Tag: USPS

  • Logistical Nightmare

    Logistical Nightmare

    Credit: Markus Spiske

    Postal regulations and shipping bans create major roadblocks for smokers trying to quit combustibles.

    By Maria Verven

    As the saying goes: When the going gets tough, the tough get going.

    Thanks to the Preventing Online Sales of E-Cigarettes to Children Act that passed last year, retailers have had to hustle to deliver vapor products to their customers.

    All the major shipping vendors, from the U.S. Postal Service (USPS) to the leading nongovernmental carriers—UPS, FedEx, DHL—have stopped shipping vaping products containing nicotine or cannabis to avoid violating the 2007 Prevent All Cigarette Trafficking (PACT) Act.

    Although some alternative logistic solutions have emerged and the USPS has made some exceptions for business-to-business shipments, delivering vapor products to consumers remains a huge challenge—especially for customers who live outside of major metropolitan areas.

    Some smaller retailers simply called it quits.

    “We stopped shipping when the USPS ban went into effect,” said Char Owen, CEO of Cloud 9 Vapor Shop. Cloud 9’s two shops in Seguin, Texas, and Kenedy, Texas, are 40 miles and 60 miles, respectively, from San Antonio. She said the software to track shipments was too expensive, adding that some quotes were as high as $100,000. Even quotes that were closer to $20,000 put this option out of reach. 

    “And if we didn’t use software, we would have to hire a person to keep up with it, and that wasn’t within our reach either,” she said. “We are two small stores, and we’re not big shippers, but our stores are in areas where customers might have to travel over an hour to get to us. With current gas prices, it would absolutely be cheaper to ship; however, we can’t afford that option anymore.”

    While Owen said her stores haven’t taken a big hit, the PACT Act had a huge impact on the customers they used to send shipments to. “It’s the remote vaper that got hurt in this case,” she said.

    Exceptions to the rule

    Credit: Hakinmhan

    It’s rare, but business and regulatory exemptions to the PACT Act have been made.

    Pure Labs, parent company for Halo vaping products, sought and obtained approval by the USPS to ship e-liquid and other vaping products to other compliant businesses. The approval allows Syndicate Global Distribution and Halo Wholesale Direct to ship Halo electronic nicotine-delivery system (ENDS) products directly to their brick-and-mortar retail customers—a huge win for Halo.

    “Halo’s tobacco and menthol vape products are in demand by adult consumers throughout the country, and we are excited to have USPS solidify the supply chain,” said Kevin Dietz, director of Halo brand sales, adding that several of Halo’s ENDS products are in the final stages of the U.S. Food and Drug Administration’s premarket tobacco product authorization process.

    Unique challenges

    Filling the shipping void are companies such as X Delivery, which promises to satisfy all PACT Act requirements, including verifying the purchaser’s age and obtaining a signature from an adult aged 21-plus upon delivery. Other restrictions—such as the maximum weight requirement (no more than 10 pounds), requisite stickers indicating that the package contains a “tobacco” product and a notice that the recipient is required to pay taxes on the purchase—must be met.

    “All shipping has unique challenges. The fact that the national carriers opted out of shipping vape products shows us that they’re only interested in the drop-and-run delivery model,” said Paul Vinuelas, chief logistics officer for X Delivery. “We are dedicated to ensuring compliance and protecting youth from obtaining these products. While it may take a bit more effort to perform our deliveries and audit them for PACT Act compliance, we think it’s worth it.”

    While they only began shipping vapor products in late 2020, X Delivery worked closely with vape companies to build a fully compliant service. An application programming interface helps streamline the shipping process and sync data in real-time across various platforms. They’ve also connected empty warehouses, local delivery services and other supply chain assets to their sophisticated system in an effort to speed and simplify the flow of information.

    When Vinuelas spoke to Vapor Voice (“Stand and Deliver,” Issue 2, 2021) last May, he said X Delivery could ship products to consumers in about 90 percent of the U.S. He was cautiously optimistic that the company could eventually increase coverage to include the entire country.

