Will Supply Chain Issues Continue to Disrupt the Vaping Industry in 2022?

When the COVID-19 pandemic began in 2020, the timing was absolutely awful for businesses that sourced their products from China because the virus’s first wave of rapid spreading occurred during the celebration of the Chinese New Year. Many of the people who worked at the factories in Shenzhen – factories that produce 90 percent of the world’s consumer electronics – were at home celebrating the holiday with their families and were unable to return because of lockdowns. For a while, many products simply stopped flowing out of China.

As we near the end of 2021, it’s still seemingly impossible to read any website relating to business or consumer news without seeing something about how the world’s supply chain issues still aren’t over yet. Some people are saying that shipping delays could become so bad that people who don’t start their shopping for the holiday season soon could end up not getting their gifts on time.

The vaping industry is somewhat unique in that virtually all of the industry’s devices and accessories come from Chinese factories. It’s also unique because regulatory changes in the United States made it very difficult for some American consumers to buy vape gear and vape juice online in 2021. So, will supply chain issues continue to disrupt the vaping industry in 2022? The answer to that question is “most likely.” In this article, we’ll explain why. First, though, let’s look at some of the reasons why the industry had so many supply chain issues in 2020 and 2021.

The COVID-19 Pandemic Caused the Vaping Industry’s Initial Supply Chain Issues in 2020

As alluded to above, the fact that the initial COVID-19 outbreak in China resulted in the shutdown of many factories in Shenzhen caused a rash of supply chain issues for the vaping industry in 2020. Without a constant supply of replacement pods or atomizer coils, most vaping devices simply don’t work. Very soon after the initial COVID outbreak, many owners of popular vape tanks and pod-based vaping devices reported that they couldn’t seem to find those crucial replacement parts anywhere.

When the pandemic reached American shores, cities began to shut down. In many cases, vape shops were not considered essential businesses and were forced to close. Because of that, large stocks of e-liquid were locked up and unavailable for customers to purchase. Even without the shuttering of local vape shops, though, millions of consumers were already doing everything possible to limit their in-person purchases and buy almost everything online. Companies couldn’t produce enough vape juice to meet the demand, and many e-liquids were difficult to find consistently throughout the first half of 2020.

Regulatory Changes Created Shipping and Compliance Issues for Vape Shops in 2021

Although the vaping supply chain had begun to normalize by the end of 2020, the federal government dropped a major bomb on the industry when it approved a budget bill for 2021 containing two items that would severely impact all American vaping businesses and consumers.

• As of 2021, all companies shipping vaping products to consumers would have to comply with the requirements of the Prevent All Cigarette Trafficking (PACT) Act. To comply with the Act, all shippers of vaping products would have to register themselves with all relevant tobacco tax collection authorities throughout the country and provide sales data to those authorities.
• The budget bill also directed the USPS to stop delivering vaping products to consumers, and the vape mail ban finally took effect on October 21. The other three major package carriers – FedEx, UPS and DHL – have also stopped delivering vaping products. Following the vape mail ban, vape shops can only use private couriers when shipping products to consumers. At the time of writing, there are significant areas of the country in which private courier services are not available.

Between the vape mail ban and the PACT Act, the American vaping industry has had supply chain issues in 2021 that are arguably even worse than those experienced in 2020. At present, many consumers in the United States are essentially unable to buy vaping products online and have begun to patronize brick-and-mortar vape shops where those shops are available. In 2022, though, even the local vape shops may start to experience serious supply chain constraints. Here’s why.

Experts Expect Supply Chain Issues for the Vaping Industry to Continue in 2022

If you’re finding it difficult to buy vaping products right now, the unfortunate fact is that supply chain issues are extremely likely to continue plaguing the vaping industry in 2022.

The first reason why some vaping products may become difficult to find in 2022 is because a significant percentage of America’s vape juice makers reformulated their products in 2021 to use synthetic nicotine rather than nicotine derived from tobacco. That’s going to continue in 2022 – but the problem is that the laboratories manufacturing synthetic nicotine may not have enough to go around. If there isn’t enough synthetic nicotine available to satisfy the demand of the e-liquid makers, those shortages are going to trickle down to the consumers because there won’t be enough finished e-liquid available for vapers to buy.

The other major supply chain issue that could face the vaping industry in 2022 is the fact that businesses may have difficulty getting products to sell. Shipping is at the root of this problem, and the problem is virtually the same for businesses as it is for consumers. When FedEx, UPS and DHL stopped carrying vaping products, they applied that rule for all shipments – including business-to-business shipments. Distributors, therefore, can’t use those carriers to ship vaping products to vape shops. The USPS, on the other hand, has a business-to-business exception in the vape mail ban – but there’s an issue with that.

While distributors can still use the USPS to ship vaping products to vape shops, parties on both sides will need to register as businesses with the USPS and request exemptions from the vape mail ban. The process isn’t electronic, and the USPS expects approvals to be very slow due to the sudden flood of requests. In the meantime, distributors can ship products to vape shops using the same private courier services that are now delivering vape gear to consumers – but that’s unlikely to be a perfect solution for all vape shops. Until the order fulfillment process gets ironed out, vape shops will face increased difficulty in finding products to sell.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes