The Stogie Guys

The Food & Drug Administration (FDA) is now seeking comments on its deeming document to regulate cigars under the Tobacco Control Act. Comments are due by July 9 and can be submitted here. (We’ll be putting together some suggested issues to raise in your comments as we get closer to the deadline.)

But as I thought about putting together my comments, I realized there are many significant issues that are almost impossible on which to comment. There are so many questions raised in the deeming document about what the proposal would even look like if implemented. It’s just one of the reasons the FDA should grant the Cigar Association of America extension.

To that end, here are just a few questions the FDA should answer so the public can submit informed comments about the proposal, not just ones based on an overly vague proposal.

What counts as a new cigar?

Under the FDA proposal, new cigars (or, under Option 2, new cigars that don’t meet the definition of a “premium cigar”) must receive the approval of the FDA before they can be sold. Is a new line of five sizes of the same blend one new product or five? Is an annual release of a cigar a new product, or just the same as a previous one? What if the factory where a cigar is made changes, or the sources of tobacco change? Does that make a cigar new?

Does the FDA even have the capacity to regulate cigars?

So far the FDA has approved or denied only 34 out of roughly 4,000 pending applications for new products. Given its current budget constraints, does the FDA have the capacity to rule on the hundreds or thousands (depending on the definition of a new cigar) of new cigars that are released in a given year?

What would be necessary to list the ingredients of a cigar?

One of the rules cigars would have to meet is a “required submission of ingredient listing” to the FDA. Is 100% tobacco leaf adequate? Would manufacturers be required to list the types of tobacco and where they were grown?

What constitutes the “distribution of free samples”?

The proposal includes a “prohibition on the distribution of free samples,” but would that include only samples to consumers? What about free samples at a trade show, or to professional reviewers? Would a buy-one-get-one-free promotion violate this prohibition? Would this only apply to manufacturers, or also to professional tobacconists who might want to give a favorite customer a new cigar to try for free?

What qualifies a cigar as containing “primarily long-filler tobacco”?

The FDA proposal states that under its option for a premium cigar exemption a cigar could qualify if it “contains primarily long-filler tobacco.” Would a Liga Privada Papas Fritas count? It uses clippings from the $10+ Liga Privada No. 9 cigar, but also some long-filler. Would 51% be adequate and, if so, how is that measured?

What do you mean by “characterizing flavor”?

The FDA proposal states that under its option for a premium cigar exemption a cigar would only qualify if it “does not have a characterizing flavor other than tobacco.” Would using tobacco aged in rum barrels (a common practice) be a violation? Would using betunes with wine or curing with aromatic woods like maple, hickory, or oak be a “characterizing flavor”? What about aging a finished cigar in cedar? (The FDA has been asked before about cedar aging and has refused to answer.)

Where did the $10 price floor come from in your option for a premium cigar exemption and how is it applied?

We’ve already covered the problems with the $10 number before. Did this number come from any government or scientific sources, or is it completely random? Also, how is “a retail price (after any discounts or coupons) of no less than $10 per cigar” determined? If the suggested retail price is $10 but it is sold by one retailer for less, is that a violation? And, if so, who violated the rule: the manufacturer or the retailer?

–Patrick S

photo credits: Stogie Guys

An enjoyment of farming, tax laws, and a devotion to the history of cigars are the unique combination that led Jeff Borysiewicz to launch his Florida Sun Grown tobacco endeavor. Up until last year, no long-filler cigar tobacco had been grown in Florida since 1977.

Borysiewicz is owner of the Orlando-area Corona Cigar stores and a partner in the Sindicato cigar company. He also is one of the most dedicated advocates for cigar freedom through his roles as co-founder and board chairman of Cigar Rights of America and the founder of the Puro PAC, a political action committee that supports cigar rights and pro-cigar candidates. Now he can add tobacco farmer to the list.

“I’ve always had a passion for farming,” he told me when we discussed his new project, noting that he was even a state tractor driving champion in his youth. More recently, Borysiewicz purchased land in Clermont (45 miles from Orlando).

