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U.S. e-cigarette mailing ban takes effect: will change online sales and transportation

2021/10/21|Knowledge

According to foreign reports, the U.S. Postal Service will issue final rules on October 21 to prohibit the delivery of electronic cigarette products through the U.S. Postal Service. The new USPS rules will take effect immediately after they are published in the Federal Register and will completely change the online sales and transportation of electronic cigarette device and Flavored E Liquid.

According to the provisions of Congress in the prevention of online sales of e-cigarettes to children act (posecca), the final rule will not include any exceptions to residential delivery of nicotine or marijuana e-cigarette products (except Alaska and Hawaii). Posecca was passed without objection and was signed into law by President trump as part of the federal budget bill last December.

In addition to banning e-cigarette mailing, posecca also forces e-cigarette shippers to comply with the prevention of all cigarette trafficking (PACT) act, which was originally passed in 2009 and so far only applies to cigarettes and smokeless tobacco. The pact Act imposes strict requirements on shippers and is enforced by the alcohol, tobacco, firearms and explosives Administration (ATF).

The USPS rules will expire on April 26 (120 days after trump signed into law), but USPS takes time to carefully read and respond to comments received during the rule making process. The agency received more than 15700 comments - many of them from e-cigarette users responded to casaa's call for action.

Most of the information in the final rules on the application procedures for enterprise to enterprise transportation and product definition is consistent with the USPS guidance document issued in April. The final rule has no real surprises.

USPS bans nicotine and marijuana e-cigarettes

Posecca's explicit language forced USPS to prohibit the delivery of any e-cigarette products through the U.S. Postal Service.

Ends is an acronym for the electronic nicotine delivery system, but Congress is free to use the term to describe all electronic cigarette products - and it is. Despite significant resistance from marijuana industry stakeholders, USPS was forced to include equipment for marijuana in its final rules.

Gregory Conley, President of the American e-cigarette Association, said that USPS never asked Congress to give them a new task without financial support. The reality is that Congress has made too broad language, and USPS has and is obliged to apply the law in accordance with the law they have made.

The new rules exempt mail bans on business to business (B2B) transportation, transportation to consumers within the borders of Alaska and Hawaii, and limited non-commercial transportation between private individuals.

The law passed last December stipulates that the postal service shall not deliver (1) any electronic equipment that provides nicotine, spices or any other substance to users inhaled from the equipment through atomized solution to the residence; (2) Any component, liquid, part or accessory of ends, whether or not sold separately from the equipment.

Therefore, electronic cigarette equipment and its components and parts used with hemp oil or concentrate, as well as nicotine electronic cigarette products (including electronic cigarette oil) are prohibited from mailing. The rule also does not distinguish between the use of tobacco derived or synthetic nicotine products, both of which are prohibited.

USPS pointed out that products such as dry herb vaporizers, designed to evaporate hemp, rather than solutions such as electronic liquids or oils, may not meet the definition of posecca, but have been banned by USPS under separate rules. They are considered drug paraphernalia for use with federally controlled substances and cannot be mailed.

For heated tobacco products (HTP) such as iqos, these devices seem to be exempt from the mailing ban, but the supplementary package (iqos supplementary package is called heatsticks) may be eligible as cigarettes for pact implementation purposes. In essence, USPS ignored this issue and referred it to the ATF implementing the pact act.

Anyway, this is not a controversial issue now, because Altria does not sell iqos products online.

Exceptions: B2B, private, Alaska and Hawaii

The new rules exempt mail bans on business to business (B2B) transportation, transportation to consumers within the borders of Alaska and Hawaii, and limited non-commercial transportation between private individuals. The existing exceptions to allow the transportation of cigarettes for consumer testing purposes and testing by federal agencies and public health researchers have not been extended to e-cigarette products because USPS believes that Congress did not intend to do so.

Mail to or from overseas addresses is no exception - including mail sent to military or foreign service personnel through the army post office (apo), fleet Post Office (FPO), or diplomatic post office (DPO).

B2B transportation is allowed, but the process is still difficult

USPS only applies its rules on business to business Cigarette transportation to e-cigarette products, as indicated by the agency in its proposed rules. However, using this service is a cumbersome process. Even if the company chooses to use USPS to ship to the store or distributor, it must first obtain approval. The application process of B2B transportation is very difficult and will not be greatly simplified or transferred to the Internet, at least not soon.

