Null
Null

Retailers

Null

The bulk of the deeming regulations apply to those manufacturing or importing cigars to the U.S., however, there are rules that affect retailers.

Age Requirements

As part of the deeming regulations, FDA increased the minimum age to purchase tobacco nationwide to 18. Most states already had rules requiring individuals to be at least 18 to purchase tobacco.

Furthermore, over a dozen states have raised the minimum age to purchase tobacco to either 19 or 21. A list of those states can be found here.

Retailers are now required to ask for identification for anyone under the age of 26.

Advertising

Retailers are subject to the same advertising restrictions as cigar manufacturers. For more info, click here.

Many of the restrictions regarding advertising are indefinitely on hold, but FDA plans to require warning statements to be placed on all cigar boxes, as well as advertising, which would include things like posters, social media posts, email lists to customers, online storefronts and other areas.

Currently, FDA requires any retailer that sells cigars individually to place a warning statement within three inches of the register.

Free Cigars

FDA’s deeming rules prohibit retailers and manufacturers to provide consumers with free cigars.

In short, a sale of some sort must take place in order for a retailer or manufacturer to provide a consumer with a cigar. FDA’s main concern is that a consumer could be provided with a cigar before purchasing an item and the free cigar could be used to entice them to purchase tobacco.

Legal examples could be a buy five cigars get a “free cigar” promote, a ticket to an event or really anything else where a consumer exchanges money with a retailer before the cigar is provided to them. There are state and local laws that could restrict the types of transactions, but federally the only requirement is for a transaction to take place prior to the consumer receiving cigar. (Along with the other federal rules like warning labels, age requirements, etc.)

FDA has stated that cigars giving from one business to another—such as a manufacturer providing a sample to a retailer—are permitted. However, manufacturers and retailers donating cigars to charity is illegal, as the charities themselves are not licensed tobacco dealers.

In-Store Rolling

FDA’s deeming regulations have severely restricted the number of stores which can legally roll cigars on premise.

Operations that do so—whether one cigar roller or 1,000—are now required to be licensed as a domestic tobacco manufacturer. This subjects them to all of the rules that are required of large-scale foreign manufacturers such as user fees, ingredient listing, product approval and warning labels. These restrictions also apply to temporary, in-store rolling events; likely ending that practice on any legal basis.

Because the vast majority of domestic cigar rolling operations are quite small, it is likely that only a minority will be able to survive once the full deeming regulations are enacted.

Of note, a D.C. District Court changed FDA’s requirements regarding stores that blend pipe tobacco. Originally, FDA was going to require those stores—ones who mix pipe tobaccos on premises—to also register a domestic manufacturer. Ultimately, the court ruled they would not have to. The court did not grant the same relief to cigar stores who roll their own cigars.

Increased Prices & Limited Supply of Cigars

Until FDA’s warning label requirements go fully into effect, most cigar retailers will have experienced very little direct effects of the deeming regulations.

Indirectly, cigar retailers have been affected in two major ways.

1. INCREASED PRICES

Due to user fees and mounting legal bills, cigar manufacturers are continuing to increase their prices on an annual basis. Some manufacturers increased their prices three times within a 12-month period after the deeming regulations went into effect.

For retailers, this isn’t entirely bad news as increased prices mean greater margins, but there’s no question the number of $10 cigars available post-Aug. 8, 2016 is far fewer than the number prior to when the deeming regulations went into effect.

2. DECREASED SELECTION

The deeming regulations dramatically affected how new cigars can be brought to market. While some manufacturers have found ways around this, others have not. The number of new cigars entering the market has decreased for other reasons as well, but for many manufacturers, FDA is a big part of the overall decline.

One interesting side effect of the deeming rules is that it created a situation where some manufacturers have been encouraged to bring back old blends. Any cigar being marketed prior to Feb. 15, 2007 is considered grandfathered and as such, the number of old cigars reentering the market, usually with new packaging, has increased dramatically.

Online & Catalog Sales

FDA’s deeming regulations explicitly did not ban online or catalog sales.

The only major changes relate to the warning labels that will be required in the catalogs, online storefronts and in some cases, boxes shipped to consumers. FDA has indicated that it believes that retailers may need to place warning labels on shipping boxes if the cigars inside do not contain a warning statement.

Because all cigar warning label requirements are indefinitely suspended, it remains to be seen if FDA will go forward with the shipping box requirement.

Undercover Compliance Checks

FDA’s undercover compliance checks, where representatives of the agency pose underage buyers of cigars to see if retailers follow the proper procedures: do not sell to anyone under 18 and card anyone under the age of 27.

The agency has begun to not only target cigar stores but also to buy premium cigars. Some retailers have passed, while others have failed.

FDA has a searchable database available here.

Last Updated: May 23, 2019.

Null
Null