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Cuban Cigars

Future of Cuban Cigars in U.S. Hinge on FDA

The fate of Cuban cigars in America and, indeed, all premium cigars in the U.S. is caught up in a political struggle over e-cigarettes and other forms of tobacco not regulated by the U.S. Food and Drug Administration.

As the industry awaits the FDA’s so-called “deeming” regulations, which we explained in-depth previously, a Congressional committee recently adopted a legislative provision that would ease the regulations’ impact on premium cigars, e-cigarettes, hookah tobacco and additional tobacco products.

The FDA proposes to apply restrictions to all previously unregulated tobacco products. Products introduced to the market since February 15, 2007, would be required to go through an expensive process to gain approval as new products in order to stay on the market. This would include any cigar whose blend has changed since 2007, which means virtually all cigars, according to the executive director of the National Association of Tobacco Outlets.

The FDA itself has said the process would cost millions of dollars for each “new” product.

As for Cuban cigars, since they have not been available on the U.S. market for over 50 years, each brand would have to undergo the expensive approval process. This could cost too much to make entering the market worthwhile.

The FDA proposal is known as “deeming” because it deems these new tobacco products and, for the first time, cigars, to be subject to the Federal Food, Drug and Cosmetic Act, under which cigarettes and other tobacco products are already regulated.

But last week, an amendment to the U.S. House Appropriations bill, which funds the FDA, moved the predicate date for requiring the approval process to the date that the FDA’s deeming proposal is adopted. Thus, products that entered the market between February 2007 and approval of the new regulations will not have to obtain approval from the FDA to be sold.

As The Hill, a newspaper that covers Congress, reports, “The panel approved a measure from Reps. Tom Cole (R-Okla.) and Rep. Sanford Bishop (D-Ga.) to mandate that the FDA put e-cigarettes under an easier approval process than the administration wants to use.”

The Appropriations bill, with that amendment (among others), has cleared committee and awaits action by the full House. Its language could be changed once the full body takes it up, and there are factions that want the stricter regulations applied.

But as the Hill report and others indicate, it’s e-cigarettes and “vaping” that legislators are most concerned about. The committee voted against an amendment from Rep. Rosa DeLauro (D-Conn.) to allow regulations on specialty and flavored cigars, according to The Hill.

In fact, one version of the FDA’s proposal specifically exempts premium cigars from the new requirements, though it is not known whether the FDA intends to adopt that version.

Political Fight Mostly About E-Cigarettes

In short, the fight over e-cigarettes is over whether they do only harm or whether they may do some good. They do deliver nicotine, the addictive element of tobacco smoke.

Proponents say they are useful to wean smokers who are trying to kick the habit. Opponents say the sweetly flavored smokes are targeted at kids.

“The crux of the controversy is about whether e-cigarettes act more as a gateway into or a ticket out of dangerous tobacco use, the single largest cause of preventable deaths in the U.S.,” writes Ars Technica.

The Hill quotes Rep. Debbie Wasserman Schultz (D-Fla.) as saying, “It’s nice hear there are some who believe — although we don’t have data to attach to that — that they have been able to eliminate their addiction to cigarettes by using these products, but the purpose of this industry is to keep people addicted to nicotine and raise another generation of children who are addicted to nicotine.”

Deeming regulations would mean the same threat to the e-cig industry as they do to cigars. Previous reports have said 99 percent of the industry could be wiped out.

“The key concern in our mind is if the final regs stifle or restrict innovation, which would be an overall negative for the industry and public health,” writes a financial analyst for Wells Fargo. “We’ve long believed innovation is crucial for the long-term success of this category!”

In fact, says that analyst, “regulation of the e-cig/vapor industry is broadly positive for the big tobacco manufacturers since it will increase the barriers to entry and likely entrench them (big tobacco) even further.”

Both the e-cig and cigar industries have argued the loss of jobs due to overly stringent FDA regs is reason the FDA or Congress should reconsider the move.

Waiting on FDA’s Timetable for Cigar Industry’s Fate

Meanwhile, it’s unknown when the FDA might release its regulations. Some speculate that release is imminent, while others say deeming has been put on a back burner or the proposal will include the premium cigar exemption as President Obama seeks better relations with Cuba.

Earlier this year, reports said deeming regulations would move forward once Robert M. Califf, M.D., was named FDA commissioner.

At the end of March, shortly after taking office, Califf wrote about “a number of specific critical issues … on my front burner this morning (that) will remain there for the foreseeable future.” Among the issues listed:

Tobacco product deeming. Much effort has gone into developing the framework for the approach to the regulation of the broad array of tobacco products. FDA is working hard to finalize the deeming rule, which in its proposed form would extend FDA regulation over virtually all tobacco products, including electronic cigarettes, either all cigars or all but premium cigars [emphasis ours], pipe tobacco, certain dissolvables that are not “smokeless tobacco,” gels, and waterpipe tobacco.

So, all we can do is wait for the FDA. In the meantime, well, smoke ’em if you’ve got ’em.

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