The vape industry was shocked by the December 2020 ban on the delivery of vaping products through the largest shipping couriers in the USA. This has put participants within the vaping industry on high alert. The government has always seemed biased in passing laws enforceable in the vaping industry. Today we’re going to cover the possible impacts of the Vape Mail Ban to the industry.
Let’s get into it..
The US Government is killing the vape scene through PACT legislation
Who was not surprised with the 5,500-page federal COVID relief legislation that passed in December 2020 that banned the United States Postal Service (USPS) from shipping virtually any kind of vaping or e-cigarette product (e-liquids, devices, DIY products) to businesses and individuals. The legislation is called the Prevent All Cigarette Trafficking (PACT) Act or in simpler terms - the "Vape Mail Ban".
The PACT Act unfortunately triggered all major U.S. shipping providers to jump on board with banning vape products while the bill only covers USPS.
Some important announcement by the major delivery companies:
- USPS: Banning all vapor products on or around April 27. Exact date not yet clear.
- UPS: Banning all vaping products on April 5, 2021.
- FedEx: Stopped shipping vapor products on March 1, 2021.
- DHL: Already banned the shipment of vapor products.
Recipients of all vaping products purchased online currently will be required by law to present ID and sign for their delivery effective on March 28, 2021. The U.S. Postal Service ban on mailing vaping products will then go into effect on April 27, 2021. After this date, customers will no longer be able to receive vaping products by way of delivery via USPS / UPS / FedEx / DHL.
The Vape Mail Ban effectively covers business to business shipments as well as business to consumer shipments. This means it will be harder for manufacturers to ship their products to distributors and individual vape shops/dealers. Consumers will also suffer as their local vape shops will be unable to ship products to them.
The PACT Act has forced many companies to discontinue their U.S. online sales and even cease operations altogether. Among the most recent vape shops to announce the end of their business are Elevated Vaping in Houston, Texas, and the Vape Spot in Los Angeles, California. Freeman Vape Juice, a vaping company in Livermore, California, posted on their website. "We suggest to all our customers to order and stock up now, the future does not look bright.”
US manufacturers of e liquids will likely be vulnerable
American Vaping Association president Gregory Conley told Vaping360 that the vape industry is “a very competitive market, so companies are going to try to meet customers’ needs without going bankrupt,”. Minimum order sizes will likely increase and product selection and flavor choices may decrease as large retailers look for ways to streamline their operations.
Moreover, this would cause USA manufacturers to lose many customers not only from the USA but from all over the world. Those USA manufacturers with large exports overseas may still choose to continue if they are able to find a delivery partner that is willing to help them export their products, while those that sell primarily to USA based consumers will likely struggle to continue.
Even companies overseas reported supply chain disruptions as a result of the Vape Mail Ban. While some of these companies still have the faith to stay in business, others do not. If everyone chooses to close their business, what happens to vapers out there, especially in the USA?
What about Malaysian e liquids manufacturers?
Those Malaysian e liquids manufacturers who sell to the US will also likely feel the impact of reduced sales and difficulty in distributing their products to US based vape shops/dealers. Those brands that do not sell much to the US will likely see little impact to their operations.
Rising shipping costs
As a result, many vaping companies are searching for alternative shipping and logistics companies willing to ship vaping products that are other than USPS / UPS / FedEx / DHL. However, it is expected that these alternative shipping companies are probably higher in cost, have limited coverage areas (at least for now) and do not have the high tech IT infrastructure in place to handle large volumes of shipments.
Gregory Conley, president of The American Vaping Association said that, if the increase in shipping costs wasn't enough, the bill also imposes a huge burden of paperwork on small retailers (state taxation filing, age verification filing and other disclosure and verification paperwork) and backs it up with threats of imprisonment for even innocent mistakes. He continued, “this is not a law designed to regulate the mail-order sale of vaping products to adults; it’s an attempt to eliminate it.”
A ban on vape delivery will likely result in an increase in the price of all vape products, from devices, e juice as well as DIY items for all parties - for businesses at first and ultimately to consumers.
Most vape shops operate on a small scale and they have to pay for more expensive shipping than usual. They need to increase prices charged to consumers in order to survive.
It’s likely that some customers will soon be unable to legally obtain the vaping products they want (at least for a time) and will need to stock up or make other plans to get products. There will probably be many smaller online retailers unable to survive the consequences that lie ahead.
Effect on the Vape Mail Ban on Punk Juice Vape Store:
- As the vape mail ban continues to be enforced, we may not be able to stock up on all your favorite USA made brands of e-liquids. Some smaller brands may close permanently. Some brands will impose higher minimum order quantities; and may take a longer time to ship their products to Malaysia where we are located. This makes restocking USA branded products slow and difficult if/when demand increases.
- It is hard to tell at this point in time, but we think that certain large brands like Kilo Eliquids, Naked 100, BLVK Unicorn and other larger manufacturers may be resourceful enough to find a way to keep sending their eliquids to Malaysia. So thankfully, we can continue to sell these certain brands and continue to ship them to you if you live outside of the USA.
- We have no visibility on the future prices of USA made e-liquids although we think that there is a good chance that prices will generally trend upwards. By how much, we don’t know, only time will tell.
- If you live outside of the USA, the vape mail ban does not affect you and we will keep shipping products to you. There are no restrictions imposed by our shipping partners if you live outside of the USA.
- If you are located in the USA, DHL will not accept vaping products anymore. We are exploring other shipping providers that are willing to ship vaping products to you in the USA. We are not sure of the shipping costs as of the date of this article.
Who will survive this crisis?
Veteran industry, Geoff Habicht stated that companies that have “the cash flow, or the reserves, to survive the next three or four months of total uncertainty, will survive. Companies that can’t face several weeks or months of disturbance to their income probably won’t make it.”
The vaping industry is working hard to develop logistical solutions that will allow USA deliveries to continue, at least for some companies and certain coverage areas. And while progress is being made, the vape shipping and sales landscape is about to change radically for both vapers and the businesses they buy from.