Soon after, his tax attorney informed him that unless he grew something on the land, he’d have to pay residential tax rates on the land. So the idea for combining his enjoyment of farming and tobacco came into focus. In 2013, a test crop of 10,000 plants was cultivated, half Corojo seed and half Criollo.

The test proved successful enough that this year 45,000 seedlings were being planted, all of the Corojo variety, and new curing barns were built. The goal is eventually to produce sun-grown leaf that can be used as wrapper that will take on its own unique flavor profile.

While it’s a unique project, growing cigar tobacco in Florida isn’t unprecedented. A considerable amount of cigar tobacco used to be grown in Florida, second only to Connecticut within the U.S., especially in the panhandle region around Quincy.

After the Cuban embargo, such legendary tobacco men as Angel Oliva grew there, at the same time as they planted their first crops in Central America. Eventually, the cost of labor in Florida, and a move towards homogenized wrappers for the Tampa-based factories that had been their main customers, caused production of Florida tobacco to cease in the late 1970s.

I got to examine the tobacco while visiting Drew Estate in Nicaragua last month. While that tobacco isn’t quite ready to be made into cigars, Jonathan Drew and Nick Mellilo of Drew Estate say the results look promising. I can personally attest to its strong, unique aroma.

That first crop yielded roughly 45,000 filer leaves, which, as of last month, was still fermenting in Drew Estate’s DE2 pre-industry facility. The leaf is on the small size, but it could be used as a filler component in a blend (either for 45,000 cigars using one leaf each, or 90,000 cigars with a half leaf in each).

That crop was allowed to grow mostly wild (without priming), which produced only filler. But the hope is that wrapper-quality leaf will soon follow. Borysiewiz has been friends with Jonathan Drew since they both were getting into the cigar industry in the 1990s, so it was a natural pairing, especially now that Drew Estate has the capacity with its new facility.

What project exactly the “Florida Sun Grown” (a name Jeff Borysiewicz has trademarked) will be part of is yet to be seen. But even with the larger crop this year it will always be a limited, unique product.

In the meantime, the project gives Borysiewicz another talking point when telling politicians about the need to protect cigars from federal bureaucrats. Florida Sun Grown tobacco is another example of American jobs being created by the premium cigar industry. If the FDA makes projects like this not financially viable, however, those jobs will no longer exist.

–Patrick S

photo credit: Stogie Guys

Each Saturday and Sunday we’ll post a Quick Smoke: not quite a full review, just our brief verdict on a single cigar of “buy,” “hold,” or “sell.”

Felix Assouline’s Limited Reserve Something Special comes with a price tag of $4.50 that ensures it isn’t limited to special occasions. The box-pressed line features an oily, reddish-brown Habano Criollo wrapper, Indonesian binder, and a combination of Nicaraguan and Honduran filler tobacco. It’s a medium-bodied smoke with powdered cocoa, earth, and slight tea flavors. For the price, the flavors are enjoyable and balanced, although the sample I smoked had an unfortunately tight draw.

Verdict = Hold.

–Patrick S

photo credit: Stogie Guys

When the Food & Drug Administration (FDA) announced a willingness to exempt premium cigars from forthcoming regulations, it seemed the multi-year campaign to educate regulators about the differences between handmade cigars and most other tobacco products had paid off. Then it became evident that attached to the potential exemption was a devastating definition of premium cigars, including a $10 minimum retail price.

As explained previously, an exemption that includes a $10 minimum price would exclude 85% or more of handmade cigars. The 85% figure comes from numbers put together by Gary Griffith of Emilio Cigars using a sample of 26 stores, but I strongly suspect the real percentage is even higher. For example, $1-2 bundle cigars and factory seconds, which are made with the same techniques as higher cost cigars, are sold in higher numbers through the internet and catalogs. These aren’t fully represented in the 85% figure.

Without the exemption, new cigars (and those introduced since February 15, 2007) would need approval from an FDA that has shown no willingness or ability to do so. The agency has only approved 17 of 4,000 applications in the previous few years (2 were cigarettes, the other 15 applications were for things like wrapping papers). Effectively, there would be no new cigars introduced under an FDA-defined price floor for premium cigars.

