Graded: Ten Questions for 2022

Here are once again at the end of another year, looking back on what happened in the past 365 days and starting to think about what will the coming 365 days will hold.

Once again, there were a number of topics facing the premium cigar industry in 2022, as potential regulation and further legislation remain constant threats, changing political landscapes affect countries that produce cigars, and somewhat unforeseen changes had what appear to be significant impact on consumers and their purchasing habits.

While many people make predictions about what a year will hold, we also grade our predictions. Specifically, Charlie Minato does the former, while I do the latter, seeing just how accurate his predictions were before he makes his next round of predictions in Ten Questions for 2023.

So break out your red pens, it’s time to grade Ten Questions for 2022.

1. WHERE DOES SUBSTANTIAL EQUIVALENCE FOR CIGARS END UP IN 2022?

Prediction: I am really torn about the prediction here, particularly the timeline being the end of 2022 because I think it could be very close to the end of the year, but my official prediction is substantial equivalence applications for cigars will be due in the first half of 2023.

In figuring out how to grade these predictions, one of the first things that I do is search the tags we use for articles to make sure I’m looking at all the articles we’ve written about the topic. The most recent article about substantial equivalence was posted in early October 2021 and was largely the foundation of the original question.

As was noted in the article, the effect of FDA’s plans for substantial equivalence remains unclear. Now, the entire topic of substantial equivalence is effectively on hold due to a July 2022 ruling from Judge Amit P. Mehta of the U.S. District Court for the District of Columbia in which the U.S. Food & Drug Administration’s (FDA) regulation of premium cigars was deemed arbitrary and capricious due to issues related to the Administrative Procedures Act (APA). Mehta found that FDA ignored data about premium cigar usage while it was formulating its regulations. It was one of the biggest victories for the premium cigar industry in the six years that the matter of regulation has been in the courts.

Grade: A for it not happening in 2022, however, the second part looks like it’s going to be an F given Mehta’s July 2022 ruling.

2. BY THE END OF THE YEAR, DO INVENTORY LEVELS LOOK LIKE DECEMBER 2019 OR DECEMBER 2020?

Prediction: From a cigar inventory level, the end of 2022 will look much closer to 2019 than 2021.

Judging by what we see and hear about when it comes to backorders, there doesn’t seem to be a ton of them, and at least in our respective local areas, we’ve seen well-stocked humidors and retailers not generally having problems getting most products, which makes this look a lot more like December 2019. Supply levels seem sufficient if not bloated in certain instances, particularly compared to 2020 and 2021. After a surge during the pandemic, it appears that most companies have caught up and outside of a hot limited edition or random big purchase by the customer before you, most consumers shouldn’t have much trouble finding the non-Cuban cigars they want.

Grade: A. 

3. DOES THE SHORTAGE OF CUBAN CIGARS GET ANY BETTER BY THE END OF 2022?

Prediction: There’s no real reason why I think this gets much better next year, but it’s difficult to imagine a world where it gets much worse than this. I suspect it’s more or less the same, though there might be slight improvements in specific areas. Second prediction: Patrick is going to hate me for making him grade this.

If there’s one challenge in answering this question, it’s that Habanos S.A. and its distributors do not like to admit that there even is a problem, so getting on-the-record answers is challenging if not almost impossible. That leads to relying on scattered insights and comments from different regions of the world, and as with most things, the commentary about the bad tends to be louder than that about the good.

There’s also a bit of a problem with the question in that the Habanos S.A. portfolio is fairly substantial, and not all areas of the portfolio have the same inventory struggles. Some brands are much more popular than others, and there are different challenges with raw materials when it comes to making large ring gauge cigars than smaller ones. So that has to be kept in mind.

I also can’t overlook the impact of the move to a global pricing standard that Habanos S.A. implemented in 2022, moving to base prices worldwide off of those in Hong Kong, one of the most expensive markets for Cuban cigars worldwide. Presumably, this affected consumption of Cuban cigars, either reducing purchases, shifting to New World cigars, or shifting to other less expensive brands.

If there’s one thing I can say, I haven’t heard or seen much to suggest that there is an abundance of stock across all the lines sitting on store shelves. There seem to be areas of the portfolio that are better stocked than others, and there are others where I’m sure that a shipment is either sold before the tape on the box is cut, if not long after.

Grade: A for the prediction about things staying largely the same, B for hating to have to grade this.

4. DOES CUBA’S NEXT HUMIDOR AUCTION TAKE PLACE IN FEBRUARY OR SEPTEMBER?

Prediction: It’s not taking place in February, but I expect Habanos S.A. to hold a humidor auction at some point in the second half of 2022. If I had to guess a month, I’d say September; I don’t know anything specifically, but that’s what people on the internet are saying and when have people on the internet ever been wrong?

