electronic_cigarette
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What the PACT Act means for the wholesale vapor industry https://ift.tt/2KHGdXG

Hey everyone. My name is Nick and I work for Mister-E-Liquid. I know that the PACT Act is creating a lot of buzz in the industry, along with a lot of confusion. I figured I'd share what we know to this point so vape store owners, wholesalers, manufacturers, and distributors can get a better idea of what this all means.

We've put out a few videos on this recently but reading is king.

WHAT IS THE PACT ACT?

The PACT Act and the Jenkins Act are the highest-profile subjects in the vapor industry right now, with many predicting it will mean the end for online vape sales, but what is bad for online vendors is good news for local vape shops, with customers soon having no alternative but to get their favorite brands locally. This legislation will mean massive regulatory changes for manufacturers but should have few impacts on local retailers in terms of new legal burdens. Nevertheless, we recommend anyone who is shipping vape juice – in any quantities at all, to any destinations – discuss the subject with legal counsel.

ONLINE RETAILERS

We've discussed how the amendment of the PACT Act to include vapor products will impact on online retail in our video – The End of Online Vape Sales in the U.S., but to summarize, this addition to the federal budget is a successful attempt by anti-vaping legislators to cripple the online vaping market, starting March 28, 2021. By amending the Jenkins Act to classify any vape juice or anything relating to vaping – such as coils, tanks, and mods – as "cigarettes", the newly-amended PACT Act places the same regulatory burdens on vapor as are currently levied on cigarettes.

This means shipping becomes prohibitively expensive if not impossible. The USPS will be forbidden from carrying vapor products, and FedEx is soon following suit, with UPS expected to follow. Any private carrier who transports cigarettes will incur massive legal and regulatory risks, including identification checks and extensive documentation, with penalties including huge fines and even jail time. Furthermore, cigarettes carry a tremendous burden of documentation with any jurisdiction they're moved from or to, with 3,000 different "local" jurisdictions each having their own restrictions and requirements.

VAPE MANUFACTURERS

With online retail too complex to consider for the vast majority of companies, the alternative for manufacturers will be the wholesale distribution model that's already in place: manufacturers, like ourselves, will ship their product to local vape shops, navigating the legal and regulatory obstacles of the jurisdictions at each end (and in between), and negotiating with a private carrier for bulk delivery of retail-packaged products. Even there, the risks are high for the manufacturer. Failure to accurately document every shipment correctly by the terms of all the various jurisdictions involved (federal, state, county, township, city, etc) can lead to substantial fines and penalties, particularly if intent is established. The first offense is a $5000 fine or 2% of the previous year's sales and possible felony charges resulting in up to 3 years in jail. The second offense is $10,000 or 2% of the previous year's sales and possible felony charges resulting in up to 3 years in jail.

LOCAL BRICK AND MORTAR VAPE SHOPS

Fortunately for the local vape shop owner, not much is going to change. Business should steadily pick up this year, for various reasons. Shipping from your manufacturers might get more expensive, and they might make you sign more forms than before, to receive shipments. But largely, from a legislative standpoint, not many changes for vape shop owners.

However, over the years, many shops have built up informal distribution networks: you and a buddy have all the juice sent to your shop, and then he just picks up his share on the way home; you have a buying agreement with a few shops in town where you drive around delivering a bulk order to various members of your buyer's group; you've got multiple stores and do your own direct distribution between them. Whatever the case may be, particularly if you transport vape juice or any vaping products, and obviously if you manufacture and distribute it, we highly recommend you discuss the matter with legal counsel.

WHAT NOW?

From here, we will continue to provide updates as they come to the interpretation of the new legislation and how it changes. Enforcement on these acts is carried out by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Our plan is to follow all legal and regulatory compliance actions necessary to continue supply, but with how major of a change this creates, the industry is 100% going to change. I'm not a lawyer but if anyone has any questions about all of this, we're happy to help.

Hey everyone. My name is Nick and I work for Mister-E-Liquid. I know that the PACT Act is creating a lot of buzz in the industry, along with a lot of confusion. I figured I’d share what we know to this point so vape store owners, wholesalers, manufacturers, and distributors can get a better idea of what this all means.We’ve put out a few videos on this recently but reading is king.WHAT IS THE PACT ACT?The PACT Act and the Jenkins Act are the highest-profile subjects in the vapor industry right now, with many predicting it will mean the end for online vape sales, but what is bad for online vendors is good news for local vape shops, with customers soon having no alternative but to get their favorite brands locally. This legislation will mean massive regulatory changes for manufacturers but should have few impacts on local retailers in terms of new legal burdens. Nevertheless, we recommend anyone who is shipping vape juice – in any quantities at all, to any destinations – discuss the subject with legal counsel.ONLINE RETAILERSWe’ve discussed how the amendment of the PACT Act to include vapor products will impact on online retail in our video – The End of Online Vape Sales in the U.S., but to summarize, this addition to the federal budget is a successful attempt by anti-vaping legislators to cripple the online vaping market, starting March 28, 2021. By amending the Jenkins Act to classify any vape juice or anything relating to vaping – such as coils, tanks, and mods – as “cigarettes”, the newly-amended PACT Act places the same regulatory burdens on vapor as are currently levied on cigarettes.This means shipping becomes prohibitively expensive if not impossible. The USPS will be forbidden from carrying vapor products, and FedEx is soon following suit, with UPS expected to follow. Any private carrier who transports cigarettes will incur massive legal and regulatory risks, including identification checks and extensive documentation, with penalties including huge fines and even jail time. Furthermore, cigarettes carry a tremendous burden of documentation with any jurisdiction they’re moved from or to, with 3,000 different “local” jurisdictions each having their own restrictions and requirements.VAPE MANUFACTURERSWith online retail too complex to consider for the vast majority of companies, the alternative for manufacturers will be the wholesale distribution model that’s already in place: manufacturers, like ourselves, will ship their product to local vape shops, navigating the legal and regulatory obstacles of the jurisdictions at each end (and in between), and negotiating with a private carrier for bulk delivery of retail-packaged products. Even there, the risks are high for the manufacturer. Failure to accurately document every shipment correctly by the terms of all the various jurisdictions involved (federal, state, county, township, city, etc) can lead to substantial fines and penalties, particularly if intent is established. The first offense is a $5000 fine or 2% of the previous year’s sales and possible felony charges resulting in up to 3 years in jail. The second offense is $10,000 or 2% of the previous year’s sales and possible felony charges resulting in up to 3 years in jail.LOCAL BRICK AND MORTAR VAPE SHOPSFortunately for the local vape shop owner, not much is going to change. Business should steadily pick up this year, for various reasons. Shipping from your manufacturers might get more expensive, and they might make you sign more forms than before, to receive shipments. But largely, from a legislative standpoint, not many changes for vape shop owners.However, over the years, many shops have built up informal distribution networks: you and a buddy have all the juice sent to your shop, and then he just picks up his share on the way home; you have a buying agreement with a few shops in town where you drive around delivering a bulk order to various members of your buyer’s group; you’ve got multiple stores and do your own direct distribution between them. Whatever the case may be, particularly if you transport vape juice or any vaping products, and obviously if you manufacture and distribute it, we highly recommend you discuss the matter with legal counsel.WHAT NOW?From here, we will continue to provide updates as they come to the interpretation of the new legislation and how it changes. Enforcement on these acts is carried out by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Our plan is to follow all legal and regulatory compliance actions necessary to continue supply, but with how major of a change this creates, the industry is 100% going to change. I’m not a lawyer but if anyone has any questions about all of this, we’re happy to help.

Submitted January 22, 2021 at 12:50AM by KurtzMedia
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