The simplest way to look at the $10 figure is as follows: Whoever proposed it is completely ignorant of the handmade cigar market. Not only is there no scientific basis for such a cutoff (nobody can logically claim that a cigar that sells for $10 has public health implications different from one that sells for $9.99 or even $3), but it doesn’t reflect the reality of the handmade cigar market either.

The idea that the very agency authorized to regulate cigars proposed such an unsupported, arbitrary, and even ignorant rule is a scary thought. But as scary as it is, the alternative might be even worse. After all, you can at least educate the ignorant.

While I fully expect that FDA regulators don’t “get it” when it comes to why we enjoy cigars (the experience, the ritual, the camaraderie… the flavor being important and not the nicotine), I doubt they are so ignorant as to genuinely think that $10 is a reasonable line between “premium” and non-premium cigars given the current state of the cigar market.

This is politics—that’s why you hire lobbyists, not scientists, when you’re facing a rule-making process—and the FDA’s proposal is a classic political position: the ultimate threat paired with an offer to “negotiate” for something less devastating.

I’ve heard throughout the FDA process representatives of the cigar industry have been pressured to adopt a definition that included a minimum price. They’ve correctly resisted, because there is no scientific or public health reason to create an arbitrary price. Supposedly the FDA is still interested in truth and health.

Fans of the Game of Thrones HBO series will instantly recognize the image above. (If you haven’t read the first book or seen the show, I’m about to spoil the ending of the first season.) It’s the moment just before hero Eddard Stark is beheaded, after confessing to a crime he didn’t commit in order to protect his daughters and have his life spared.

If the FDA’s proposal is as calculated as I’m afraid it might be, then the handmade cigar industry shares many similarities to Stark’s dilemma. In its deeming document, the FDA pointedly left open “Option 1,” which would regulate all cigars, effectively killing the development of all new cigars.

“Option 2” is an exemption for some “premium” cigars, but the FDA is signaling that that it might be merciful, especially if the industry agrees to embrace an arbitrary, artificial, and unscientific price floor. In other words: If your false confession doesn’t sufficiently please us, we’ll just cut off your head. It didn’t work out well for Stark.

The cigar blog Halfwheel made the point yesterday that the $10 rule seems unlikely to survive, and it’s certainly true that a definition that uses “retail price (after any discounts or coupons)” is impractical. But that’s not necessarily a reason to rejoice.

In fact, it’s likely part of the set-up. A common negotiating tactic is a wildly low-ball opening offer, so the person you’re negotiating with feels they’ve won something when they agree to the real price you had in mind all along.

That may be what’s really going on here. If I told you a week ago that the final exemption would only apply to cigars with a wholesale price above $3 (roughly $6 at retail), you might have responded: That’s crazy! There are tons of handmade cigars that cost less than that and no public health reason to treat them differently than a cigar that costs more. Now, with the sword hovering over all cigars, some might think $3 a reasonable compromise to embrace.

The fact is, without an artificial price in the rule, there’s still a natural limit to how inexpensive a handmade cigar can be and still meet the rest of the requirements in “Option 2” of the proposed rule (some of which have their own problems that can be addressed in a future article). A completely handmade cigar, made primarily with long-filler tobacco, will have to cost a certain amount or it won’t be economically viable, and those looking just for nicotine will still find that pre-2007 cigarettes or other non-handmade cigars do a more efficient, cheaper job of delivering that. Further, even if unforeseeable developments prove this to be wrong, then the FDA can always do more rule-making to deal with any remaining issues.

Maybe I’m just jaded and the $10 requirement was born out of ignorance, and a thorough effort to educate the FDA will make the final rule reality-based. We should be so lucky, but I’m not sure I’d bet on it.

More likely I’m afraid we’re being set up to accept, perhaps even advocate for, drawing a line that doesn’t exist. And then feeling like we’ve won something when we get an arbitrary line that isn’t as bad as it could have been.

The FDA’s regulation of tobacco is supposed to be a fact-based process. By acknowledging the fact that premium cigars are different, the agency has implied that a reality-based line should be drawn, and I expect the handmade cigar industry will respond with comments showing why an arbitrary price definition is not based in science.

