from the National Institutes of Health (NIH) to conduct e-cigarette policy evaluation research, including the evaluation of e-cigarette taxes (Pesko receives no funding from the tobacco industry or related groups). Pesko found that e-cigarettes and other nicotine vaping products function as what economists call “substitutes” for conventional cigarettes.

    “In practical terms, if e-cigarettes and cigarettes are substitutes, then raising the price of one on average leads people to increase use of the other. Given extensive peer-reviewed evidence indicating that these products are substitutes, an unintended but inevitable effect of increasing taxes on e-cigarettes is to increase cigarette use,” Pesko said. “Given that cigarettes are believed to be substantially more harmful than e-cigarettes, this effect on [combustible] cigarette use is concerning …. A wide array of research suggests that this boost in cigarette use as a result of large e-cigarette tax increases would significantly increase overall tobacco-related death and disease.”

    Michael Pesko / Credit: GSU

    These findings prompted Pesko to send a letter to Congress concerning the proposed vape tax. In the letter, he states that his research team’s economic evaluations of existing state and county e-cigarettes taxes found that increasing e-cigarette taxes to parity with the combustible cigarette tax rate would “sizably increase cigarette use across teens, adults and pregnant women compared to taxing tobacco products differentially in proportion to their health risk.”

    Pesko said researchers found several concerning consequences of large e-cigarette tax increases:

    • Simulating the current bill’s e-cigarette tax on teen tobacco use indicates that this policy would reduce teen e-cigarette use by 2.7 percentage points but that two in three teens who do not use e-cigarettes due to the tax would smoke cigarettes instead. This would result in approximately a half million extra teenage smokers overall. This finding that teens substitute to cigarettes in response to e-cigarette taxes has also been documented using National Youth Tobacco Survey data.
    • The tax would raise the number of daily adult cigarette smokers by 2.5 million nationally and reduce adult e-cigarette users by a similar number.
    • For every e-cigarette pod eliminated by an e-cigarette tax, more than 5.5 extra packs of cigarettes are sold instead.
    • For every three pregnant women that do not use e-cigarettes due to an e-cigarette tax, one smokes cigarettes instead (study).

    Pesko told Vapor Voice he was surprised to find that increased e-cigarette tax consistently resulted in substitution across various data sources. “And the magnitudes are fairly sizable,” he noted. “This is an unusual level of accordance for academic research.” Pesko believes that any tax on nicotine products should be based on quantity.

    Boesen agreed. He stated that for vapor products, the “obvious choice” is taxing the liquid by volume (per mL), and for nicotine pouches, a tax by weight or per pouch is a straightforward solution. “It is the administratively simplest and most straightforward way for the federal government to tax these goods as it does not require valuation and as such does not require expensive administration,” he stated. “The nicotine tax proposal in the Build Back Better Act neglects sound excise tax policy design and by doing so risks harming public health. Lawmakers should reconsider this approach to nicotine taxation.”

    Chowdhury said that the industry must do more and that interested stakeholders and consumers should reach out and push back on the nicotine tax because it will be devastating to the vapor industry. “It seems like the general industry feels like [this nicotine tax] won’t get through somehow, that some people will prevent it from being in the final bill, but I think it’s a huge risk,” said Chowdhury. “Without serious pushback, it could end up there; it could very well end up becoming law.”

    Haynes said that if the nicotine tax bill ever makes it to Biden’s desk, “he’s going to sign it.”

  • Consumer’s Choice

    Consumer’s Choice

    INNCO works with consumer advocacy groups to promote tobacco harm reduction around the globe.

    By Timothy S. Donahue

    Most of the world’s cigarettes are consumed in low-income to middle-income countries (LMICs). From Armenia to Zambia, these countries can also have high rates of adolescent smoking, particularly among males. Rates in some countries can reach as high as 46 percent, according to the U.S. National Institutes of Health. Research suggests that 80 percent of the world’s combustible cigarette users are in LMICs.

    While numerous studies have shown otherwise, the World Health Organization (WHO) has long insisted that less risky nicotine products, including vapor products and e-cigarettes, are as harmful and dangerous as combustible tobacco products and should be banned or heavily regulated. The International Union Against Tuberculosis and Lung Disease (The Union), a Bloomberg partner for The Initiative to Reduce Tobacco Use, published its fourth position statement on e-cigarettes last year. It called for a blanket ban on all electronic nicotine-delivery systems (ENDS) and heated-tobacco products (HTPs) in all LMICs. These organizations, typically through groups funded by Michael Bloomberg, the billionaire anti-smoking advocate, will often donate millions of dollars to poor or struggling countries if governments agree to ban or heavily restrict access to less risky products.

    As a result of policies based on false information from organizations such as The Union and the WHO, nicotine consumers in LMICs often have no delivery system available other than combustible products. Experts say that the lure of massive amounts of funding is just too great for such countries to resist.

