The U.S. Food & Drug Administration (FDA) has announced its plans to regulate deemed tobacco products and it does not look good for cigar smokers.

The agency chose Option 1, the harsher of the two options, which would treat premium cigars like other deemed tobacco products. It was considering Option 2, a provision that would have exempted premium cigars from this set of regulation, but the agency rejected that notion on a variety of grounds.

In the document, FDA outlined its reasonings for choosing the harsher rule:

After thorough review of the comments and the scientific evidence, FDA has concluded that deeming all cigars, rather than a subset, more completely protects the public health and therefore has adopted Option 1 in the final rule. FDA has concluded that: (1) All cigars pose serious negative health risks, (2) the available evidence does not provide a basis for FDA to conclude that the patterns of premium cigar use sufficiently reduce the health risks to warrant exclusion, and (3) premium cigars are used by youth and young adults

Barring an injunction from a court or Congressional review, the new rules will go into effect in 90 days, Aug. 8.

Products that were marketed prior to Feb. 15, 2007 are considered grandfathered and as such are exempt from FDA regulation. Products that were marketed between Feb. 16, 2007 and Aug. 8, 2016 will also be able to remain on the market, but manufacturers will have to submit these products for approval by FDA. While that process is taking place, manufacturers will continue to be able sell these products. While the companies will have to stop handing out free cigars by Aug. 8, they have effectively 25 months from today before they need to update all packaging to include text-based warning labels.

After Aug. 8, manufacturers will need to apply for FDA approval before bringing any new products to market.

As for how much regulation will cost, it appears FDA has not finalized those numbers. The agency did say that it will likely allow “small-scale manufacturers”—those with less than 150 employees and less than $5 million in annual revenue—to apply for a six-month extension on substantial equivalence requirements, meaning these manufacturers could keep their products on the market through late 2018 before either submitting for substantial equivalence or pulling the products from market.

The agency did state that it will not consider blend changes “to address the natural variation of tobacco (e.g., tobacco blending changes due to variation in growing conditions) in order to maintain a consistent product” a new product. However, any changes that are designed specifically to change flavor or nicotine characteristics, “including those involved in seasonal and boutique blends” will be considered new products. It’s unclear how the agency plans on determining a manufacturer’s intent for a particular blend change.

Previously, FDA had stated this set of regulations would not affect sales of cigars over the internet or via catalog. The agency has said it will not change how cigars are sold over the internet, other than including a new requirement that all tobacco products must be sold to individuals over the age of 18:

FDA does not intend for section 1140.14(b)(3) to prohibit the sale of tobacco products via the Internet, but the sale of covered tobacco products via any medium, including the Internet, must only be to persons 18 years of age or older.

Many had hoped FDA would change the grandfather date, i.e. Feb. 15, 2007, to a date when the rules are enacted (Aug. 8, 2016). For cigars, this would allow for thousands of products to avoid having to apply for substantial equivalence in order to stay on the market, but was a much larger issue for the e-cigarette category which argued substantial equivalence might not apply because of how new the category was. FDA has long argued–and continued to argue in the document–that it does not believe it has the authority to change that date, something it claims only Congress can do.

While this set of regulations does not ban flavored cigars, in the document, FDA has announced it intends on removing all ‘characterizing flavors’ from tobacco products in the future:

(Response) FDA is announcing that it intends in the future to issue a proposed product standard that, if finalized, would eliminate characterizing flavors in all cigars including cigarillos and little cigars.

Any manufacturer or distributor caught selling products that do not meet FDA requirements will be subject to fines and other penalties. In addition to requiring manufacturers to place one of five labels on two parts of cigar boxes, all advertising on this website, magazines and in other such media will be required to contain a warning label that is 20 percent of the size of the total advertisement, a requirement that will begin one year from the regulation’s publication date. Cigar manufacturers will be required to submit a plan to FDA showing which labels they use and for what product.

It is expected that a variety of industries will file lawsuits against FDA to change and/or delay the implementation of these rules today. For the premium cigar industry, this will likely take place via a lawsuit in the U.S. District Court for Southern Florida according to one source.

Another route for lessening rules is via Congress.

Last month, the House Appropriations Committee on Agriculture passed language that would include an exemption for premium cigars, similar but more overreaching than Option 2, and separate language that would change the grandfather date to whenever the rules are enacted, i.e. Aug. 8. Both provisions will be included in the agriculture bill whenever it is voted on, but, that is not expected to happen until after Aug. 8.

Separately, the process of congressional review. Under this provision, members of Congress could pass a resolution stating that FDA has gone outside the intent Congress originally granted them via the Tobacco Control Act. Gaining any sort of win here seems very slim as even if Congress passed a resolution of Congressional disproval, it would almost certainly be vetoed by President Obama unless Congress could get two-thirds of both the House and Senate to vote for disproval, overriding a veto.

The full text of the document is available here. This is a breaking story, updating as more information becomes available.


Avatar photo

Charlie Minato

I am an editor and co-founder of Media, LLC. I previously co-founded and published TheCigarFeed, one of the two predecessors of halfwheel. I have written about the cigar industry for more than a decade, covering everything from product launches to regulation to M&A. In addition, I handle a lot of the behind-the-scenes stuff here at halfwheel. I enjoy playing tennis, watching boxing, falling asleep to the Le Mans 24, wearing sweatshirts year-round and eating gyros. echte liebe.