California Assembly Unanimously Approves Flavored Tobacco Ban with Premium Cigar Exemption

A flavored tobacco ban has been unanimously approved by the California Assembly, advancing the legislation and setting up negotiations between the Assembly and Senate to resolve differences in the bill before it heads to the desk of Gov. Gavin Newsom, who has indicated his support for the ban.

On Monday, the Assembly voted 50-0 in favor of SB 793, which will prohibit the sale of nearly all flavored tobacco products, flavored e-cigarettes and flavored vaping products.

During the legislative process, the bill was amended to include an exemption for some premium cigars. The Assembly’s version of the bill defines premium cigars as being “any cigar that is handmade, is not mass-produced by use of mechanization, has a wrapper that is made entirely from whole tobacco leaf, and has a wholesale price of no less than twelve dollars ($12). A premium cigar does not have a filter, tip, or nontobacco mouthpiece and is capped by hand.”

The price requirement is easily the most difficult hurdle to clear for the premium cigar industry, as that would mean that a cigar with a $12 wholesale price would have a retail price of around $24, which few if any flavored premium cigars have.

The law also includes an exemption for loose leaf tobacco, which the bill defines as “cut or shredded pipe tobacco, usually sold in pouches, excluding any tobacco product which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes, including roll-your-own cigarettes.”

There is also a sizable exemption for flavored shisha tobacco that is sold by a hookah tobacco retailer, though the law requires several conditions to be met:

• The hookah tobacco retailer has a valid license to sell tobacco products;
• The hookah tobacco retailer does not permit any person under 21 years of age to be present or enter the premises at any time;
• The hookah tobacco retailer shall operate in accordance with all relevant state and local laws relating to the sale of tobacco products; and
• If consumption of tobacco products is allowed on the premises of the hookah tobacco retailer, the hookah tobacco retailer shall operate in accordance with all state and local laws relating to the consumption of tobacco products on the premises of a tobacco retailer.

If signed into law, retailers who violate the law would be subject to fines of $250 per occurrence. The bill also allows local municipalities to enact stricter laws than those of the state, meaning they could remove any exemptions and increase fines if they desired.

For consumers, the bill does not make it illegal to possess such products.

It also does not prohibit flavored marijuana products, which are currently legal under state law.

The bill has already been met with opposition and criticism from the Cigar Association of America, which recently decried the exemptions as a red herring. It has called for all cigars, especially premium cigars, to be treated the same way as loose leaf tobacco and shisha.

The bill notes that the change comes with a substantial cost, as some estimates have put lost revenue as high as $407 million within the first two years of enactment. The reports did account for the potential that significant savings could be seen on the healthcare side of the ledger.

The two chambers must now resolve the differences in their versions of the bill; the Senate bill did not include the exemptions that were passed in the Assembly.

If passed, it remains to be seen whether the ban will be challenged in the courts. A lawsuit brought by several manufacturers of flavored tobacco products regarding a similar ban enacted by Los Angeles County was recently dismissed by a U.S. District Court judge as not violating federal laws regarding the regulation of flavored tobacco products.