CORPORATE & REGULATORY ATTORNEY
After months of delay, the United States Postal Service (USPS) has issued its final rule (USPS Final Rule) pursuant to the Prevent All Cigarette Trafficking (PACT) Act. (An unpublished version of the USPS Final Rule is available here). The PACT Act generally prohibits the mailing of cigarettes but due to recent amendments, the definition of “cigarettes” for mailability purposes now includes vapor devices containing cannabis derivates.
While there was some initial hope that the USPS would carve out from its ban all hemp products, including hemp-derived CBD vapor products, the USPS Final Rule does not do so. Instead, the USPS Final Rule states that the PACT Act directly applies to all cannabis vapor products. Unless a shipper of cannabis vapor products falls under one of the PACT Act exceptions (discussed below), mailing these products remains illegal.
- In December 2021, Congress passed the Preventing Online Sales of E-Cigarettes to Children Act (POSECCA) amending the definition of “cigarettes” in the PACT Act to include “Electronic Nicotine Delivery Systems” or “ENDS.”
- In light of POSECCA, ENDS are defined to include “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.”
- Because the definition of “cigarettes” now includes “ENDS” that are used with any substance, which includes ENDS intended for use with hemp or marijuana, the PACT Act now applies to cannabis vapor products.
- The PACT Act imposes reporting, registration, labeling, and other requirements on anyone selling or shipping cigarettes, defined to include ENDS used with any substance.
- These products are now prohibited from being shipped through the USPS.
For additional background, check out our previous coverage on the PACT Act:
- You’ve Got Mail . . . Alternatives: Breaking Down the PACT Act’s Impact on Cannabis Vapes
- It Just Got A Lot Harder to Ship Hemp and CBD Vapor Products
The USPS claims that its hands were tied by including hemp and marijuana derivatives in the definition of ENDS thanks to POSECCA:
[N]otwithstanding Congress’s use of “nicotine” in the term “electronic nicotine delivery systems,” the plain language of the POSECCA definition makes clear that nonmailable ENDS products include those containing or used with not only nicotine, but also “flavor[ ] or any other substance.” It goes without saying that marijuana, hemp, and their derivatives are substances. Hence, to the extent that they may be delivered to an inhaling user through an aerosolized solution, they and the related delivery systems, parts, components, liquids, and accessories clearly fall within the POSECCA’s scope.
The USPS Final Rule goes on to elaborate on why non-nicotine ENDS products are prohibited based on its statutory interpretation of POSECCA:
The POSECCA defines ENDS products in relation to their delivery of “nicotine, flavor, or any other substance.” 15 U.S.C. 375(7)(A). Through use of this list and the disjunctive “or,” this language is clear on its face: covered ENDS products may be used to deliver nicotine, or they may be used to deliver flavor, or they may be used to deliver any other substance (with or without nicotine or flavor). For this reason, the Postal Service observed in the notice of proposed rulemaking that, “[d]espite the name, an item can qualify as an ENDS product without regard to whether it contains or is intended to be used to deliver nicotine; liquids that do not actually contain nicotine can still qualify as ENDS, as can devices, parts, components, and accessories capable of or intended for use with non-nicotine-containing liquids.”
The USPS Final Rule points out that products containing THC were already prohibited from being shipped through the USPS because marijuana and THC are independently listed as Schedule I substances under the Controlled Substances Act (CSA).
When it comes to hemp, however, the USPS Final Rule acknowledges that hemp and hemp derivatives are not per se nonmailable, but hemp-containing ENDS are:
[H]emp and hemp derivatives with no more than 0.3 percent THC by dry weight—are not subject to CSA-based mailability restrictions, and items used with such substances (and not with controlled substances) may fall outside the definition of drug paraphernalia. As such, those substances continue to be mailable generally, to the extent that they are not incorporated into an ENDS product or function as a component of one. To the extent that they do comprise or relate to an ENDS product, however, then that product is now nonmailable under the PACT Act and POSECCA, except pursuant to a PACT Act exception.
Put another way, you can mail hemp products, you just can’t mail hemp vapor products.
ATF and State-Level Regulation
The USPS Final Rule also acknowledges that “the PACT Act requires manufacturers to register and certify tax compliance to State and local authorities, yet some States and localities do not specially tax non-nicotine related ENDS products.” For example, anyone manufacturing or selling cigarettes must register with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) and the taxing authority in each state. As we have written before, the ATF and state agencies do not have experience with hemp and marijuana vapor products and it is unclear how manufacturers and distributors of cannabis vapor products can comply with these requirements. The USPS Final Rule basically says “not my problem” (in reality the USPS said that these comments were “misdirected”) and indicates that the ATF and these state agencies will have to deal with this confusion through their own rule and policy making.
There are several exceptions to the PACT Act’s blanket ban on shipping ENDS through USPS:
- Intra-Alaska and Intra-Hawaii Shipments
- Business/Regulatory Purposes – This exception is limited to federal and state agencies and legally operating businesses that have all applicable state and federal licenses or permits. Mailing is only allowed for business purposes between eligible businesses or for regulatory purposes between such businesses and government agencies.
- Exception for Certain Individuals – Individuals may mail small quantities of ENDS to individual adults for noncommercial purposes. Noncommercial purposes refer to gifts between adults, product returns (so long as the refund or credit does not exceed the value of the defective product), products returned to manufacturer for recycling purpose without compensation, and other similar shipments.
- Consumer Testing
- Public Health Exception – This covers government agencies involved in consumer testing.
The USPS Final Rule includes details on how to use these exceptions and what steps the shipper must take (e.g., labeling the package to say “PERMITTED ENDS MAILING—DELIVER ONLY UPON AGE VERIFICATION”). Shippers seeking one of these exceptions must first apply to the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
In addition to these exceptions, a vapor product is excluded from the definition of ENDS if it is approved by the Food and Drug Administration for sale as a tobacco cessation product or any other therapeutic purpose and is marketed and sold solely for such purposes. As of this writing, no such vapor product containing hemp or marijuana exists.
Daniel Shortt CORPORATE & REGULATORY ATTORNEY