The eJuices.co team has been monitoring the vaping industry landscape for you and your business. While the omnibus spending bill was passed giving economic relief to individuals and businesses alike, the most concerning thing passed in this bill iseven more restrictions on vape. This means that retail vape sites will face additional hurdles when it comes to vape. There is a lot to unpack about the PACT Act, but thankfully the eJuices.co team has you covered.
What’s In The PACT Act?
While the bill claims it is preventing online sales of vape products to children, the reality is a lot worse when you get into thetext of the bill on page 5136. This not only prohibits the United States Postal Service (USPS) from delivering vape products, but forces compliance with thePrevent All Cigarette Trafficking (PACT) Act. Legislation is often bundled into omnibus spending bills that go unnoticed by the general public. The PACT Act and other vape legislation are just some examples of legislation that are tucked into larger spending bills. The PACT Act will take effect 90 days from the signing of the omnibus bill, which President Donald Trump has not yet signed as of this writing (12/23/20).
As we previously mentioned in the State of Vape, we believed that the Attorney General (which still has no nominee as of this writing) would be a pivotal player in regulating vape. President-elect Joe Biden has said thathis pick for Attorney General was “no obvious choice,” but time is running short for Biden to choose a nominee. One of the first steps of the PACT Act? Online retailers are required to register with the Attorney General. On top of this, they must verify the age of customers using a commercially available database, as well as use a private shipping service that collects an adult signature at the point of delivery. This will possibly add $7-$12 to the cost of shipping vaping products directly to customers.
There are also economic ramifications to the PACT Act: sellers must register with the federal government and the tobacco tax administrators of states that tax vaping products. Sellers must also collect all local and state taxes, and even affix any required tax stamps to products that are sold. This means increased costs of doing business for online retailers, and possibly an increase in the prices of vaping products to cover such a cost.
The next step is considered very upsetting to those who also have concerns about privacy: sellers must also send each taxing state’s tax administrator a list of transactions with the customers in their state. This includes names and addresses of customers, and the quantities and types of each product sold. Records must be maintained 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.” Violators can face fines and up to three years in prison.
How Has The Industry Reacted?
American Vaping Association President Gregory Conley came out strongly against the PACT Act. “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. This is not a law designed to regulate the mail-order sale of vaping products to adults; it’s an attempt to eliminate it.” We expect many other vaping companies to make statements in the near future.
FedEx has also banned the shipping of vaping products. “As of March 1, 2021, FedEx will begin prohibiting electronic cigarettes, vaping liquids, and other vaping products in the FedEx global network,” a FedEx spokesperson told Vaping360. This leaves UPS as the only major private carrier available for vaping products. The vape mail ban could allow a shipping and logistics company to step in to ship vaping products, although the chances of this are slim. Many in the industry are preparing their reaction to the PACT Act.
We will keep you informed about developments in the PACT Act and other legislation regarding the vape industry as we get more information. If you have any questions or concerns, you can always contact your eJuices.co account manager or sales representative. You can alsotake action by contacting the White House directly.