The PACT ACT
Starting on April 26th 2021 USPS will no longer accept shipment of vape products including both hardware & eliquid. FedEx has already stopped service, and UPS will be ending it’s vape shipments in early April as well. This means the entire industry will be relying on regional carriers for consumer shipments. So let’s talk about how this is going to affect you the consumer, then we will discuss what the PACT ACT actually is. Finally we will discuss how this effects your local vape shops like us.
How does this affect you?
Well, for starters the cost of shipping is going to be much higher to anyone in the United States. So far, the lowest flat rate I have been able to find is $20.00 for service to four or five of the surrounding states for our location which is in Texas. While I am working hard to find a better deal, the moral of the story is that most carriers will not accept tobacco products. So, the field of options is very limited. Secondly, part of the act passed by the House and Senate includes the enforcement of verified age and signatures. This means that if you place an order from any retailer, you must be present when it is delivered, and show your ID in order to accept the shipment via signature. Obviously, you can see how frustrating this is going to be for everyone involved! I have spoken with several technology companies who provide verification services, and they hope within a few years to have a way to accomplish this in another fashion that would not rely on the face to face only option of verification. However, for now, we are stuck with this.
What is the PACT ACT anyway?
The Prevent All Cigarette Trafficking Act was established in 2009 as an extension of the 1949 Jenkins Act. This required interstate shippers to report cigarette sales to each states tobacco tax administrator as a way to cut down the amount of illicit sales and tax avoidance. I won’t go into detail with all of the monthly paperwork, permits, and confusing state tax rules; but be glad you aren’t shipping tobacco anywhere. So, in the December 2020 COVID relief package all vapor products including hardware and eliquid, CBD, and really anything that vaporizes was quickly added into the PACT ACT some five thousand plus pages into the bill. This happens all the time in these omnibus bills that are time sensitive. Since everyone was focused on relief from the pandemic, this was able to quietly be placed in, and passed without any debate. It was only the week after that reports started showing up in the industry that we had been the unfortunate victims of this type of legislation. If you would like a more detailed read on this act you can read an article by Azim Chowdhury in The National Law Review.
How this will affect Vape Shops
On the B2B side of things we are already seeing increased shipping times from our distributors, and increased cost due to the absence of FedEx and UPS. Hopefully, once we get all the ducks in a row with ATF and USPS we will be able to utilize an exception that will allow a more stringent shipping process between businesses and not rely so much on the regionals. Obviously, we will all be dealing with a loss of ecommerce business in a time when most people are shopping online. The worst part is customers that have been shopping with us for almost a decade will no longer be able to do so if we can’t find regional service to their area. Even if we do find service for them, they will have to deal with higher shipping cost, and need to be present when their package arrives. When it comes to adapting, we have learned over the years to meet each challenge head on, and just figure it out. This will be no different. I’m just disappointed that many customers from many different shops will find themselves cut off from one another due to legislation aimed at hurting an industry that exist to provide a better option to those trapped in a world of combustible cigarettes.