Opinion: Federal Power Grab Endangers Cannabis Vaping Industry

By Dana E. Shoched.

Make no mistake, the mail ban in last year’s stimulus bill is an attempt to wipe out small operators, attack legal-cannabis states and limit patient access to medicine

Hidden deep inside last December’s federal stimulus bill there was an attack on the legal cannabis industry, the rights of states to govern themselves, the sanctity of the individual vote and the ability of patients and U.S. veterans to obtain the cannabis medicine they need. Ignored and dismissed by most media outlets, the missive was tucked away on page 5,136 of the Consolidated Appropriations Act, making it easy to miss. Unfortunately, those who have noticed it have mostly failed to recognize its damaging potential. 

While it may sound beneficial, the Preventing Online Sales of E-Cigarettes to Children Act represents an outright assault on the cannabis vaping industry, and constitutes a deliberate attempt to circumvent state and voter’s wishes. The cannabis industry, as well as state’s and voter rights advocates would be fools to blithely dismiss it. Here’s why the act is so dangerous:

Essentially, the legislation modifies the 1949 Jenkins Act (which governs the taxing and trafficking of cigarettes and smokeless tobacco) to categorize all components and elements used in ANY vaporizing device as a cigarette. The act forces shippers of vape products to comply with stringent new rules, including registering with the U.S. Attorney General and maintaining and reporting buyer’s addresses and quantities of products. Curiously, the act includes an exclusion for FDA-approved devices, a clear nod in favor of Big Tobacco. It would appear the act has little to do with preventing vape access to children, and everything to do with hamstringing competition, shutting down legal commerce and restricting access to needed medicine for cannabis and CBD vape patients nationwide.

If it remains in place, the act will prove catastrophic for the cannabis vape business specifically and the cannabis industry as a whole -- not to mention what it symbolizes to the efforts of states and voters to govern their own jurisdictions. This is an attack on many fronts, beginning with the imminent shut down of the direct-to-consumer supply chain when the United States Postal Service ceases delivery of vape products to consumers beginning April 26. As a result of this USPS decision and the increased regulations mandated by the act, Federal Express and UPS announced they will follow suit, ceasing all deliveries of vape products on March 1 and April 5, respectively. This begins the slow roll of destruction that will trickle down to consumers, retailers and of course, vape manufacturers.

Consumers will notice immediately that their favorite vape products will no longer be available for home delivery. If consumers are lucky, they’ll still be able to purchase their preferred products at a local retailer. But even that will become less likely as small batch shipments of vape products to wholesalers and dispensaries are impacted. The very broad language used in the bill may put a stranglehold on these commercial business-to-business shipments, and many products will disappear from store shelves. Medical patients, including U.S. veterans that rely on vaping as their preferred ingestion method, will need to scramble to find a suitable replacement or go without a legal alternative for their medicine. Ultimately, many consumers and patients will be drawn back to the black market, which we now know was the origin for many vaping lung disease cases in 2019. Sadly, this may just be the most dangerous legacy of this ill-considered act. 

For cannabis retailers, the act will amount to scarce product availability, lost customers and ultimately lost revenue. Dispensaries with a strong commitment to medical patients and veterans will be forced to turn their valued customers away. Perhaps most alarming, the legislation will create extreme economic hardship for vape manufacturers, potentially driving hundreds of businesses to close nationwide following the loss of billions of dollars in cannabis vape sales. Product innovation will come to a standstill as manufacturers struggle to survive against the costly regulations and burdensome shipping restrictions. The largest vape product manufacturers may be able to absorb these exorbitant costs, but small- to medium-sized companies will fall victim. 

Selfishly, this is where my personal concerns intersect with the industry impacts of this deceptive legislation. As President and CEO of O2VAPE, I hold our responsibility for safety to consumers and patients in the highest regard. We have worked tirelessly to create and distribute products that people can not only rely upon, but also feel completely comfortable and confident using. But the fact is that this act has the potential to impact up to 70 percent of my company’s business, severely limiting how we can fulfill our mission. As a result, O2VAPE’s efforts to innovate new products and plan for the future will become victims to our mere struggle for survival. I’m certain the most responsible manufacturers will soon experience huge losses in revenue. Businesses will undoubtedly be destroyed, and I can only work hard to ensure that one of them isn’t mine.

State leaders and visionaries across the nation have spent more than a decade carefully crafting legislation and building voter coalitions to dismantle cannabis prohibition and build an entirely new consumer and medical industry. Voters have made their wishes known at the ballot box--and in many states those wishes include having access to safe, effective and legal medicinal and recreational cannabis. If the federal government can so easily sidestep these efforts by legislating barriers between consumers and businesses, then no independent state legislation or decisions are safe, and citizens can no longer believe that their vote matters.

Our response to this travesty of federal government overreach will demonstrate how committed we are to the patients and consumers who voted with confidence to create the modern cannabis industry. And the time for us to respond is now. 

Dana E. Shoched is president and CEO of O2VAPE, a leading vaping product manufacturer for consumers and wholesalers.

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The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.
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