    The International Network of Nicotine Consumer Organisations (INNCO), a global advocate for sensible tobacco harm reduction (THR), states in a recent position paper that bans on ENDS are overly simple solutions that make the problems that come with combustible cigarette use worse. It also states that reduction and substitution are valid goals for smokers in LMICs as replacing combustible tobacco with alternative nicotine products can reduce risk of harm by at least 95 percent.

    “The hundreds of millions of people who smoke in these countries should have the ability to make decisions about safer nicotine products, particularly when their own health is on the line,” said Samrat Chowdhery, president of INNCO’s governing board. “Overly simplistic policy solutions, such as proposed bans on all ENDS and THR products by the Bloomberg Philanthropies-funded The Union, are being offered as a blunt and impractical tool for a situation that requires pragmatism and nuance.”

    The need for INNCO

    INNCO was founded in 2016 to build cooperation between the growing number of global associations that advocate for THR. An organization can join INNCO if they are nonprofit, consumer-controlled and focused on tobacco harm reduction. The organization has 40 members in 35 countries, including the U.S.-based Consumer Advocates for Smoke-free Alternatives Association, a well-established advocacy group that raises awareness and protects the rights of consumers to access reduced harm products. INNCO also has members from Canada, Denmark and Greece to the Philippines, Brazil and Kenya.

    The organization continues to grow. “We are enlisting new members in several countries,” Chowdhery told Vapor Voice after the release of the position paper in March. “We are helping consumers form organizations where there are none. Africa came on board, where we have four, five members from that region this year, and since 80 percent of smokers do live in LMICs, it’s an additional focus that we have developed. It is something that, with this paper, we want to really say, ‘OK. We want to participate in discussions on these issues in LMICs.’”

    Samrat Chowdhery

    When The Union released its position paper calling for outright bans, Chowdhery says the recommendations were discriminatory. It was centered on the idea that if LMICs would not be able to enforce regulations, the only other option was a total ban on reduced-risk products.

    “They were not very mindful of the situation where if you could not regulate, it’s likely that you will also not be able to enforce a ban either. We know this because it’s what has happened in Mexico, Brazil and Thailand, where there have been bans, but products are very easily available,” explains Chowdhery. “If they would have instead implemented some sort of a regulatory control, you could ensure that there are product standards, they’re not sold to minors … but only having them available on the black market, those controls are not there, and you end up increasing the level of population harms to health.”

    Typically, when organizations like the WHO or United Nations develop policy, the organizations involve the industry stakeholders. After all, these are the people and businesses that the policies impact, says Chowdhery. Tobacco is the only industry that consumers and stakeholders do not have a say in policymaking.

    “The media should be taking this up. There is some trickery here,” he says. “The way the debate has been developed and the way Article 5.3 is getting misused all the time—it is a tough fight, but we’re up for it … we have our lives in the balance.” Article 5.3 of the WHO Framework Convention on Tobacco Control (FCTC) states that when setting and implementing their public health policies with respect to tobacco control, “Parties shall act to protect these policies from commercial and other vested interests” of the tobacco industry. Many anti-tobacco organizations have interpreted this as a ban on all interactions with the industry.

    Words of reason

    In the paper, INNCO claims that blanket bans on vaping and HTPs are a detriment to LMICs. The report, “10 Reasons Why Blanket Bans of E-Cigarettes and HTPs in low-[income] and middle-income Countries (LMICs) Are Not Fit for Purpose,” warns policymakers that limiting nicotine consumption options to reduce harm will only increase the number of people smoking combustible tobacco. The paper lists the following reasons:

    • Bans are an overly simplistic solution to a complex issue and will not work.
    • Prioritizing the banning of reduced harm alternatives over cigarettes is illogical.
    • Reduction and substitution are valid goals for smokers in LMICs.
    • People who smoke have the right to choose to reduce their own risk of harm.
    • Reduced harm alternatives can significantly contribute to the aims of global tobacco control.
    • Lack of research in LMICs is not a valid reason to ban reduced harm alternatives.
    • The prohibitionist approach in LMICs is outdated, unrealistic and condescending.
    • Bans will lead to illicit markets with increases in crime and no tax revenue.
    • Banning reduced harm alternatives leads people back to smoking and greater harm.
    • Blanket bans in LMICs are a form of “philanthropic colonialism.”

    INNCO says many LMICs risk an increase in smokers as a result of their policies. Leveraging the paper’s findings, INNCO states that it will work with its global membership to inform policymakers in developing nations to help achieve risk-relative regulations and access to THR products

    “Africa is home to some of the highest-ranked smoker countries on the planet,” said Joseph Magero, chairman of the Campaign for Safer Alternatives, a pan-African nongovernmental member organization dedicated to achieving 100 percent smoke-free environments in Africa. “While improving overall public health has made great strides in these regions, efforts to directly address smoking cessation and harm reduction strategies have lagged due to limited or no access to safer, noncombusti[ble] nicotine products. By denying smokers access to much safer alternatives while leaving cigarettes on the market, policymakers would leave only two options on the table—quit or die.”

