TT-20 – Primary source law and supply chain requirements
What businesses must know about authorized suppliers and prohibited cigarette shipments
Maryland law restricts who can legally ship cigarettes into the state to prevent unauthorized and gray market products, and this guidance explains the “primary source” requirement and the consequences of non-compliance.
What you need to know
- Cigarettes must come from an authorized “primary source”
- Gray market cigarettes are prohibited
- Both shipper and recipient must be properly licensed
- Unauthorized shipments may result in felony penalties
Who This Applies To
This guidance applies to:
- Cigarette manufacturers
- Wholesalers and sub-wholesalers
- Importers and distributors
What Is the Primary Source Requirement
Maryland law requires that cigarettes shipped into the state must come from:
- The brand owner (manufacturer)
- The authorized U.S. importer
- A designated agent of the brand owner or importer
Gray Market Cigarettes
Gray market cigarettes are:
- Products intended for export outside the United States
- Reintroduced into the U.S. without manufacturer authorization
These products:
- May differ in composition or labeling
- Are not allowed for sale in Maryland
Licensing Requirement
Both parties in a transaction must:
- Hold appropriate licenses to ship, receive, or sell cigarettes
Businesses must also:
- Ensure all products meet federal and state labeling requirements
Direct-to-Consumer Sales
Businesses may NOT:
- Ship cigarettes directly to consumers in Maryland
This applies even if:
- The seller is the brand owner
Documentation Requirement
Businesses must:
- Verify that suppliers qualify as a primary source
- Maintain documentation proving authorization
You may be required to:
- Provide proof during inspections or audits
Enforcement and Penalties
Violations may result in:
- Felony charges
- Fines up to $50 per carton
- Imprisonment up to 2 years
- Confiscation of products and transport vehicles
What This Means for Businesses
Businesses should:
- Confirm all suppliers are authorized primary sources
- Avoid gray market products
- Maintain documentation for all inventory
- Ensure all shipments comply with licensing and labeling rules
Important Notes
- Primary source rules apply to all shipments into Maryland
- Direct-to-consumer cigarette sales are prohibited
- Enforcement includes criminal penalties
Need Help?
For questions about cigarette sourcing requirements:
410-260-7314