Charlie nailed this one, as in September, Habanos S.A. hosted a gala celebration of the 55th anniversary of its Cohiba brand, complete with a humidor auction. The one note about the September event is that unlike the auctions held during the Festival del Habano, which include a humidor dedicated to each of Habanos’ six global brands, this auction featured just two items, both dedicated to Cohiba. One lot was called Humidor Rare Le Rituel, which contained 49 bottles of Champagne Rare Millésime and 44 of the Cohiba Ambar, a package that sold for €100,000 ($99,571.20 at the time).

But the headliner was the Cohiba 55 Aniversario humidor, which contained 550 cigars from throughout the Cohiba portfolio, in a structure that measures 67 inches (170cm) tall by 51.2 inches (130cm) wide and 39.4 inches (100cm) in depth. The humidor’s design features veneers of precious woods, mother of pearl embedded along the base, and the Cohiba 55th Anniversary logo in gold with Swarovski crystals. It ended up selling for €2.4 million ($2.39 million).

As far as we know, the next humidor auction will take place during the 2023 Festival del Habano which runs from February 26-March 3, so start getting those bids ready.

Grade: A.

5. WHEN ARE THESE NEW PREMIUM CIGAR ASSOCIATION INITIATIVES GOING INTO EFFECT?

Prediction: I’m going to try to be optimistic and say that we’ll hear a lot more about them at the 2022 PCA Convention & Trade Show but I’m not sure why there’s any reason to believe that words have turned into actions given what’s taken place in the latter half of 2021.

At the 2021 PCA Convention & Trade Show, the Premium Cigar Association announced that it would be launching some new initiatives as it looked to acknowledge some problems and improve how it serves its members. What those would be, however, remained somewhat vague as the organization didn’t disclose what all it had in mind.

Looking back on 2022, the PCA did make some changes, notably announcing that it was expanding its board from 15 to 19 people by way of adding four new seats for manufacturers.

They also announced a new mission statement: PCA exists to grow the business of specialty tobacco retailing. Then in February, the PCA announced Vision 50, an initiative that will serve as a roadmap for the organization, particularly focused on localized action.

But beyond that, the organization hasn’t released much in the way of specifics. If anything, I had to think back long and hard about the 2022 PCA Convention & Trade Show about whether or not anything was announced about the Vision 50 initiative, and I can’t recall anything that stands out beyond discussion about the site of the trade show in the coming years. If we’re being honest, I didn’t even recall Vision 50 until a search of the website turned it up, which says a fair amount about how that has been going. Unless I completely missed it, there weren’t Vision 50 banners or logos at the trade show, and there hasn’t been branding in e-mails. There is this YouTube video, however, which has garnered 43 views in 10 months.

In fairness, the PCA has done a good job hosting some get-togethers for members of the industry and has launched a campaign to help Canadian cigar smokers fight back against legislation, both of which are commendable.

Just with legislation and litigation, not to mention the trade show, PCA seemingly has its plate full of important to-dos, so there is a side of me that is not surprised that the rollout of new initiatives hasn’t happened yet, or at least not to the level that we may have expected. Hopefully, we see something in 2023, as I think both the organization and the cigar industry as a whole would agree, an active embrace of the future and subsequent actions are very much needed.

Grade: A. 

6. HOW MANY COMPANIES ARE MAKING ADVENT CALENDARS IN 2022?

Prediction: Patrick set the over/under on the number of companies making Advent calendars in 2022 at 4.5. I will take the over.

After cigar brands Oliva and cigar retailer Smoke Inn released Advent Calendars in 2021—with Tatuaje having to delay its release into 2022—Charlie seemed pretty convinced that more companies would join in on the fun in 2022. The releases offered a pretty appealing value proposition, made for an interesting gift for yourself or a cigar smoker in your life, and Oliva mentioned that sales had been better than expected, so it seemed like at least a few more companies would try it out. It turns out that those same three companies were the only ones that I know of to release Advent Calendars this year, meaning Charlie’s prediction of at least five cigar Advent Calendars was off the mark.

Grade: F.

7. WHAT WILL COME OUT OF ELADIO DIAZ’S NEW FACTORY?

Prediction: Cigars will come out of Eladio Diaz’s new factory.

Yes, they did, and they even came with a bit of controversy as to what was the true “first cigar” to be made at Tabacalera Diaz Cabrera, with one of the contenders being Agape from Freud Cigar Co., the other being Tabacalera Diaz Delectados Ox Blood from Privada Cigar Club. Then there was Divino, a creation for Luxury Cigar Club. We also have our first 2023 release to come from Tabacalera Diaz Cabrera, the SP1014 Black from Sanjay Patel of Sanj’s Smoke Shop. In fairness, Charlie admitted that he was primarily curious about the question more than the answer, but it has been interesting to see the first wave of cigars coming out of this new factory.

Grade: A+. 