    “Our long-term goal is to be the No. 1 shipping carrier for D2C e-commerce brands,” Vinuelas said. “We understand the relevant laws in detail and are determined to be a good partner to vape and e-cigarette merchants.”

    A misguided law

    Credit: blr60

    Shipping vapor products with X Delivery comes at a cost, which is why smaller retailers, such as Cloud 9, decided to restrict sales to its brick-and-mortar locations. Other retailers, including Five Pawns, had to reengineer the way they handle all shipping.

    “The problems started as soon as the PACT Act was enacted,” said Jay Oku, head of business development for Five Pawns. Oku said Five Pawns reengineered their shipping logistics to comply with the “misguided law introduced by our out-of-touch 88-year-old California career politician, Diane Feinstein.

    “When we were prohibited from shipping via USPS, UPS and FedEx, we were forced to use a third-party logistics service,” Oku said. But even with this service, he said that delivery to all areas—even areas in Five Pawns’ own California backyard—remain problematic. 

    “The fact that each shipment requires a signature from an adult on the premises has caused frustration with many customers. Our customers are forced to make arrangements to have someone of age at home midday for several days so [that] they don’t miss their shipments,” he said, adding that some shipments are taking 15 days or more. 

    “These companies don’t have effective tracking data, so customers have no idea when their order will arrive,” Oku explained. “Many [customers] reported shipments being delivered in an unmarked van as late as 9:30 p.m. We have elderly customers completely inconvenienced, frightened of strangers coming to their door at night and ultimately fearful they may no longer be able to get their e-liquid.”

    Regardless of the workaround shipping solutions devised by vape companies, challenges will continue to mount as anti-vaping legislation continues to be popular with misinformed politicians.

    “While we understand and agree with the need for reasonable and responsible regulation, our concern is that these overarching regulations and restrictions will push vapers back to deadly combustible tobacco products,” said Maggie Gowen,vice president of retail marketing and communications for AMV Holdings. AMV Holdings is the largest operator of specialty brick-and-mortar vape stores in the U.S., with over 120 retail locations, as well as the parent company for numerous major e-liquid brands, including Alohma, Kure, MadVapes and MAXX.

    “We have a lot of customers in rural areas and other areas with shipping restrictions who are very upset that they can’t purchase their vapor products like before,” Gowen said. “Excessive shipping costs due to the PACT Act requirements just added to their frustration. At what point will these vapers simply give up and revert back to combustible tobacco because they cannot access vapor products? That is our biggest fear.” 

    AMV Holdings conducted a large behavioral study and found that nearly 90 percent of its customers were former smokers with an average age of 37 years; roughly half had been smoking for 10 years or longer before they started vaping. A third of them had tried traditional nicotine-replacement therapies to quit, and over half had tried to quit cold turkey.

    “Our data tells the story of a group of adults—not minors—desperate to quit smoking, who ultimately found vaping and were able to successfully kick the cigarette habit using ENDS products,” Gowen said.

    Vapers are the victims

    Credit: Nasibli

    Public health and the smokers trying to quit ultimately carry the burden of limited shipping options and all-out bans for mailing vapor products. “What we’ve seen unfold over the last year cannot accurately be characterized as ‘unintended consequences,’” said Gregory Conley, president of the American Vaping Association, a nonprofit advocacy group.

    “No member of Congress who pushed for this law took the time to understand its implications for small businesses. From conversations on the Hill, it was painfully clear that the sponsors were ready and willing to see the industry and its adult consumers take some pain.

    “In the era of TikTok and Snapchat, and despite dealers who don’t hold business licenses or collect excise taxes, very few teenagers have been stopped from accessing vaping products by this law,” Conley said. “Like with most anti-vaping policies, the primary victims are adult smokers and ex-smokers just trying to live in peace.”

    The story isn’t over, however. Business owners are searching for solutions. “For years, we have had to fight tooth and nail for the rights of our consumers,” said Schell Hammel, president of The Vapor Bar, a Dallas area retail store chain, and director of Chapter Relations for the Smoke-Free Alternatives Trade Association. “This stand by the shipping companies is just one other way to make it harder to get these products to those who need them to stay successful.

