It’s a new year, and with the new year comes new laws that are to take effect, and for the cannabis and vape industry - these laws may not be as promising for the future of the industry. We’ve seen several states take a stance against vaping specifically, and added to the list are Illinois and Oregon. This article will cover everything you need to know about what this means for the vape community in these states moving forward.

Illinois

As of January 1st, 2022, the state of Illinois has passed a new bill, namely Illinois Senate Bill 00512 - The “Preventing Youth Vaping Act” which was sponsored by Sen. Julie Morrison and Rep. Bob Morgan. This bill is as the name suggests; a bill that creates additional restrictions and regulations on e-cigarettes, aiming to prevent vaping by children. So, what does this act mean for Illinois?

First of all, the law defines an e-cigarette as;

• A device using a battery or other mechanism to heat a solution, resulting in vapor for inhalation.
• Any container of a substance that is intended to be used in the device or used to refill the device.
• Any substance that is intended for use in the device.

According to the Illinois attorney general, the act is intended to do the following;

“Address the epidemic levels of youth e-cigarette usage by prohibiting companies from marketing products to minors.”

The state has clearly stated its interest and belief in encouraging the youth to live vape-free. While vaping is a controversial topic in regards to health, the state has a strong stance in stepping towards keeping these products out of the hands of anyone younger than 21 years old. This bill, however, also poses a challenge to the industry by limiting companies from directing their advertising and marketing.

While most people may stand by the age-restricted purposes of this bill, this legislative change poses nuanced difficulties to companies that offer these products and results in fines of up to $25,000 as well as a 1-3 year prison sentence if found guilty. The bill complicates marketing these products by stating the following rules:

1. Companies can not market vape products as modified risk tobacco products
2. Companies can not market a vape product as providing smoking cessation benefits unless approved by the FDA.
3. Companies can not market vape products in a way that appeals to or encourages any person under the age of 21 to use them.

As online tobacco and e-cigarette sales continue to grow, the new law and restrictions as listed above seek to prevent minors from purchasing e-cigarettes by requiring online retailers to take steps to ensure that purchasers are at least 21 years old. The state goes as far as urging the FDA to ban flavored tobacco products and to strengthen e-cigarette guidance by prioritizing enforcement actions against flavored e-cigarettes.

The only exception currently stands for the following;

“Electronic cigarettes first sold prior to August 8, 2016 and for which a premarket tobacco product application was submitted to the U.S. Food and Drug Administration by September 9, 2020”

e-cigarettes that utilize synthetic (tobacco-free) nicotine or CBD-containing e-cigarettes, for example, that arguably are not tobacco products under federal law, would not be considered adulterated in Illinois for not having authorized PMTAs.

Oregon

As of January 1st, 2022, the state of Oregon passed House Bill 2261 which prohibits remote sales of inhalant delivery systems. This new legislation prevents any businesses involved in selling vape products from shipping or mailing any products that may have been purchased online or by other distant means. This means that the only sales permitted are in-person sales.

These restrictions do not, however, apply to freight forwarders or motor carriers. Apart from that exception, no retailers or businesses may sell smokable tobacco products unless the purchase was made face-to-face.

‘Inhalation delivery systems’ refers to anything that is one of the following;

“A device that can be used to deliver nicotine in the form of a vapor or aerosol to a person inhaling from the device; or a component of a device described in this paragraph or a substance in any form sold for the purpose of being vaporized or aerosolized by a device described in this paragraph, whether the component or substance is sold separately or is not sold separately.”

According to that description, the following products fall into the Oregon HB 2261 Shipment ban:

• Bottled e-liquid (with or without nicotine)
• Closed-system ENDS (e.g. pod/cartridge or disposables) pre-filled with non-nicotine and nicotine-containing e-liquids
• Open-system devices
• Open-system/Open-tank ENDS device

This means that the legislation appears to restrict the DTC sale of most types of vapor products.

The implementation of this bill was put forward due to the FDA reporting that 3.6 million middle and high school students were current users of e-cigarettes In 2020. While the FDA finalized a rule in 2016 that included ENDS in the definition of a tobacco product, the majority of regulation of these products is left to the states. Supposedly, despite the current regulations that were passed in 2017 - the state insisted that the regulations still make it relatively easy for minors to obtain products online.

A device is considered adulterated if:

1. It consists of any poisonous, deleterious or filthy substance that may render injuries to health.
2. It is held or packaged in containers composed of any poisonous or deleterious substance.

Considering these new legislations, it is clear that further restrictions are being imposed on the states around the U.S. and pose challenges to the vapor industry. While these new bills are proposed to provide a safer environment for minors, it should be asked whether this is a step forward or a step backward in the industry.

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If you've been tracking the USPS Vape Mail Ban over the last few months, or have only recently come across the term for the first time, The Postal Service's ruling has dramatically shifted the entire market and raised havoc in the vaping community.

The 116th Congress originally expressed concern about children getting tobacco products cheaply and easily through the sales of tobacco and smokeless tobacco through illegal Internet or contraband sales, which resulted in the title of the Preventing Online Sales of E-Cigarettes to Children Act (“POSECCA”), which was passed in 2009. Modifying the PACT Act’s definition of “cigarettes” to extend to ENDS products now poses additional challenges.

