The brand new regulation banning vaporizer shipments goes into impact this 12 months and impacts hashish corporations
The U.S. Postal Service will be banned from shipping vaping products this summer due to a new law that worries cannabis companies.
In late December, when Congress passed an agent bill to keep the government going, lawmakers incorporated the text of a separate measure.
The Preventing Children’s E-Cigarette Online Selling Act prohibits the USPS from shipping vaping products.
Hemp or marijuana isn’t mentioned in the new law, but companies in both sectors should be ready to comply, said Rod Kight, a cannabis lawyer in Asheville, North Carolina.
“To the extent that they are participants in the industry selling vape products, they are absolutely affected,” Kight said of companies that make or sell cannabis vaping products.
The legislation will come into force at the end of March. After that, the USPS has 120 days to create rules to implement the law.
FedEx and UPS have already announced that they will follow the U.S. Postal Service’s policy and not ship any vaping products.
“As of April 5, 2021, due to the increasing complexity of shipping these products, UPS will stop shipping vaping products to, from or within the United States,” said Matthew O’Connor, a UPS spokesman, in a statement.
There is currently no publicly available information on how often vaping products are shipped in the mail. According to Rick Maturo, Associate Client Director of the Nielsen Cannabis Insights Practice, U.S. consumers ordered $ 44 million worth of CBD vape cartridges online in 2020. This is a measure of how often postmen could be used to fulfill orders.
Under the new regulations, sellers of vaping products must:
- Shipping via private companies such as DHL, which require a signature on delivery.
- Register with the US Attorney General.
- Implement an age verification system.
“Many of them are already age-verifying,” said Kight. “For some, this will be a bigger project.”
Business-to-business sales – whether for wholesale or manufacturing – are exempt from the USPS shipping ban, Kight said, as long as they have the licenses necessary to operate.
Arnaud Dumas de Rauly, CEO and co-founder of The Blinc Group, a New York company that designs and supplies cannabis vaping hardware, called the new restrictions “another government attempt to” demonize “nicotine vaping.” However, he expressed confidence that lawmakers are not targeting cannabis.
“The main concept for this part of the bill is its intent to contain nicotine vapors, not cannabis,” said Dumas de Rauly.
Time to prepare
With the USPS still to enact new rules in the months to come, Dumas de Rauly said the government agency has time to explain how the ban on shipping products will be enforced. That window, he added, “also leaves the door open for our industry to lobby USPS.”
Kight agreed that companies should use the time before the law goes into effect to prepare for upcoming changes.
“The first thing (for cannabis entrepreneurs) to do is become aware of the law and whether it affects them or not. And if it’s a company (manufacturer of vaporizers) or a retailer of vaping products, it affects them, ”he said.
The new rules update an existing cigarette and smokeless tobacco taxation act known as the Jenkins Act, which has been in force since 1949.
While the law is aimed at nicotine products, the way the new legislation will be formulated throws a wide web. The term “electronic nicotine delivery system” includes, for example, any product that “delivers nicotine, aroma or other substance to the user who inhales the device”. It’s the “any other substance” part of that phrase that scares cannabis companies.
Updates to the law include “CBD liquids and non-nicotine vaping products,” said Gregory Conley, president of the Connecticut-based American Vaping Association. Finding out the local and state taxes in force in every place a company sells products is a challenge and lawyers and advisors may be required.
“It should be possible to modernize the tax infrastructure so that small businesses don’t suddenly get licenses and deal with 20 to 50 different state tax authorities – not to mention indigenous tribes and local governments,” he argued.
Conley said his organization had campaigned for Congress to find an alternative to the USPS ‘s ban on shipping vaping products, but “encountered total opposition to the idea.” His group also argued that the definitions in the law were too broad.
“The best we can hope for is that there will be an opportunity to speak with the USPS and work with various state tax authorities to determine what compliance will be required,” he said. “You have to be ready to increase your shipping prices significantly.”
Conley said how big the impact the new rules will be depends on how strictly they are enforced. The sentence for violating the law can include three years in prison, but Conley said a more likely scenario is that a company faces hefty fines and closes.
“For nicotine vaping products that get most of the enforcement,” he said, “that’s very bad.”