    “We will always find a way,” Hammel continued. “We are a resourceful bunch, and no matter what, we will continue to fight for our consumers’ rights and those who are able to keep their doors open to serve them.”

    The original “Vaping Vamp,” Maria Verven owns Verve Communications, a PR and marketing firm specializing in the vapor industry.

  • Bantam Vape Receives USPS E-Cig Shipping Exemption

    Bantam Vape Receives USPS E-Cig Shipping Exemption

    E-liquid manufacturer Bantam Vape received an exemption from the United States Postal Service (USPS) that allows the company to ship its e-liquid products to select vape retailers and distributors throughout the United States.

    Bantam e-liquids
    Bantam is seeking marketing orders from FDA for its suite of e-liquid products. Credit: Bantam Vape

    The postal service’s decision comes in response to Bantam’s application for a business purposes exception to the Prevent All Cigarette Trafficking (PACT) Act, which was amended by Congress on December 27, 2020, prohibiting the shipment of e-cigarettes and vapor products through USPS.

    “Bantam’s ability to reengage USPS as a shipper of our high-quality, flavor-filled e-liquids allows us to more effectively serve our trusted retail and distribution partners,” said Bantam spokesperson Anthony Dillon. “Utilizing USPS as an alternative shipping channel provides our business-to-business customers with increased purchase order flexibility and decreased shipping timelines and costs.”

    Bantam provided USPS with the necessary documentation to obtain its exception to the PACT Act prohibition against shipment of vapor products through USPS, according to a press release. This included submission of applicable state and federal permits and licenses for both Bantam and its customers named in the application.

    “We thank USPS for processing our application in a timely manner and in helping us deliver alternatives to combustible cigarettes to our customers across the U.S.,” said Dillon. “As we continue to grow our brand’s customer base, Bantam is committed to adding retailers and distributors to the list of those we can ship to using USPS.”

  • Halo Granted USPS Exemption for Mailing Vape Products

    Halo Granted USPS Exemption for Mailing Vape Products

    Pure Labs, parent to the Halo brand of vaping products, is now approved by the U.S. Postal Service (USPS) to ship e-liquid and other vaping products to compliant businesses through the brand’s Master Distributors; Syndicate Global Distribution and Halo Wholesale Direct, according to a press release.

    The approval allows both Syndicate Global Distribution and Halo Wholesale Direct to ship Halo products, categorized as electronic nicotine delivery systems (ENDS), as a business and regulatory exception to the PACT (Prevent All Cigarette Trafficking) Act.

    The original PACT Act (2009) was amended by Congress on December 27, 2020 to incorporate e-cigarettes and vaping products.

    “This is a huge win for Halo and for all of our retail partners.”, said Kevin Dietz, director of Halo brand sales. “Halo’s tobacco and menthol vape products are in-demand by adult consumers throughout the country, and we are excited to have USPS solidify the supply chain. Halo has been here from the start and has numerous ENDS products in the final stage required for FDA Authorization, furthering Halo’s commitment to remain America’s #1 tobacco-flavored e-liquid brand”.

  • Greenlane Granted USPS Exemption to Mail ENDS

    Greenlane Granted USPS Exemption to Mail ENDS

    Greenlane Holdings has announced its approval from the United States Postal Service (USPS) for a business and regulatory exception to the Prevent All Cigarette Trafficking (PACT) Act, allowing the company to ship electronic nicotine delivery systems (ENDS) products to other compliant businesses.

    Credit: MYDAYcontent

    With the approval, over 97 percent of total annual sales will be eligible for shipment by freight, USPS, or major carriers, and the PACT Act’s impact will be reduced to less than 3 percent of annual sales, according to a press release. The approval also enables Greenlane to offer its logistics capabilities to distribute other businesses’ ENDS products.

