The Prevent All Cigarette Trafficking (PACT) Act has caused issues for some businesses trying to navigate the new regulatory landscape. PactAct POS is offering cloud-based software that includes integration with major e-commerce platforms like Shopify, BigCommerce and WooCommerce in hope of helping businesses remain in operation legally, according to a company press release.
“Pact Act vape compliance can be an overwhelming process for companies,” explained Terrence Johnathan, vice president of shipping and logistics for PactAct POS. “In some cases, the requirements are causing small businesses to shut down or stop shipping directly to consumers, which is hurting both consumers and manufacturers.”
PactAct POS provides registration, reporting, shipping and logistics, and government relations services.
PactAct POS is also releasing the PACT Act Survival Guide for 2022, a free e-book that focuses on PACT Act planning and strategies for 2022 and beyond.
“There are so many hoops to jump though,” said Johnathan. “We’ve worked with clients dealing with the vape mail ban [and] every kind of scenario, and we’ve been with them every step of the way. These companies don’t have to go at it alone. They just need to ask for help.”
PactAct POS is a cloud-based platform that automates PACT Act compliance for more than 250 businesses.
The United States Postal Service (USPS) has published its guidance for mailing vaping products in the Federal Register. The notice provides some clarity on USPS policy and outlined potential exceptions, which could include legal hemp and its derivatives.
Until the final rule is issued, ENDS are not subject to the Prevent All Cigarette Trafficking (PACT) Act. The USPS suggests it may exempt cannabis products, but also says that it will not review any exemption applications before the rule is finalized. The agency did, however, state that it has attempted to streamline the application process.
“The Postal Service understands that those concerns are heightened by Congress’s decision to make ENDS nonmailable immediately upon publication of the final rule, rather than applying the 30-day notice period that typically follows a final rule under the Administrative Procedure Act,” the USPS wrote. “
If any of the relevant exceptions are ultimately made available, 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.
“Therefore, this document is intended to clarify the state of the exception application process in advance of the final rule and to provide guidance to mailers interested in availing themselves of any exceptions that may ultimately be made available.”
The USPS anticipates many applications for exemption to its mail ban. “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 USPS mail ban is only one of several challenges to the vapor business created by the recent legislation. Among other requirements, the PACT Act also stipulates that manufacturers register with the Bureau of Alcohol, Tobacco, Firearm and Explosives (ATF), as well as file monthly reports with state tobacco tax administrators.
Recipients of all vaping products purchased online are now required to present ID and sign for their delivery, regardless of the carrier. Many states are expecting businesses to start filing monthly reports on May 10 and the USPS is expecting to post the final rule and officially end the mailing of ENDS products to consumers on April 27.
The United States Postal Service (USPS) is scheduled to publish in the Federal Register its rules for mailing electronic nicotine-delivery system (ENDS) products tomorrow, Feb. 19. The unpublished rule states that the prohibition on mailing ENDS will apply immediately “on and after” the date of the final rule.
However, the Preventing Online Sales of E-Cigarettes to Children Act, which placed ENDS under the PACT Act, was enacted on Dec. 27, 2020, and becomes effective 90 days after enactment (March 27, 2021).
Under the USPO rule, 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
Public Health: limited shipments by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
Azim Chowdhury
The unpublished rules suggest that business-to-business shipments will be allowed. According to Azim Chowdhury, a partner at Keller and Heckman, the PACT Act has historically exempted business-to-business deliveries from the USPS ban. Specifically, the USPS ban does not extend to tobacco products mailed only for business purposes between legally operating businesses that have all applicable state and federal government licenses or permits and are engaged in tobacco product manufacturing, distribution, wholesale, export, import, testing, investigation or research.
“Companies seeking to use USPS for business-to-business deliveries must first submit an application to the USPS Pricing and Classification Service Center and comply with several other shipping, labeling and delivery requirements,” said Chowdhury.
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.”
In addition to the nonmailing provisions, the PACT Act requires anyone who sells cigarettes or smokeless tobacco to register with the Bureau for Alcohol, Tobacco and Firearms and the tobacco tax administrators of the states into which a shipment is made or in which an advertisement or offer is disseminated, according to Chowdhury. Retailers who ship cigarettes or smokeless tobacco to consumers are further required to label packages as containing tobacco, verify the age and identity of the customer at purchase, use a delivery method (other than the USPS) that checks ID and obtains an adult customer signature at delivery, and maintain records of delivery sales for a period of four years after the date of sale, among other things.