On December 27, 2020, as a part of the “Consolidated Appropriations Act, 2021,” Congress had conversations to include e-cigarettes and all vaping products in a nationwide mailing ban. All major carriers like DHL, UPS, and FedEx announced they would join USPS and no longer be available to sellers of vaping products to ship their goods to customers. The discussion continued to suggest amendments, which would mean that the act was expanded to include e-cigarettes and any Electronic Nicotine Delivery System (ENDS) - hence the delays in the final ruling.

The PACT Act requirements summarized above apply to ENDS effective 90 days from the date of enactment on or about March 28, 2021. The registration and reporting requirements were to apply to all sales, including business-to-business sales. Companies were warned to plan well before the effective date to ensure that they were fully compliant with existing state sales and excise taxes, licenses, and registrations. Companies anticipated the mail ban going into effect on or about April 27, 2021, which was delayed for further discussion and amendments.

The United States Postal Service issued a final rule on October 21st, 2021 that put an end to delivering all vape products through the U.S. Mail. The new USPS rule took effect immediately after publication in the Federal Register, ultimately impacting the vape and e-cigarette community. This new law, commonly referred to as the “PACT Act,” stipulated that vaping products would essentially be classified under the same rules that apply to combustible cigarettes, stating the following;

“Incorporate new statutory restrictions on the mailing of electronic nicotine delivery systems. Like cigarettes and smokeless tobacco...”

What does the new ban cover?

The USPS does note that shipping hemp that contains less than 0.3 percent THC is still federally legal, so long as it is not included in a vaping product. The agency also notes that there are other exclusions to this new rule:

• Intrastate shipments within Alaska or Hawaii.
• Consumer Testing: Limited shipments of cigarettes sent by verified and authorized manufacturers to adult smokers for consumer testing purposes.
• Shipments between verified and authorized tobacco-industry businesses for business purposes or between such businesses and federal or state agencies for regulatory purposes.
• Limited shipments of cigarettes by federal agencies for public health purposes under similar rules applied to manufacturers conducting consumer testing.
• Lightweight, non-commercial shipments by adult individuals, limited to 10 shipments per 30-day period.

The final summary of the rule as stated in the federal register stipulates the following, however;

“Ends products are generally nonmailable, except as authorized by an exception, and then only if all PACT-Act-related and non-PACT-Act-related conditions of mailability are met.”

The rule includes ENDS products that comprise of any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device; and any component, liquid, part, or accessory of an ENDS, regardless of whether sold separately from the device.

Some people expressed concern that CBD products could fall under the health exemption to the general ban, but USPS said that would not apply unless and until the Food and Drug Administration (FDA) approves any such products. These regulations concern the industry, forcing vape manufacturers and retailers to use more expensive private courier services. This cost will likely be passed on to customers.

However, the Postal Service determined that the PACT Act exceptions cannot be applied to inbound or outbound international mail or mail to or from the Freely Associated States. The Postal Service cannot carry out the PACT Act's verification requirements in places where it does not interact directly with ‘shippers and addressees.’ This means that all cigarettes and smokeless tobacco in these cases will continue to be nonmailable, without exception, and the same will be true of ENDS products.

Mailing and shipping Complications

As you can imagine, The rule’s applications towards businesses and manufacturers, as well as other senders, was a significant area of discussion. The act states that approved shippers’ mailings have to allow for age and identity verification at delivery and must tender items in a face-to-face transaction either at a Postal Service retail office or at a Postal Service business mail acceptance location. The federal register clarifies this here;

“Those conditions include postal service verification of the sender and the recipients respective eligibility, as well as the recipients age and employee status;”

Businesses also have to undergo a complicated verification process, which the postal service has adopted. Potential senders have to submit an application in advance to the Postal Service’s Pricing and Classification Service Center - once verified, only then can the sender be considered. The exceptions, however, are causing chaos in the industry as thousands of potential senders are applying all at once for exemption. Due to the abrupt implementation of the rule, no grace period or leeway was provided for companies that did not apply before it came into effect.

B2B shipping seems to have been intentionally made difficult by Congress to be difficult. According to the rule, it requires senders to personally deliver packages to a post office which is almost impossible to do if numerous products are going out at once - making it impractical for B2B shipping altogether. This is leading to the complication of companies scrambling to find private mailers.

What does this mean for the industry?

There’s a huge cause for concern in the industry. Not only is this sending shockwaves through the vaping community for its sudden implementation, but it also means that companies are panicking and finding ways to mail illegally. Those who don’t align with the rules are still mailing products, knowing that their products may be seized. These are the same companies that have non-refundable policies and are negligently shipping THC-O products, too.

While this is not an all-out ban on online sales, most small vapor businesses do not have the infrastructure or ability to comply with these rigorous requirements. The inability to take the legal route explains why these companies are still taking extreme measures to secure themselves in the case of product seizing. Take, for example, this companies refund policy;

“Shipping charges are non-refundable.”, and “if [a refund] is requested it will be in the original form of payment.”

Another company stated the following in their return policy;

“Once we receive the items and approve the return, we will… issue the payments of the product if it is for a refund.”

Most return policies are careful to state that they will only issue refunds IF the products are returned to the sender, which is essentially impossible if they are seized. It is clear that companies are finding loopholes at the expense of their customers. We urge you to read more into the companies you are buying from. Any companies that continue to promise products despite the complicated regulations surrounding them should be approached with caution.

The continued ignorance of companies continues at the expense of customers like you; the question is, how far are they willing to go?

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