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Breaking News: The FDA Just Issued the Final Rule Regulating Handmade Cigars, and It’s as Bad as We Feared

5 May 2016

FDA-cigars-large

Today the Food and Drug Administration (FDA) announced the final rule regulating cigars. We will have more coverage in tomorrow’s Friday Sampler and in the coming weeks but, for now, here are some key points about the impact of the 499-page rule on handmade cigars.

The FDA Rejected Pleas for an Exemption for Premium Cigars

In its initial proposed rule, the FDA offered two options for regulating cigars: option one (which covers all cigars), and option two (which exempts handmade cigars over $10). In its final rule, the FDA rejected option two, meaning a $12 handmade premium cigar will be treated exactly the same under the rule as “little cigars” that are manufactured on the same machines that produce cigarettes.

Date for Grandfathered Products Remains Unchanged

While the so-called Family Smoking Prevention and Tobacco Control Act (FSPTC)—the bill giving the FDA the power to regulate cigars—didn’t pass until June 2009, the legislation sets February 15, 2007 as the cutoff date for tobacco products to be grandfathered in as exempt from needing FDA approval before being sold or marketed in the United States. There were hopes that the FDA would modify that date, but they did not. As a result, products introduced past that date will be subjected to the FDA approval process. Cigars currently on the market will be treated differently from those introduced after the regulation officially takes effect.

Regulations Take Effect August 8

While the text of the rule was released today, it will not be officially published to the Federal Register until May 10, at which point a 60-day clock will start until the regulation officially goes into effect. Cigars introduced after August 8 will have to get FDA pre-approval before being marketed or distributed. Non-grandfathered (post-February 15, 2007) cigars on the market before August 8 can be sold until August 8, 2018, after which they must apply for FDA approval to remain on the market. Notably, the 2016 IPCPR Trade Show is set to take place in Las Vegas at the end of July, meaning it will effectively be the last chance cigar makers have to introduce new cigars before the August 8 date for pre-approval is required.

FDA Approval Process Still Murky

The need for FDA approval of new cigars is the biggest reason why industry experts predict the rule will devastate the handmade cigar industry, including 30,000 Americans who work in the industry and over 300,000 employees abroad. While subjecting all cigars to a pre-approval process where they must prove the new product is “substantially equivalent” to a grandfathered or approved product, the exact standards the FDA will use to make this determination, or exactly what scientific data would need to be included with the application, is far from clear. The FDA also doesn’t seem to address if it has the capacity to deal with new applications in a timely manner.

Rule Enacts Sample Ban, Mandated Warning Labels

Starting on August 8, distribution of samples will be prohibited, meaning cigar shop events where attendees get to try a new product free of charge will be prohibited. Full implementation of warning labels on cigars has also been mandated, with warnings “to appear on at least 30 percent of the two principal display panels of the package, and at least 20 percent of the area of advertisements.”

FDA Intends to Ban Flavored Cigars Next

In the finalized rule, the FDA states the following regarding demands by anti-tobacco lobbyists that it include a ban on flavored tobacco products: “To address concerns with the growing flavored cigar market and its impact on youth and young adult initiation with tobacco products, FDA is announcing here that it intends to issue in the future a proposed product standard that would prohibit characterizing flavors in all cigars, including cigarillos and little cigars.” To date the exact definition of a flavored cigar is unknown, and depending on the definition such a ban could include many premium handmade cigars not commonly identified as flavored.

Legal Challenges Are Inevitable

Barring an Act of Congress, only a federal court case can stop enforcement of this rule. Legal actions to executive orders generally come in the form of either a facial challenge to the rule, or an as applied challenge. A facial challenge could ask for an injunction to stop implementation of part of the rule or the entire rule, although the standard for getting one is very high. An “as applied” legal challenge would allege that the FDA violated either a federal law or the Constitution in how it applied the regulations to a specific party. With such a major expected impact, multiple federal lawsuits are likely.

The entire text of the 499-page rule can be found here.

Patrick S

photo credits: Stogie Guys

Drew Estate

21 Responses to “Breaking News: The FDA Just Issued the Final Rule Regulating Handmade Cigars, and It’s as Bad as We Feared”

  1. george e Thursday, May 5, 2016 at 3:44 pm #

    I believe another aspect is that Cuban cigars would likely never be legal in the U.S. even after the embargo ends because they were “not commercially marketed in the United States on February 15, 2007,” and would have to go through the approval process. It’s hard to imagine Cuba paying for that.

    • Cigar Seeker Thursday, May 5, 2016 at 4:28 pm #

      Do cigars have to have been marketed on that date, or introduced to the market prior to that date? If the latter, Cubans would make the cut.

      • george e Thursday, May 5, 2016 at 10:24 pm #

        The wording is what I quoted. Further, there’s this: “If your tobacco product had been commercially marketed in the United States before February 15, 2007, but was not commercially marketed on that date, it is not a grandfathered product and may not be commercially marketed unless you obtain a marketing authorization under section 910 of the FD&C Act.” I think that pretty much rules out any chance that Cuban brands sold in the U.S. before the embargo would be grandfathered in.

