diff --git a/charmtools/build/tactics.py b/charmtools/build/tactics.py
index 68c35e0..42fb2a1 100644
--- a/charmtools/build/tactics.py
+++ b/charmtools/build/tactics.py
@@ -1230,6 +1230,7 @@ def __call__(self):
             utils.Process(
                 ('virtualenv', '--python', 'python3', self._venv)
             ).exit_on_error()()
+        utils.pin_setuptools_for_pep440(self._venv, env=utils.host_env())
         if self.per_layer:
             self._process_per_layer(wheelhouse)
         else:
diff --git a/charmtools/utils.py b/charmtools/utils.py
index 3c98da3..77219e4 100644
--- a/charmtools/utils.py
+++ b/charmtools/utils.py
@@ -633,3 +633,36 @@ def validate_display_name(entity, linter):
         linter.err('display-name: not in valid format. '
                    'Only letters, numbers, dashes, and hyphens are permitted.')
         return
+
+
+def host_env():
+    """Get environment appropriate for executing commands outside snap context.
+    :returns: Dictionary with environment variables
+    :rtype: Dict[str,str]
+    """
+    env = os.environ.copy()
+    for key in ('PREFIX', 'PYTHONHOME', 'PYTHONPATH',
+                'GIT_TEMPLATE_DIR', 'GIT_EXEC_PATH'):
+        if key in env:
+            del(env[key])
+    env['PATH'] = ':'.join([
+        element
+        for element in env['PATH'].split(':')
+        if not element.startswith('/snap/charm/')])
+    return env
+
+
+def pin_setuptools_for_pep440(venv_dir, env=None):
+    """Pin setuptools so that pep440 non-compliant packages can be installed.
+    Also pins pip as it's a combination that definitely works.
+    :param venv_dir: Full path to virtualenv in which packages will be upgraded
+    :type venv_dir: str
+    :param env: Environment to use when executing command
+    :type env: Optional[Dict[str,str]]
+    :returns: This function is called for its side effect
+    """
+    log.debug('Pinning setuptools < 67 for pep440 non compliant packages "{}"'
+              .format(venv_dir))
+    Process((os.path.join(venv_dir, 'bin/pip'),
+             'install', '-U', 'pip<23.1', 'setuptools<67'),
+            env=env).exit_on_error()()
diff --git a/tests/test_build.py b/tests/test_build.py
index e3cbebd..5de0903 100644
--- a/tests/test_build.py
+++ b/tests/test_build.py
@@ -431,6 +431,7 @@ def test_version_tactic_with_existing_version_file(self, mcall, ph, pi,
 
         self.assertEqual((bu.target_dir / 'version').text(), 'sha2')
 
+    @mock.patch("charmtools.utils.pin_setuptools_for_pep440")
     @mock.patch("charmtools.utils.sign")
     @mock.patch("charmtools.build.builder.Builder.plan_version")
     @mock.patch("charmtools.build.builder.Builder.plan_interfaces")
@@ -438,7 +439,8 @@ def test_version_tactic_with_existing_version_file(self, mcall, ph, pi,
     @mock.patch("path.Path.rmtree_p")
     @mock.patch("tempfile.mkdtemp")
     @mock.patch("charmtools.utils.Process")
-    def test_wheelhouse(self, Process, mkdtemp, rmtree_p, ph, pi, pv, sign):
+    def test_wheelhouse(self, Process, mkdtemp, rmtree_p, ph, pi, pv, sign,
+                        pin_setuptools_for_pep440):
         build.tactics.WheelhouseTactic.per_layer = False
         mkdtemp.return_value = '/tmp'
         bu = build.Builder()
@@ -486,7 +488,7 @@ def _store_wheelhouses(args):
                         '',
                         '# --wheelhouse-overrides',
                         'git+https://github.com/me/qux#egg=qux',
-                        'setuptools_scm>=3.0<=3.4.1',
+                        'setuptools_scm>=3.0,<=3.4.1',
                         '',
                     ])
 
diff --git a/tests/test_utils.py b/tests/test_utils.py
index 4b9fc56..3e63478 100644
--- a/tests/test_utils.py
+++ b/tests/test_utils.py
@@ -1,5 +1,6 @@
 from __future__ import print_function
 
+import unittest
 from unittest import TestCase
 from charmtools import utils
 from six import StringIO
@@ -43,3 +44,27 @@ def react(db):
         self.assertIn("Beta", output)
         self.assertIn("@when('db.ready'", output)
         self.assertIn("bar", output)
+
+    @unittest.mock.patch("os.environ")
+    def test_host_env(self, mock_environ):
+        mock_environ.copy.return_value = {
+            'PREFIX': 'fake-prefix',
+            'PYTHONHOME': 'fake-pythonhome',
+            'PYTHONPATH': 'fake-pythonpath',
+            'GIT_TEMPLATE_DIR': 'fake-git-template-dir',
+            'GIT_EXEC_PATH': 'fake-git-exec-path',
+            'SOME_OTHER_KEY': 'fake-some-other-key',
+            'PATH': '/snap/charm/current/bin:/usr/bin:'
+                    '/snap/charm/current/usr/bin:/bin',
+        }
+        self.assertDictEqual(
+            {'SOME_OTHER_KEY': 'fake-some-other-key', 'PATH': '/usr/bin:/bin'},
+            utils.host_env())
+
+    @unittest.mock.patch.object(utils, "Process")
+    def test_pin_setuptools_for_pep440(self, mock_Process):
+        utils.pin_setuptools_for_pep440('/some/dir', env={'some': 'envvar'})
+        mock_Process.assert_called_once_with(
+            ('/some/dir/bin/pip', 'install', '-U', 'pip<23.1',
+             'setuptools<67'),
+            env={'some': 'envvar'})
diff --git a/tests/wh-over.txt b/tests/wh-over.txt
index 73f53e5..7a65377 100644
--- a/tests/wh-over.txt
+++ b/tests/wh-over.txt
@@ -1,2 +1,2 @@
 git+https://github.com/me/qux#egg=qux
-setuptools_scm>=3.0<=3.4.1
+setuptools_scm>=3.0,<=3.4.1