Vapers received a giant middle finger for Christmas in the form of in what amounts to a ban on sending vaping products through the mail tucked into page 5,136 of the omnibus spending bill.
The bill, which claims to be about supporting America and Americans from the fallout of COVID-19, incongruously included language that will prohibit the mailing of vape related products (including e-cigarette devices, vape juice, and even CBD products and zero nicotine e-liquids) through the United States Postal Service (USPS). The USPS has 120 days (four months) to implement the ban.
After that, all vape and CBD products will be prohibited. The effect will be a huge rise in shipping costs for individuals wishing to avoid the dangers of the coronavirus by shopping from home--if they can get their products shipped at all.
FedEx has already announced that they will no longer allow the shipment of vape products starting March1st, 2021. That leaves UPS as the only remaining option.
On top of the higher shipping cost of mailing UPS rather than USPS, the bill also requires adult signature verification upon delivery. This will add an additional $6.70 to every order. It will also add a huge amount of hassle, as vapers will have to coordinate their deliveries around work schedules and plan to be home to sign. And that's if UPS doesn't bow to pressure as FedEx has done and refuse to ship vape packages as well.
The legislature also tacked on a virtual tsunami of paperwork, seemingly designed to burden small vape businesses into an early grave. Vape companies will be required to register with the U.S. Attorney General, the federal government and tobacco tax administrators of every U.S. state. They will have to collect all applicable state and local taxes and affix appropriate tax stamps to products. They will then have to send lists of every customer transaction to each state, reporting name, address, quantity and type of every product sold--each and every month.
The penalty for running afoul of any of these requirements, even accidentally? Up to three years in prison!
“If the increase in shipping costs wasn’t enough, the bill also imposes huge paperwork burdens on small retailers, and backs it up with threats of imprisonment for even innocent mistakes,” said Gregory Conley of the American Vaping Association in a statement. “This is not a law designed to regulate the mail-order sale of vaping products to adults; it’s an attempt to eliminate it.”
The passage of this legislation is likely to have far reaching effects on the vapor industry. Currently, there are three main outlets through which vape products can be purchased:
This bill virtually wipes out online sales leaving only chain retailers and vape shops. However, vape shops have been shuttering left and right thanks to COVID-19 shut downs and state level legislation.
Moreover, losing direct to consumer sales will make it extremely difficult for small vape manufacturers to survive. Keep in mind that vape shops buy at wholesale prices leaving very little profit to enable small companies to pay the bills. Imagine being suddenly forced to discount everything in your store by 75% while your rent, payroll, utilities and other costs remain constant and you'll get a sense of just how hard that adjustment will be for vape manufacturers.
Chain retailers continue to thrive but, surprise surprise, chain retailers only carry a small number of major brands--those owned by Big Tobacco whose sales will not be affected by this bill.
While legislators engage in virtue mongering, claiming to be protecting children from online vape sales, the true effect of the bill remains in mysterious lockstep with the interests of Big Tobacco, while also failing to accomplish the stated goal.
The CDC's 2018 National Youth Tobacco Survey showed that just 5.8% of middle and high school students were getting their vape supplies online. The vast majority were obtaining them from "friends and family," that is, after sale when vape products are used, left around the home, stolen or traded among buddies.
What this bill will likely accomplish is the death of most if not all small vape juice manufacturers and a huge rise in shipping costs for vapers. The vape juice industry barely survived 2020, when COVID-19 and the onerous PMTA filing requirements threatened to kill the industry. With the passage of this bill, 2021 promises to be even more deadly.