Companies that import, market and distribute vaping products will see significant changes to their businesses due to a major modification in the scope of products subject to the Prevent All Cigarette Trafficking (PACT) Act. The Consolidated Appropriations Act, 2021, which was signed into law on December 27, 2020, adds “electronic nicotine delivery system” to the definition of a “cigarette” in 15 U.S.C. 375(2)(A). The definition of an electronic nicotine delivery system is broadly worded to cover “any electronic device that, through an aerosolized solution, delivers nicotine, flavor, or any other substance to the user inhaling from the device,” and includes:
15 U.S.C. 375(7)
Products determined to be included in the definition of an electronic nicotine delivery system are subject to a number of registration, labeling, delivery, tax, reporting and record-keeping requirements, which include:
Cigarettes/Smokeless Tobacco: Federal Law Requires the Payment of all Applicable Excise Taxes, and Compliance with Applicable Licensing and Tax-Stamping Obligations.
What this means to you
These changes are set to start on March 28, 2021, with regulations from the U.S. Postal Service expected by April 26, 2021. Given the breadth of the definition, we are assisting a range of companies affected by these changes. Any business involved in any aspect of the vaporizer industry, whether business-to-business, cannabis-based liquid products, vaporizer accessories or nicotine e-liquids, should review their business operations and develop a strategy to address the PACT Act requirements.