    • Mike Friday, May 6, 2016 at 7:14 am #

      I think lawsuits would be quite successful at at least delaying many parts of this, and that passage you cite is open to interpretation.

      I’d argue Cuba has a lot of reasons to fight this if the embargo ends, and accessing the world’s largest cigar market would make the process worthwhile for some Cuban brands.

      I was wrong that the Obama administration would sit on this like they have with menthol, and that is disappointing. But businesses adapt; this is not the end of cigars in the US.

  2. danTechnoremix Thursday, May 5, 2016 at 6:49 pm #

    And yet the government manufactures Oxy..

  3. William Thursday, May 5, 2016 at 11:03 pm #

    Vote in Trump F**k the FDA

    • Jack Gold Saturday, May 7, 2016 at 9:33 am #

      Sorry, but, IMO, that’s the equivalent of amputating the whole arm because of a hang nail.

      The president isn’t the problem. His power is limited by design. The real issue is the jagoffs in Computer, Congress. They have no memory of (if they ever even had to) having get up and go to work and actually earn a living.

      Every one of them was a multi-millionaire before they were elected to the position they now hold. So what makes you think they have ever known, or cared, anything about what we average Joes go through just to enjoy a decent, not even an extravagant, cigar?

      Everyone gets so caught up in hating the president because he’s all by his lonesome at the top. If I have one dream left marginally intact, it’s that America will one day rise up as a people and replace every sitting member of both houses. And leave no incumbent in place.

      Cigars are just the beginning. Just like cigarettes, the states and their own megalomaniacal representatives will tax cigars to the point that they’re the only ones who can afford them. But they get theirs for free from the ones who regularly buy their votes.

      FYI, I don’t know if there is a candidate who is remotely qualified to be president. So far, I haven’t heard Trump say one specific thing he actually has a plan for. It’s just “rah, rah!” BS that is scripted to sound like he knows what we’re going through. He has no clue what he would face. Yeah, Congress likes him now when he’s not really a threat but that won’t last long.

      Cruz? According to the Constitution, he’s not even an eligible candidate. I now understand why Republicans made such a huge deal over Obama’s alleged citizenship. Because of Cruz’s violation that fundamental rule for who can become president, nothing he stands for is relevant.

      Hillary? I’m not against a woman in the Oval Office but Hillary’s track record and her tendency towards emotionalism erodes any faith I had in her. Sanders, who actually made some sense in comparison to the other three, is a) too old and b) is already in a downward spiral.

      Basically, cigars are the least of our problems. I guess I’ll just enjoy them for as long as I can afford them.

  4. Thomas Ward Friday, May 6, 2016 at 3:26 am #

    Pure political BS, I think Groucho said it best: Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies. ~ Groucho Marx

    • Vann Wednesday, May 18, 2016 at 6:36 am #

      Amen

  5. Al Lebo Friday, May 6, 2016 at 5:40 am #

    This is the reason why you never elect Demothieves. They stay up nights creating false reasons for new laws and regulations so they can convince their weak busy body loser supporters to keep paying exorbitant taxes from which they can steal. Hopefully President Trump can clean up the swamp.

  6. Nick M Saturday, May 7, 2016 at 2:48 pm #

    Rocky Patel = f*cked
    Fuente & Padron = safe

    The legislation is disappointing, but I really only see it affecting boutique brands, which are inconsistent anyway. IMO, the US has far more serious problems than cigar regulations. If you’really a single-issue voter, remember that this legislation was passed under a Republican majority in the house and senate. It’s unfortunate, but it’seems not going to be the end of premium cigars.

    • BK Tuesday, May 10, 2016 at 9:59 am #

      Not true. This is regulation by Obama’s FDA. It has nothing to do with the Republicans in congress. Power grab by big brother on the nanny state left. Also it will effect all companies who have come out with new blends. You may want to pay attention.

      • Nick M Tuesday, May 10, 2016 at 2:46 pm #

        Well then why has every cigar website on the internet been urging me to write my congressman for the past year and a half? They certainly have the power to stop the legislation.

  7. Ethan Tuesday, May 10, 2016 at 1:47 pm #

    Marriage is no longer between a man and a woman. Marijuana is legal in over 20 states. Clinton can have her own server. Iran can have nukes. However the THE US GOVERNMENT is AGAINST US ENJOYING A CIGAR! This is Bullshit.

  8. Michael Wednesday, June 8, 2016 at 4:59 am #

    Welcome to the new Communism. Where every aspect of your life is controlled and monitored by the government. Where political correctness is the new facism. Where freedom of speech is punished. We put an embargo on Cuba for restricting and punishing freedom of expression while our government becomes them. George Orwell’s 1984 has come true.

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