If the FDA ignores those comments and demonstrates that it is just playing politics, the result will be terrible. Not only would it destroy a thriving industry that caters exclusively to adults and provides thousands of American jobs, but it would betray the mandate that Congress gave the FDA to create reasonable regulations based in science and logic.

–Patrick S

photo credits: Stogie Guys / Game of Thrones

On Thursday, the Food & Drug Administration (FDA) took the long-expected action of invoking its authority to regulate cigars and other types of tobacco. We’ll be exploring why the action would be disastrous for handmade cigars in he coming days and weeks, but first it’s important to get an understanding of what exactly has been proposed.

Legislative Background

In 2009, Congress passed, and President Obama signed, the Tobacco Control Act, which directed the FDA to regulate cigarettes, as well as cigarette tobacco, roll-your-own tobacco, and smokeless tobacco. Under current regulations, all new cigarettes require FDA approval before they can be sold, and flavored cigarettes (with the exception of menthol) are banned for sale in the U.S.

The bill also authorized the FDA to regulate other types of tobacco (including cigars), but leaves it up to the agency through its rule-making mechanisms to decide if it will regulate tobacco other than cigarettes and, if so, what form that regulation will take. In order to assert its authority to regulate cigars, the FDA must go through a federal rule-making process.

Deeming Document

Last Thursday, the FDA took a big step towards regulating Other Tobacco Products (OTP) including cigars, by proposing to assert the FDA’s authority to regulate OTP by deeming them under the Tobacco Control Act. According to the document, “once a tobacco product is deemed, FDA may put in place ‘restrictions on the sale and distribution of a tobacco product,’ including age-related access restrictions and advertising and promotion restrictions, if FDA determines the restrictions are appropriate for the protection of the public health.”

Specifically, this means the following six regulations (that currently apply to cigarettes) would also apply to the additional products subject to the FDA’s deeming, including cigars:

(1) Enforcement action against products determined to be adulterated and misbranded; (2) required submission of ingredient listing and reporting of harmful and potentially harmful constituents (HPHCs) for all tobacco products; (3) required registration and product listing for all tobacco products; (4) prohibition against the use of modified risk descriptors (e.g., “light,” “low,” and “mild” descriptors) and claims unless FDA issues an order permitting their use; (5) prohibition on the distribution of free samples (same as for cigarettes); and (6) pre-market review requirements.

Some of these would cause significant disruption in the way new cigars are brought to market with costs of compliance ultimately passed on to consumers. While each of the six actions would cause some upheaval, experts seem to agree the requirement for FDA approval of new products would completely change the way the handmade cigar world works.

The FDA Approval Process

When finalized, the law would require every new tobacco product, including cigars, introduced after February 15, 2007, to be approved by the FDA. Products currently on the market but introduced after that date could be sold while the FDA rules on approval.

The FDA approval process has two methods to approve new products (which includes changes to existing products). Completely new products would require extreme amounts of scientific data and research, which would effectively stop new products from coming to market. The other route to approval is by proving that a new product is substantially equivalent to a product either introduced prior to February 15, 2007, or approved by the FDA since.

“Substantial equivalence” sounds like a process that should be relatively easy for approving new cigars—after all new cigars are generally just new blends of same types of tobacco that are already used in existing cigars—but the FDA approval process for cigarettes has demonstrated that it is anything but easy or quick. In fact, it’s effectively impossible. To date, the agency has only ruled on 34 products (approving 17 and rejecting 17) of the roughly 4,000 pending applications.

With hundreds of new cigars coming out every year (many thousands if each size is considered a new product) there is little reason to think the FDA approval process would do anything but effectively halt the introduction of new cigars.  The 150 or so FDA employees tasked with approvals have only managed to respond to fewer than 1 in 100 applications since 2009, and there is no extra budget for dealing with the increased applications that would come from this rule.

Option for Limited ‘Premium Cigar’ Exemption

In response to lobbying from premium cigar advocacy organizations and others (including cigar allies in Congress) the FDA proposed two options for regulating cigars. The first—opposed by cigar associations—would subject all cigars to the burdensome regulations described above, while “Option 2” would create an exemption for cigars defined by the FDA as “Premium Cigars.”