8. HOW MANY COMPANIES STOP SELLING FLAVORED CIGARS IN CALIFORNIA BY THE END OF 2022?

Prediction: Zero. I suspect that the law won’t actually be enforceable by the end of the year. I don’t have any polling data that would indicate whether the law will survive the referendum, but there have already been lawsuits filed to overturn the law and I suspect at least one of them will be able to find a judge to issue an injunction that will at least delay implementation until after 2022.

After a drawn-out process to get from legislative approval to voter approval, California’s ban on the sale of most forms of flavored tobacco and nicotine deliver products went into effect on Dec. 21. In the roughly 10 days since, we haven’t heard of any companies pulling out of California, despite tobacco companies not getting help from the U.S. Supreme Court in blocking the ban’s implementation earlier in December. There are a number of issues with the California law, chief among them being enforcement and vagueness with some definitions in the law, and that’s before more legal challenges could be filed to get those details resolved. I think it will be more interesting to see what happens in the first months of 2023 as the new law settles in, but for now, it seems to be business as usual in the Golden State.

Grade: A.

9. WILL FDA ADVANCE PLANS FOR A FEDERAL BAN ON FLAVORED TOBACCO IN 2022?

Prediction: I don’t think there will be much done on this in 2022. My best guess is: FDA gets as far as issuing an ANPRM next year to get some comments, which would be an early step in what’s likely to be a long and contentious process towards an eventual ban.

As I mentioned earlier, to start looking at what happened with the FDA’s plan for a ban on flavored tobacco ban, I searched the site for our commonly used tags, and while there was a lot that had to do with flavored tobacco in general—thank you California, Maine and a number of cities around the country—at a federal level, it was relatively quiet in the second half of 2022. The public comment period closed on Aug. 2, and we haven’t heard much of anything since, which certainly lines up with Charlie’s prediction. We’ll have to wait and see if his guess comes to fruition and FDA takes the next step in what is sure to be a lengthy process, and one that on a larger level will almost certainly be made in a different landscape as more states and municipalities pass their own laws and those affected by them challenge their legality.

Grade: A.

10. DO THE QUALITY CONTROL ISSUES IMPROVE IN 2022?

Prediction: As mentioned above, I think the demand for cigars is going to reduce in 2022. As such, that alone is likely to mean that these issues should be alleviated, particularly in the second half of the year.

This is a tougher question to grade because a large part of getting to an answer depends on one’s experience with cigars in 2022, and try as hard as we might, none of us—as individuals or collectively as halfwheel—get to smoke every cigar that comes out over the course of a year. So the cigars that one does smoke, combined with what one hears and sees from others, go a long way to forming one’s opinion.

A while back, in a conversation not related to this editorial, Charlie and I talked about quality control and the cigars of 2022 on the whole, and he was of the belief that there are still significant problems when it comes to quality control issues, calling 2022 either the worst year or tied for the worst year in terms of quality control and/or construction issues, I.e. things that go beyond just not liking the flavor of a cigar. In looking at his reviews, construction issues were certainly a theme, and without going too far into the weeds, he contributed a significantly fewer number of cigars to the Top 25 pool than Brooks did, with my contribution in the middle.

Speaking from my own experience, I had my share of construction problems as well, and I certainly don’t think of 2022 as a year of great cigars on the whole. If anything, I’d call it a year of some very good cigars, but a lot more that fell into the big part of the bell curve for one reason or another, but generally just lacking something that helped most of them stand out from the crowd.

In looking at our data, there is only so much to be gleaned, as scores weren’t notably off the average for recent years. One thing that does bear mentioning is that we reviewed far fewer Cuban cigars this year, a subgroup that has generally hurt scores, both overall and in the construction category.

While our respective levels of how bad things are might vary, both Charlie and I disagreed with his prediction, though acknowledged they while the issues could be fixed, there’s nothing to indicate they have been fixed. There is still the very real issue of personnel issues in Nicaragua, as people have been leaving the country, and that group invariably includes people who were previously tobacco processors, cigar rollers and quality control staff, further exacerbating the problem. Here’s to hoping that 2023 gets the trajectory back on the course it seemed to be on when I was writing the 2019 version of this article.

Grade: C-. 

Patrick Lagreid

I strive to capture the essence of a cigar and the people behind them in my work – every cigar you light up is the culmination of the work of countless people and often represents generations of struggle and stories. For me, it’s about so much more than the cigar – it’s about the story behind it, the experience of enjoying the work of artisans and the way that a good cigar can bring people together. In addition to my work with halfwheel, I’m the public address announcer for the Colorado Rockies and Arizona Diamondbacks during spring training, as well as for the Salt River Rafters of the Arizona Fall League, the WNBA's Phoenix Mercury and previously the Arizona Rattlers of the Indoor Football League. I also work in a number of roles for Major League Baseball, plus I'm a voice over artist. Prior to joining halfwheel, I covered the Phoenix and national cigar scene for Examiner.com, and was an editor for Cigar Snob magazine.