The END of vape shipping

Late last year, Congress amended the Preventing All Cigarette Trafficking (PACT Act) to include new regulations regarding the delivery and sales of ENDS products. The amendment is effective as of March 27, 2021.


ENDS PRODUCTS NOW CONSIDERED CIGARETTES UNDER THE PACT ACT


As part of the “Consolidated Appropriations Act, 2021” in the most recent COVID-19 relief bill signed into law on December 27, 2020, Congress amended the definition of cigarettes in the Prevent All Cigarette Trafficking (“PACT”) Act to include electronic nicotine delivery systems (“ENDS”). The amendment defines ENDS as “any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device,” including “an e-cigarette; an e-hookah; an e-cigar; a vape pen; an advanced refillable personal vaporizer; an electronic pipe; and any component, liquid, part, or accessory [thereof], without regard to whether the component, liquid, part, or accessory is sold separately from the device.” Based on this definition of ENDS, zero-nicotine e-liquids, synthetic nicotine e-cigarettes, and CBD/hemp vape pens are all implicated.


PACT ACT IMPOSES REQUIREMENTS ON ENDS PRODUCTS

The PACT Act, as amended, imposes reporting, registration, labeling and other requirements on any business or person selling, shipping, or otherwise transferring ENDS products in interstate commerce. As the PACT Act applies only to interstate commerce, cannabis vape products from marijuana as part of a state-licensed program are exempt by virtue of their wholly intrastate nature.


Registration: The PACT Act requires anyone who sells cigarettes (including ENDS products) to register with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the tobacco tax administrators of the states wherein a shipment is made or in which an advertisement or offer is distributed


. Direct-to-consumer deliveries are subject to additional requirements such labeling packages as containing tobacco, verifying the age and identity of the customer at purchase, using a delivery method (other than USPS) to verify the age of, and obtain a signature from, the customer at delivery, and maintain records of delivery sales for four years after the sale date.


Reporting: The PACT Act also requires cigarette (including ENDS products) sellers to file a monthly report with the state tobacco tax administrator and any other local or tribal entity that taxes the sale of cigarettes. These requirements apply to all sales, regardless of whether they are business-to-business or direct-to-consumer.


USPS Ban: As amended, the PACT Act now prohibits the use of USPS to deliver ENDS products directly to consumers. This mail ban is effective as of the date on which the USPS promulgates applicable regulations, which it must do within 120 days of the enactment. USPS has not yet published any clarifying regulations. Other carriers (UPS and Federal Express) have followed suit and recently announced that they will also cease all deliveries of vapor products.


many vapor businesses are currently exploring alternate transportation options and purchasing compliance software to avoid penalties for PACT Act violations. A knowing violation of the PACT Act can carry a three-year prison sentence and/or for the first offense the greater of a $5,000 fine or 2% of the gross sales of “cigarettes” (including ENDS products) for a one-year period ending on the date of the violation.


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