Fed-Ex and UPS are following suit after the PACT Act was passed by Congress.
Late in December 2020, Congress gave the go-signal to an appropriations bill called the Preventing Online Sales of E-Cigarettes to Children Act (PACT), which prohibits the US Postal Service (UPS) from shipping both tobacco and cannabis vapor products.
Of course, this is going to affect the vape market big time. The bill does so much more than just banning the shipment of vapes; it actually gives shipping businesses involved in sending out vaping and cannabis products no choice but to comply with the PACT, which has strict regulations for online merchants.
“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.
PACT was actually set in motion last 2010, and it was the same year that the Food and Drug Administration (FDA) got control of tobacco products thanks to the Tobacco Control Act (TCA). Unfortunately in 2016, the FDA began regulating vape products such as vape pens, water pipes, pipes, e-cigarettes, and other similar goods. Since then, they all fell under the definition of “tobacco products.”
“Covered tobacco product means any tobacco product deemed to be subject to the Federal Food, Drug, and Cosmetic Act, but excludes any component or part that is not made or derived from tobacco,” says the FDA.
In a nutshell, PACT doesn’t just ban the USPS from shipping smokable goods, but the merchants should also comply with the act requirements no matter how they distribute their goods. We won’t be surprised if this leads to the opposite – people actually reverting back to cigarettes because government policies such as these make it so much harder to purchase safer options, such as vapes.
Implications For Cannabis Vape Manufacturers
Though PACT was designed to curb shipment of nicotine products, the law is structured in such a way that it casts a wide net, and thus includes cannabis vapes. They make use of legal language such as “electronic nicotine delivery system,” which refers to any product that “delivers nicotine, flavor or any other substance to the user inhaling from the device,” and the usage of “any other substance” is vague enough that it can be used against cannabis businesses.
Online merchants will have to register with the US Attorney General, make sure that customers’ age is verified using a database which is commercially available, utilize private shipping and collect adult signatures once the products are delivered, collect all applicable taxes and affix the tax stamps to each product sold, and many more. Any seller that doesn’t register nor comply with these regulations can face stringent penalties, and even 3 years in jail.
The demands for additional record-keeping plus shipping restrictions only put salt on an already open wound, making it so much more expensive to do business. It will also be the consumers who will have to shoulder these costs, again, causing them to revert back to smoking cigarettes. These difficulties are going to be harder on consumers who live in rural locations because the increase in cost will be enough for most people to vape, so they will have to give it up completely unless there are any shops nearby that offer the devices they want, if they even have the ability to travel or are willing to make the trip on regular intervals.
“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.”
“It should be possible to modernize the tax infrastructure so that you don’t have small businesses suddenly having to get licenses and deal with 20 to 50 different state tax authorities – not to mention native tribes and local governments,” adds Conley. He also explained that the American Vaping Association tried to lobby Congress in order to seek out alternative ways of shipping vaping products using the USPS, though they were only “met with total resistance to that idea.”
“The best that we can hope for is there’s going to be an opportunity to comment with the USPS — as well as engage with different state tax authorities — to determine what compliance is going to be necessary,” he explains. “You need to be prepared to raise your shipping prices considerably.”
Judging by the name of the law: Preventing Online Sales of E-Cigarettes to Children Act, it implicitly says that it is meant to discourage kids below the age of 21 from buying tobacco. However, these current policies are extreme at best, affecting the cannabis and vape industry for no good reason. If they really wanted to prevent kids from buying tobacco products, why not simply ask for identification at the point of delivery? A majority of mail carriers already practice this anyway, including the USPS.
So we’re left to think that these measures were put in place deliberately to shut down the vape industry. People will go back to cigarettes, boost illegal sales of vapes online, and as a result, likely make it so much simpler for minors to buy cigarettes in brick and mortar shops that are unregulated. Dealers on social media will thrive because they have mastered the art of selling to minors completely undetected by law without even verifying their customers’ age.
So it seems yet again that the government has failed to effectively put a system in place while hurting the cannabis industry. We hope to be proven wrong.