    Nancy Loucas of the Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA), a grassroots alliance of THR advocacy organizations and an INNCO member, said a blanket ban in LMICs is a form of philanthropic colonialism, suggesting that these countries and their citizens cannot be trusted with any level of self-determination. “Inhabitants are treated as second-class citizens, which is offensive,” she said. “There is no benefit in limiting choice of safer nicotine products but only the potential for increasing harm.”

    Samsul Arrifin, president of the Malaysian Organisation of Vape Entities (MOVE) and an INCCO member, concurred with the INNCO assessment, saying that “any move to deprive smokers and consumers of better alternatives to cigarettes, such as vapes, would only contribute [to] the problem that [it] seeks to address.”

    Francisco Ordonez of the Asociacion por la Reduccion de danos del Tabaquismo Iberoamerica, a network of consumer organizations in Latin America and an INNCO member, says that few LMICs have adopted even the most basic prevention measures suggested by the WHO. “Policymakers should embrace harm reduction as a valid goal, particularly in LMICs where access to cessation programs is extremely limited,” said Ordonez. “Replacing combustible tobacco with alternative nicotine products can significantly reduce the risk of harm by at least 95 percent. It works in industrialized nations and can do the same in LMICs.”

    The Bloomberg conundrum

    Much of the ire of the THR community is reserved for Bloomberg Philanthropies (BP). In September 2019, Bloomberg and Matthew Myers, president of the nonprofit Campaign for Tobacco-Free Kids, launched a $160 million three-year campaign to end what they described as an epidemic of e-cigarette use among kids. The campaign is supported by several large nonprofits, like the Truth Initiative, American Cancer Society, American Heart Association and American Lung Association. Together, the organizations are pushing for a national ban on flavored ENDS products in the U.S.

    Chowdhery says that Bloomberg is using philanthropy in an unprecedented manner. “I’ve not seen anyone do this. This is so insidious. You have Bloomberg-funded attack groups,” says Chowdhery. “They were anti-smoking for a long time until these new [reduced-risk] products came on the market. Then they expanded their focus to become anti-nicotine … they are becoming more and more radicalized, proposing more and more extreme ideas as we go along. You have groups that their only stopping-tobacco tactic is just attacking people. That’s their job. That’s all they do.”

    Bloomberg, both as an individual and through his foundation, has committed nearly $1 billion to combating tobacco use worldwide, most of it focused on LMICs, according to BP. “These policies are what we call philanthropic colonialism because they’re just pushing an idea they have, an idea a New York billionaire has, on countries, which may not be suited for this,” explains Chowdhery. “He’s not proposing those policies [total bans] in the U.S.”

    Chowdhery says Bloomberg and his charities spread lies and disinformation without any regard for the negative impact on public health. During an appearance on CBS News, Bloomberg suggested vaping lowers IQ, even though there is no evidence about a relationship between nicotine use and intelligence.

    Chowdhery hopes the INNCO position paper will be read by the policymakers working with Bloomberg. “That was the main objective of the paper: to reach out to policymakers, reach out to media and professionals and let them know … what is being proposed has another side to it,” said Chowdhery. “See, this is a David and Goliath problem. What they have are well-funded organizations to push this narrative. And what they also have is credibility because a lot of this is coming from [well-known nonprofit groups]. Even if they publish a paper with lots of misinformation and have a disclaimer: ‘We received a million dollars from Bloomberg but that did not influence our work.’ That is a big problem.”

    The push forward

    The pandemic hit INNCO hard. Chowdhery, a former journalist, founder of the Council for Harm Reduced Alternatives and the director of the Association of Vapers India, was approached to head INNCO in July 2020. He said the organization had a lot of plans for the year, including regional meetings and setting up networks, projects that required a lot of on-ground activities. Then everything needed to be scaled back. The year 2020 became about recalibrating INNCO’s efforts. “The year was full of uncertainty and adapting and doing things differently. We did a lot of online meetings and a lot of internal objectives online,” said Chowdhery. “We enrolled more members. When we put out a call for a CEO, we got 400 resumes.”

    Chowdhery says that the main goal for INNCO now is to have a say in policymaking and be recognized as a legitimate stakeholder in this tobacco control intervention. It won’t be easy. Already, groups funded by Bloomberg are trying to discredit INNCO. “Our strength is our membership base. They are organizations that might be poor but [are] passionate, and they are volunteering their time and effort[s]. That is the real strength, and we need to leverage that and get everyone on the same platform so that we speak with common messaging,” says Chowdhery. “This is the first year that we actually have a budget to do our work. Unfortunately, we’ve not started because of Covid-19. We’re getting a new CEO, who should be with us soon. Things are looking really good.”

