In 2021, new federal legislation affects all sellers with vape-related products that ship directly to the consumer. Initially, lawmakers created the law to keep nicotine products from minors. But they wrote the legislation so broadly that other industries with vape products, including cannabis and CBD, have been negatively impacted.
What is the PACT Act?
An acronym for “Prevent All Cigarette Trafficking,” the PACT Act has roots as far back as 1949. Originally called the Jenkins Act, the federal law states that any person who sells and ships cigarettes across state borders must report the sale to the buyer’s state tobacco tax administrator.
Fast forward to 2009 when lawmakers amended the act to match new technology, broadening the language to include online sales. Digital sellers were now required to register with the Bureau of Alcohol, Tobacco, and Firearms (ATF) and the state they operated in and sold to. The 2009 amendment also prohibited the mail delivery of cigarettes and smokeless tobacco within the US.
The main intention for these amendments was two-fold:
- It prevented minors from buying. The ultimate goal was to limit the pathways that tobacco and related products can get to minors. There was a greater emphasis on online retail because it was harder to track the age of consumers.
- By linking taxes and registration with state authorities, the regulators had more control. State and federal officials could more easily audit companies and therefore track the age of consumers more closely.
New legislation in 2021
In December 2020, as part of a larger stimulus bill, the PACT Act was again amended. The new legislation went into effect on April 26, 2021, and the industry can already feel its effects.
The 2021 PACT Act includes two new rules:
- All electronic nicotine delivery systems (“ENDS”) and substances that can be used with ENDS are held to the same rules as cigarettes and smokeless tobacco products. All regulations that apply to cigarettes and smokeless tobacco products now also apply to all ENDS, which is defined very broadly as “any electronic device that, through an aerosolized solution, delivers nicotine, flavor or any other substance to the user inhaling from the device.” The breadth of this language puts manufacturers of vape pens for use with liquid cannabis, CBD, or other non-nicotine liquids in the untenable position of having to try to comply with a statute intended to regulate tobacco products.
- The US Postal Service is restricted from mailing any cigarettes, ENDS, or vape products anywhere in the US.
On April 19, one week before USPS implements the new regulations, USPS stated that they would postpone the deadline until they could clarify the guidelines. Regardless of the final ruling, most shippers of vapes for use with liquids anticipate that they will need to find alternatives to get their products to their customers.
What this means for sellers
The Attorney General has delegated the ATF to administer and enforce the PACT Act. If companies don’t meet the guidelines, they face steep fines, criminal or civil charges, and even prison sentences. Sellers who fall under this new bill should take it very seriously.
Under the new PACT Act, all sellers must:
- Verify customers’ ages.
- Use shipping services other than USPS.
- Verify an adult accepts each delivery by obtaining an…
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