Quoted:
Do M18 Smokes contain more than 1/4 ounce of Incindiary material ? This is why fireworks never contain more than 1/4 ounce of powder.
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I'm not up on the ATF regs, but TM 43-0001-29 (Army Ammunition Data Sheets for Grenades, c8, Nov 86) says that an M-18 (any color) has a "smoke composition" filler of 11.5 ounces. Fuze is the M201A1 pyrotechnic delay-igniting, with an M39A1 primer and an ignition mixture of "iron oxide, titanium, zirconium." Red is 1330-G950.
I would think transporting these items would be a major headache even if they are legal to possess. TM says they're 1.4G, UN number 0303, and outer pack marking is "Ammunition, smoke."
Another thing to consider is what the EPA would think about putting smoke in the air w/o some kind of permit. Yes, it sounds silly, but in some states they can get serious about that. And after 9-11, people are likely to report things they would have ignored in the past. I don't necessarily agree with the EPA, but the original question was about legal issues and this could be one of them.