No one knows how long it will take hundreds of e-cigarette enterprises to apply for and obtain B2B exemption. Remember, these rules will take effect immediately. There is no grace period for compliance, and there is no room for maneuver for unapproved companies.

USPS said that it is assigning more personnel to help review B2B applications, will continue to explore the feasibility of digitizing the application process, and may modify its rules appropriately later. However, for the time being, B2B exemption applicants should expect that the review of their applications may require a lot of processing time.

There are more questions than answers about the capabilities of new private delivery services simply because they have not been seriously tested.

B2B transportation process is not for convenience; Indeed, Congress is deliberately embarrassed. This is why tobacco companies use their own private truck system, regional warehouses and distribution centers, and local delivery services. They do not ship B2B packages through USPS.

For example, B2B shippers in the e-cigarette industry will need to personally deliver outgoing packages to the post office counter or commercial mail receiving place. This process is for sending 100 cases of bottled tobacco oil to stores or dealers three or four times a week. There are also strict requirements for companies receiving deliveries - after the process of using new delivery recipient and license information applications and constantly updating applications.

Due to the red tape imposed by posecca and pact acts, e-cigarette companies transporting B2B may decide to solve the problem of finding or creating private transportation networks more effectively, as we mentioned earlier this year.

"Because we expect USPS to take months or years to push enterprises through the application process to allow B2B sales," said Conley of Ava. "Further supply chain problems between independent enterprises may follow."

Specific individual exceptions

The USPS final rule will retain the provision that allows an individual to deliver a limited number of lightweight packages to another person within any 30 day period. The transaction cannot be commercial; No money can change hands.

Current tobacco regulations allow 10 packages, each weighing less than 10 ounces.

This exception can also be used to return damaged or unacceptable products to the manufacturer or seller, although it does not include the seller sending replacement products to consumers in exchange.

Alaska and Hawaii intrastate transportation

The rules allow businesses in Alaska and Hawaii to ship goods to consumers in their states. Shippers must still comply with all the rules of the pact act and cannot ship to customers outside the state.

Pact act and private delivery services

In addition to requiring USPS to issue regulations prohibiting mailing e-cigarettes, posecca also forces all e-cigarette products to join the existing prevention of all cigarette trafficking (PACT) Act (an amendment to the older federal Jenkins act). These laws were originally designed to eliminate USPS cigarette delivery, mainly to combat tax avoidance by mail order (and later online) sellers.

The pact Act imposes strict regulations on the shippers of e-cigarette products, no matter what kind of delivery service. It also supports the law through the enforcement of the alcohol, tobacco, firearms and explosives Administration (ATF) and penalties, including fines and imprisonment.

Online sellers are required by law to:

Verify the age of the customer using a commercial database

Use private transportation services that collect adult signatures at the point of delivery

Registered with ATF and the U.S. Department of Justice

Register with state and local tax administrators in all States and places where business is conducted

Collect and pay all applicable local and state taxes and affix any required tax tickets to the products sold

Every month, a list of all transactions must be sent to the tax administrator of each state, including the name and address of each customer sold, the quantity and type of each product sold, and the name, address and telephone number of the delivery personnel to the recipient

Shortly after posecca was passed, FedEx announced that it would no longer carry e-cigarettes - presumably to avoid inadvertent violations of the pact act, which it had dealt with before. FedEx is followed by UPS. (before the law was passed, DHL had made provisions prohibiting the transportation of e-cigarettes.) since then, FedEx has made some exceptions to some companies, but it can not be expected to be the delivery choice of most online e-cigarette sellers.

Since the beginning of this year, some private delivery services have begun to try to occupy a large part of the online e-cigarette transportation market. So far, there are still large areas of the country that are not covered by private delivery options - although the postal service will eventually be unable to deliver e-cigarettes to residential addresses, this situation may change.

The pact act applied to all e-cigarette product shipments in March, but most online sellers continued to ship products through USPS because they knew that the ban would not take effect until the final rules were issued.

There are more questions than answers about the capabilities of new private delivery services simply because they have not been seriously tested.

Now that the final rules of USPS have been issued, we will see a fierce debate. Online providers have no choice but to use private services, even if they are not sure how effective their work is. Consumers and businesses who smoke e-cigarettes are about to discover their dependence on the U.S. Postal Service.

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