The “Preventing Online Sales of E-Cigarettes to Children Act” (PACT Act) passed in December 2020 has a significant impact on the logistics of shipping vape-related products. The regulation affects items that contain nicotine, cannabis, or cannabidiol (CBD,) as well as flavor-only juices, herbal extracts used for aromatherapy, and vaping devices.
All major national carriers have decided to stop serving retailers in the space due to the many new restrictions around vape shipping.
Some large online sellers have applied for exemptions so they can continue shipping vaping products through these major carriers, but they were rebuffed. These big logistics companies simply aren’t ready to handle the complex requirements needed to help their customers stay compliant with the PACT Act.
This shakeup in logistics requirements puts many vape retailers in a pickle. You can no longer depend on carriers you have used in the past to handle future deliveries but cobbling together a vape shipping network is too expensive and complex an undertaking for most vape retailers.
The Complexity of Building a Vape Shipping Network
To ship vape products to consumers, you need to register with the Bureau of Alcohol, Tobacco, Firearms and Explosives (AFT), as well as the Attorney General. Then, you have to set up your ecommerce system to verify each customer’s age via a commercial database (a pop-up that asks if the visitors are 18 or older won’t cut it!). You must use a private shipping service that will collect an adult signature at the point of delivery.
You also need to follow strict labeling, record-keeping, and state reporting requirements. Interstate shippers need to report sales to state tobacco tax administrators, pay applicable state and local taxes, and affix required tax stamps to the products sold. Plus, you have to file a monthly report with the state tobacco tax administrator and other local or tribal entities that will receive tax payments from the sale of vape products.
Furthermore, vape retailers must report all transactions to each state’s tax administrator every month. The report has to include the name and address of each customer, the quantities and type of the items sold, as well as the name, address, and phone number of the person who delivered the shipment to each customer.
As for B2B shipping, even if the USPS would start to accept applications for B2B vape accounts, the process will be cumbersome. We can take cues from the requirements for B2B tobacco shipping and expect similar regulations; you need to provide the names and addresses of all the customers in your application and get the USPS’s approval any time there’s an update. Also, packages have to be carried to the post office and processed in an in-person transaction. You will need to have a form filled out for each order with your PACT eligibility number and other information.
These changes will make shipping vape products a struggle for most retailers. Putting the necessary systems and processes in place to handle the logistics will be costly, time-consuming, and labor-intensive. The complexity of these regulations is even making major national carriers throw up their hands!
How Can Retailers Ship Their Vape and e-Cigarette Products?
If you have been wondering whether building a vape shipping network on your own is a good idea, now you probably realize that the answer is a definitive “no.”
The good news is that you don’t have to navigate the logistics of vape shipping alone. X is building a vape shipping and delivery network to serve residential customers in selected areas (with more to follow as we grow!) We have analyzed the laws and regulations of the most commonly shipped-to locations and work with shipping partners in those areas to build a delivery network that is fully compliant with the PACT Act.
Building a vape shipping network from the ground up has its benefits and challenges. It is a difficult process that involves many moving parts. Launching it under the watchful eye of the ATF does not allow room for mistakes. However, setting everything up from scratch also gave us the opportunity to ensure that all the pieces work together seamlessly to provide the most cost-effective shipping solution to our customers.
All the drivers in our vape delivery network are trained to adhere to all federal requirements. Shippers will be able to track custody of each package, as required by the PACT Act. Our system is set up so that you can quickly compile all the information you need for monthly PACT Act reporting.
We will help you ensure that packages stay within the 10-pound weight limit as required by regulations. A sticker bearing the required legal text will be affixed to each box by the shippers; however, we audit each package to ensure this label has properly adhered to the package. We also have the processes in place to verify the purchaser’s age and obtain the required signature of an adult at each vape-related delivery.
By leveraging the latest technology and in-motion supply chain assets, we can optimize shipping time and cost for our customers. Due to the complex shipping and logistic processes, the shipping cost will be slightly higher but will not be too far from what the USPS would charge for a delivery that requires an adult signature.
Building this vape shipping network is also a reflection of our company’s value. We support the strongest compliance rules to prevent minors from purchasing vape products but we also believe in providing of-age adults the freedom of choice by enabling affordable residential vape product delivery.