    “We are thrilled to secure this approval from USPS to ship ENDS products business to business,” said Nick Kovacevich, CEO of Greenlane. “We continue to believe that in a highly regulated industry-which is only going to be subject to stricter regulation over time-that companies with significant size, scale, resources, and robust compliance programs will be able to successfully comply with regulatory requirements. As evidenced by the approval, Greenlane is well-positioned as a Nasdaq-listed market leader with a demonstrated history of compliance to navigate this ever-changing regulatory landscape and continue accelerating our business.”

    Kovacevich said the company will continue to focus on selling its own proprietary in-house brands, and remain a strategic purveyor and distributor of third-party brands that are complementary to its business and provide value for its customers. “In fact, many companies have already begun to reach out with the hopes of leveraging our structure, processes, network, and compliance position,” he said. “Our message to businesses is that ‘if you are having issues shipping via the PACT Act and would like to explore engaging Greenlane as a distribution partner, please reach out.’ We welcome inquiries from all customers whose supply chains have been disrupted due to the PACT Act.”

  • VaporBeast Exempted from U.S. E-Cigarette Mail Ban

    VaporBeast Exempted from U.S. E-Cigarette Mail Ban

    Turning Point Brands has received a United States Postal Service (USPS) exemption to ship vapor products to thousands of age-restricted vape shops across the United States through VaporBeast and other websites.

    mailboxes
    Credit:USPS

    “We remain focused on providing a positive experience for our customers,” said Marc Waxman, president of NewGen at Turning Point Brands, in a statement.

    “As one of the first to apply for and receive an exemption from the USPS, we are now able to increase the number of shipping options we offer our customers. This will allow for optimized order processing, more accurate tracking data and faster overall shipping times. Our network of delivery choices is expanding every week to cover shipments to more and more businesses and adult consumers.”

    In late December, former U.S. President Donald Trump signed 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.

    The USPS ban on mailing vapor products took effect Oct. 20.

  • USPS Vapor, CBD Mail Ban to Take Effect Tomorrow

    USPS Vapor, CBD Mail Ban to Take Effect Tomorrow

    Credit: blr60

    The ban on mailing vapor products through the United States Postal Service (USPS) takes effect tomorrow. After more than six months, the USPS has finally posted for public inspection its rules for mailing e-cigarettes with the Federal Register. The rules will publish tomorrow, Oct. 21, and go into effect immediately. 

    There is not an exemption for any vaping cannabis products, as many in the industry had hoped. The USPS is leaving it up to the U.S. Congress to carve out an exemption for hemp-based vaping products. The rules were originally set to go into effect in March and then April, however, the USPS held back publishing the rule while it went under agency review.

    The rule states that Congress’s use of “nicotine” in the term “electronic nicotine delivery systems,” makes clear that “nonmailable ENDS products include those containing or used with not only nicotine, but also ‘flavor[s]’ or any other substance … It goes without saying that marijuana, hemp, and their derivatives are substances,” the rule states. “Hence, to the extent that they may be delivered to an inhaling user through an aerosolized solution, they and the related delivery systems, parts, components, liquids, and accessories clearly fall within the [Preventing Online Sales of E-Cigarettes to Children Act’s] scope.

    “Conversely, THC-containing substances that are excluded from the [Controlled Substances Act] CSA—that is, hemp and hemp derivatives with no more than 0.3 percent THC by dry weight—are not subject to CSA-based mailability restrictions, and items used with such substances (and not with controlled substances) may fall outside the definition of drug paraphernalia … As such, those substances continue to be mailable generally, to the extent that they are not incorporated into an ENDS product or function as a component of one. To the extent that they do comprise or relate to an ENDS product, however, then that product is now nonmailable under the PACT Act and POSECCA, except pursuant to a PACT Act exception.”

    Credit: Wolterke

    UPS and FedEx already have bans in place for vaping products. Many in the industry have also moved on to new ways of mailing vaping products to customers through third-party shippers. Numerous other companies have since gone out of business since the U.S. Food and Drug Administration started sending out marketing denial orders (MDOs) last month.