    In a recent essay in the journal Science, “Evidence, Alarm and the Debate Over E-Cigarettes,” five experts in public health state that it is a mistake to restrict access to vaping products while leaving deadly cigarettes on the market. The authors include Cheryl Healton, the former chief executive of the Truth Initiative, who is dean of the New York University school of public health, as well as the deans of the schools of public health at Ohio State and Emory universities. The essay concludes: “Careful analysis of all the data in context indicates that the net benefits of vaped nicotine products outweigh the feared harm to youth.”

    Chowdhery says that 15 years ago, there were no groups championing tobacco consumer rights. It’s now, when safer means of consuming nicotine are available, that consumers want to have access to them. “We consider that a right. This campaign of misinformation and regulatory overreach is a disaster waiting to happen,” says Chowdhery. “People in tobacco control, they’re earning paychecks to develop a policy which they then get passed through Parliament somewhere and they believe their work is done and they go home. The problem is, did legislation stop the use of that product that day? No, it just went underground. It became riskier. Now, it’s costing people their lives.”

  • US Post Office to Publish ENDS Mailing Rules Feb. 19

    US Post Office to Publish ENDS Mailing Rules Feb. 19

    The United States Postal Service (USPS) is scheduled to publish in the Federal Register its rules for mailing electronic nicotine-delivery system (ENDS) products tomorrow, Feb. 19. The unpublished rule states “that the prohibition on mailing ENDS will apply immediately ‘on and after’ the date of the final rule.”

    mailtruck
    Credit: F. Muhammad

    However, the Preventing Online Sales of E-Cigarettes to Children Act, which placed ENDS under the PACT Act, was enacted on December 27, 2020 and becomes effective 90 days after enactment (March 27, 2021). The USPO 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;
    • Public Health: limited shipments by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.

    Many business were unsure if B2B mailing would be allowed. The unpublished rules say they will be allowed. According to Azim Chowdhury, a partner at Keller and Heckman, the PACT Act has historically exempted businesses-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.

    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 (APO), Fleet Post Office (FPO), or Diplomatic Post Office (DPO) locations and destined to addresses in the United States. Because of this inability, all ENDS products “in such mail are nonmailable, without exception.”

    In addition to the non-mailing provisions, the PACT Act requires anyone who sells cigarettes or smokeless tobacco to register with the ATF and the tobacco tax administrators of the states into which a shipment is made or in which an advertisement or offer is disseminated, according to Chowdhury. Retailers who ship cigarettes or smokeless tobacco to consumers are further required to label packages as containing tobacco, verify the age and identity of the customer at purchase, use a delivery method (other than USPS) that checks ID and obtains an adult customer signature at delivery, and maintain records of delivery sales for a period of four years after the date of sale, among other things.

    Excluded from the statutory definition are products approved by the U.S. Food and Drug Administration (FDA) for sale as “tobacco cessation products or for other therapeutic purposes and marketed and sold solely for such purposes.” The USPO 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.”

  • Small Vapor Businesses to Bear Brunt of U.S. Mail Ban

    Small Vapor Businesses to Bear Brunt of U.S. Mail Ban

    US mailbox

    The outlook for many small vapor companies and online retailers looks bleak following the enactment of new rules that prohibit the U.S. Postal Service (USPS) from shipping e-cigarettes, according to Keller and Heckman’s Azim Chowdhury and Galen Rende.

    Writing on The Continuum of Risk law blog, the attorneys discuss the fallout of a recent amendment to the 2009 All Cigarette Trafficking (PACT) Act.

    In late December, Congress overturned a veto from former President Trump and voted into law a $2.3 trillion coronavirus relief and government funding bill that contains a provision banning the USPS from delivering vapor products. The USPS was already prohibited from delivering cigarettes and smokeless tobacco products to consumers under the PACT Act. The law passed in December extends the Act’s original definition of “cigarette” to include electronic nicotine delivery systems (ENDS).

    azim-chowdhury
    Azim Chowdhury

    Tobacco and vapor companies may use private services to ship their products to consumers, but the PACT Act requires them to register with the Bureau of Alcohol, Tobacco, Firearms and Explosives and the tobacco tax administrators of the states into which a shipment is made. Delivery sellers are further required to verify the age and identity of the customer at purchase and maintain records of delivery sales for a period of four years after the date of sale, creating substantial administrative burdens.

    Critically for the vapor industry, the most popular carriers, Federal Express and United Parcel Service, have recently announced that they would cease all deliveries of vapor products.

    The prohibition on the mailing of ENDS is scheduled to take effect after the USPS promulgates regulations clarifying the mail ban, which it is required to do within 120 days of the enactment—i.e., by April 27, 2021.