While Cigar Rights of America and others have long promoted legislation to exempt traditional and premium cigars from FDA regulation, the definition proposed by the FDA under “Option 2” is far more restrictive than the one contained in the “Traditional Cigar Manufacturing and Small Business Jobs Preservation Act.” The FDA deeming document proposed eight criteria (all of which must be met) in order for a cigar to meet the “Premium Cigar” exemption under this option:

(1) Is wrapped in whole tobacco leaf; (2) contains a 100 percent leaf tobacco binder; (3) contains primarily long-filler tobacco; (4) is made by combining manually the wrapper, filler, and binder; (5) has no filter, tip, or non-tobacco mouthpiece and is capped by hand; (6) has a retail price (after any discounts or coupons) of no less than $10 per cigar (adjusted, as necessary, every 2 years, effective July 1st, to account for any increases in the price of tobacco products since the last price adjustment); (7) does not have a characterizing flavor other than tobacco; and (8) weighs more than 6 pounds per 1,000 units.

Item 8 (“6 pounds per thousand”) is identical to a provision in the industry-supported legislation (and would effectively mean that a cigar four inches with a 38 ring gauge would definitely meet that criteria). Criteria 1-5 differ slightly from the legislation, which is designed to protect American jobs in the cigar industry (which allows for U.S.-made cigars to use homogenized binders as long as the wrapper is applied by hand).

Number 7, the prohibition on “characterizing flavor other than tobacco” raises significant issues. Not only would an infused cigar presumably not meet the exemption even if there is no scientific reason for excluding them, but the FDA has thus far refused to say what the definition of “characterizing flavor” is, and wouldn’t even say if aging tobacco in cedar qualifies. Given traditional techniques like barrel-aging tobacco, using betunes with wine, and newer developments like using maple or hickory in the curing process, this would surely stifle innovation in the industry.

By far the most threatening to the handmade cigar industry is item 6, which says for a cigar to meet the “Premium Cigar” exemption it must retail for $10 or more. The cigar industry has long taken the position that handmade traditional or premium cigars are about the production process, not about any arbitrary cost threshold, and there is no reason to believe that the health implications of a handmade $4 cigar are any different from a $10 one.

Estimates vary about how much of the handmade cigar market would fail to meet the $10 retail price, but a survey produced by Gary Griffith of Emilio Cigars of 26 stores in four states with varying demographics and tobacco tax rates found that only around 15% of cigars sold were above that price, while 60% of cigars sold in the $6-9.99 range and the remainder sold for less than $6.

What Now?

As of now, these are the rules the FDA has proposed; they are not yet finalized. Currently, the FDA is accepting public comments on the proposals for 75 days ending July 9, after which it will consider the public comments and likely then issue a final rule.

It will be critical that cigar smokers use the public comment period to make their voices heard, especially to advocate for an exemption for premium cigars that does not arbitrarily eliminate a significant percentage of cigars currently being sold based on a price. Otherwise, the innovation and creativity that makes the handmade cigar industry so great will come to a grinding halt.

In the coming days and weeks, we’ll have more to say about this critically important issue, including suggested points to make when you file a public comment. So please check back often and consider signing up for our free email newsletter for critical updates and reminders.

–Patrick S

photo credits: Stogie Guys /Gary Griffith

Each Saturday and Sunday we’ll post a Quick Smoke: not quite a full review, just our brief verdict on a single cigar of “buy,” “hold,” or “sell.”

The corona-sized Dirty Rat is one those cigars that I really enjoy yet don’t actually smoke too often. A large part of that is the very limited availability of this cigar, and the fact that when a store does get them in, they’re likely gone very quickly. The cigar bellows smoke as it imparts a complex blend of creamy earth, chocolate, and cinnamon and clove spice. It’s balanced, perfectly made, full-bodied, and complex, and certainly worth seeking out. It’s probably second only to the Velvet Rat as my favorite in Drew Etate’s Único Serie.

Verdict = Buy.

–Patrick S

photo credit: Stogie Guys