    When a 5,000-plus page omnibus bill, the Consolidated Appropriations Act of 2021, was signed into law on Dec. 28, 2020, buried deep within the bill (page 5,136) was the Preventing Online Sales of E-cigarettes to Children (PACT) Act. It was a provision that effectively bans the USPS from shipping ENDS products.

    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.”

    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 previous news reports.

    This story will be updated as the published rules are reviewed

  • Unintended Consequences

    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.

  • Senators Pen Letter Urging USPS on PACT Act Rules

    Senators Pen Letter Urging USPS on PACT Act Rules

    Two U.S. Senators have written a letter urging the United States Postal Service (USPS) to finalize rules for mailing vapor products. Senators Dianne Feinstein and John Cornyn asked Postmaster General Louis DeJoy to implement regulations required by the Preventing Online Sales of E-Cigarettes to Children (PACT) Act, which was signed into law on December 21, 2020.

    Credit: blr60

    The rule requires the USPS to apply the same mailing restrictions to e-cigarette products that are currently in place for traditional cigarettes. “As you know, the law requires the U.S. Postal Service to promulgate these new regulations by April 26, 2021, which is 120 days after enactment. We are now seven weeks past that deadline, and the regulations still have not been published,” the letter states. “We urge you to publish these new regulations as soon as possible in accordance with the requirements of the law.”

    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.

    “As we begin to emerge from the pandemic, it is imperative that the U.S. Postal Service immediately implement these new regulations to ensure the harmful effects from the ongoing youth vaping crisis aren’t compounded by the lingering risks posed by the pandemic,” the letter states.

    Critically for the vapor industry, the most popular carriers, Federal Express and United Parcel Service also ended all deliveries of vapor products. This has forced many online retailers to close or alternative shipping methods.

  • No Update on When USPS Expects to Publish Vape Rules

    No Update on When USPS Expects to Publish Vape Rules

    The industry is still in flux. Many businesses closed or found more expensive shipping options. Some companies stopped shipping and then started again knowing that it could all end at any minute. As of this writing, however, the United States Postal Service (USPS) has yet to publish its final rule for mailing vaping products.

    Credit: Tomasz Zajda

    On April 19, the USPS issued guidance for exemptions to the requirements for mailing all vapor products, including cannabis. This was in response to the U.S. Congress placing electronic nicotine-delivery systems (ENDS) under the stringent mailing requirements of the Prevent All Cigarette Trafficking (PACT) Act. That guidance only references that a rule could be published at any time and the ban on mailing vaping products to consumers would take effect immediately after the rule is published.

    “A forthcoming final rule will determine whether electronic nicotine-delivery systems (ENDS) may continue to be mailed pursuant to certain statutory exceptions that are currently administered through an application process,” the guidance states. “Until the final rule is issued, ENDS are not subject to the PACT Act …”

    Many businesses ended shipping to consumers on or before April 26, a day before the assumed effective date of the USPS rules. The comment period closed March 22 and the USPS stated that it had received “numerous comments” pertaining to its proposed ENDS mailing rules. An e-mail to USPS media relations did not receive a response by this writing.

    The USPS is required to use a definition of ENDS so broadly that it can be interpreted to include and inhalable electronic delivery system for any product. These means restrictions also apply to ENDS products such as: “an e-cigarette; an e-hookah; an e-cigar; a vape pen; an advanced refillable personal vaporizer; an electronic pipe; and any component, liquid, part, or accessory of a device described [ENDS], without regard to whether the component, liquid, part, or accessory is sold separately from the device,” according to the law.

    Many in the industry think Congress overreacted placing ENDS under the PACT Act requirements. The PACT Act was intended to stop manufacturers from avoiding taxes on combustible tobacco products, not keep them out of the hands of youth. Congress said it amended the PACT Act to protect kids from vaping. There has been no evidence that youth can easily purchase vaping products online.

