It Just Got A Lot Harder to Ship Hemp and CBD Vapor Products

Recent changes (covered here) to the Prevent All Cigarette Trafficking Act (the “PACT Act”) by the Consolidated Appropriations Act, 2021 (the “Appropriations Act”), a COVID-19 relief bill signed into law on December 27, 2020, will bar the US Postal Service (USPS) from delivering hemp vapor products directly to consumers as of April 26, 2021 (120 days after the passage of the Appropriations Act).

In the aftermath of the Appropriations Act, both UPS and FedEx have announced they will no longer ship vapor products for home delivery. According to reporting from Vaping360, starting April 5, 2021, “UPS will not transport vaping products to, from, or within the United States due to the increased complexity to ship those products.” FedEx will end shipments on March 1, 2021. The leaves manufacturers of hemp vapor products with fewer options for shipping their goods to consumers.

 The prohibition on mailing of hemp vapor products comes as a result of the broad language inserted into the PACT Act by the Appropriations Act. The PACT Act states that all cigarettes and smokeless tobacco are “non-mailable and shall not be deposited or carried through the mails.” 18 USC 1716E (a). The Appropriations Act amends the definition of “cigarette” to include Electronic Nicotine Delivery Systems (ENDS). ENDS are defined as any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device,” including “an e-cigarette; an e-hookah; an e-cigar; a vape pen; an advanced refillable personal vaporizer; an electronic pipe; and any component, liquid, part, or accessory of a device described [above], without regard to whether the component, liquid, part, or accessory is sold separately from the device,” (emphasis added).

The PACT Act was enacted in 2010, the same year that the Tobacco Control Act (“TCA”) gave the Food and Drug Administration (FDA) authority over tobacco products.  In 2016, the FDA expanded its regulatory authority to include vapor products, e-cigarettes, cigars, pipes and waterpipes in the definition of tobacco products. According to the FDA, “Covered tobacco product means any tobacco product deemed to be subject to the Federal Food, Drug, and Cosmetic Act[,] but excludes any component or part that is not made or derived from tobacco.” 21 CFR 1140.3. The FDA has consistently limited its regulatory authority to vapor products containing tobacco or nicotine, which would not include hemp vapor products free of tobacco or nicotine.

In guidance for the tobacco industry, issued last year, the FDA stated that it “does not address products that are not tobacco products” and that only “[l]iquids that do not contain nicotine or other material or derived from tobacco, but that are intended or reasonably expected to be used with or for the human consumption of a tobacco product, may be components or parts and, therefore, subject to FDA’s tobacco control authorities” (emphasis added).

This regulatory word-soup means that hemp vapor products cannot be shipped through the USPS, even though these products appear not to fall in the FDA’s jurisdiction over tobacco products. That makes it challenging to determine how the PACT Act applies to hemp vapor products, beyond just the issue of whether these products can be deposited into the mailbox.

For example, under the PACT Act, cigarettes (defined to include hemp vapor products) mailed 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,” are allowed (emphasis added). There does not currently exist a federal regulatory framework for hemp vapor products, meaning there is not an established licensing or permitting system across state and federal agencies. This means that it is unclear as to whether the business purposes exception would apply to a hemp vapor shipment made between two businesses because these “licenses or permits” required by the PACT Act may not exist.

 The PACT Act goes beyond preventing the USPS from delivering certain smokable products. Manufacturers must comply with the PACT Act regardless of how their products are distributed.

Some of the PACT Act requirements are codified in 15 USC 376a (a):

• The shipper must include on the outside of the shipping package a statement that the package contains cigarettes, and that federal law requires payment of excise taxes and compliance with licensing requirements.
• Shipments may not exceed 10 pounds.
• Upon delivery the person receiving the package must verify that they are of legal age. The purchaser must provide their name, birthdate, and address and the seller must verify that information using a commercially available database.
• Shipper must comply with all state, local, tribal, and other laws applicable in the jurisdiction where the products are being shipped, including excise taxes, licensing and tax-stamping requirements, restrictions on sales to minors, and other payment obligations or legal requirements relating to sale of vapor products.
• Shipper must maintain records of every sale made in the last four years.

These requirements are difficult to adhere to, given there is no regulatory framework for non-tobacco vapor products. Even if a hemp vapor product manufacturer finds a company to ship its products to consumers, (which is likely to be expensive given that USPS, UPS, and FedEx are no longer an option), it must comply with the PACT Act.

We will continue to monitor the roll out of the PACT Act as it applies to hemp vapor products. If you are wondering what this means for your business, do not hesitate to contact Green Light Law Group.

You can contact Daniel Shortt at info@gl-lg.com or (503) 488-5424.