    This USPS says its just following the orders of Congress. It’s also turning out to be more complicated than just ending all vape mail. The USPS was inundated with exemption applications, none of which will be addressed until the final rule is published, according to the USPS.

    “Despite our best efforts, in order to ensure thorough and thoughtful consideration of the complex issues and voluminous comments by industry, individual, and governmental stakeholders, the Postal Service is unable to publish a final rule by today’s target date,” said David P. Coleman, a USPS spokesperson, in an email to Marijuana Business Daily, adding that his agency would “finalize the rule as soon as possible” and “mailers should be prepared for implementation upon publication anytime.”

  • Vape Mail Ban Imminent, No Confirmed Date

    Vape Mail Ban Imminent, No Confirmed Date

    mailboxes

    Today could be the last day businesses can mail vapor products to consumers through the United States Postal Service (USPS). However, nothing is official just yet. The mail ban was predicted by many in the industry to go into effect on April 27, 2021, but the final rule must still be published in the Federal Register. Currently, effective March 28th, 2021, recipients of all vaping product(s) purchased online are required, by law, to present ID and sign for their delivery.

    Credit: Sam Larussa

    On April 19, the USPS issued guidance for exemptions to the requirements for mailing all vapor products, including cannabis. This was in response to the U.S. Congress placing electronic nicotine-delivery systems (ENDS) under the stringent mailing requirements of the Prevent All Cigarette Trafficking (PACT) Act. That guidance only references that a rule could be published at any time and the ban on mailing vaping products to consumers would take effect immediately after the rule is published.

    “A forthcoming final rule will determine whether electronic nicotine-delivery systems (ENDS) may continue to be mailed pursuant to certain statutory exceptions that are currently administered through an application process,” the guidance states. “Until the final rule is issued, ENDS are not subject to the PACT Act …”

    Many businesses ended shipping to consumers on or before April 26, a day before the assumed effective date of the USPS rules. The comment period closed March 22 and the USPS stated that it had received “numerous comments” pertaining to its proposed ENDS mailing rules. An e-mail to USPS media relations did not receive a response by this writing.

    The USPS is required to use a definition of ENDS so broadly that it can be interpreted to include and inhalable electronic delivery system for any product. These means restrictions also apply to ENDS products such as: “an e-cigarette; an e-hookah; an e-cigar; a vape pen; an advanced refillable personal vaporizer; an electronic pipe; and any component, liquid, part, or accessory of a device described [ENDS], without regard to whether the component, liquid, part, or accessory is sold separately from the device,” according to the law.

    Violators are no longer dealing only with the U.S. Food and Drug Administration (FDA). The PACT Act requires companies to now register with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) as the enforcement agency for violating PACT Act requirements. Companies shipping vapor products must also file monthly reports with state tobacco tax administrators and retain federal, state and local compliance records that should be available upon request.

    Unless changes are made, an exemption must be made for companies mailing cannabis vape products, such as CBD vape pens, as well as other potentially exempt mailings such as business-to-business mailings or research. Companies must create a list of all businesses that would receive mail and a list of detailed information on the business and products being shipped. The USPS also says it is unsure if normal PACT Act exemptions will apply to ENDS product. It will also not process any exemption requests until after the final rule is published.

    Credit: blr60

    “If any of the relevant exceptions are ultimately made available for [electronic nicotine delivery systems (ENDS)], then, given the highly decentralized nature of the ENDS industry relative to the industries historically covered by the PACT Act, the Postal Service anticipates receiving ENDS-related exception applications at a rate several orders of magnitude above the historic norm,” the guidance reads. “The Postal Service has not yet determined whether and to what extent those exceptions will be extended to ENDS. Early acceptance of applications would pose significant administrative challenges for the very Postal Service personnel who are developing the final rule amid substantial public comment under a tight timeframe.”

    For hemp and CBD products with a THC concentration not exceeding 0.3 percent, the USPS 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 Agricultural Act of 2014 and the Agricultural Improvement Act of 2018.” These records may include laboratory test results, licenses, and compliance reports.

    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. It does not seem like that is going to change any time soon.