This past year was another terrific year in which we were able to utilize the momentum of the tremendous 2022 to propel our organization and the industry to a whole new level. As we look forward to 2024, and an unprecedented year of change and growth, let’s look back at some of the significant work and achievements your organization has accomplished on your behalf.
FDA LITIGATION
We achieved something that many thought we never could: VICTORY over the deeming rule and the FDA’s overreach! We have won ALL THREE lawsuits to bring stability—and sanity—back to our industry. And while the decision was in our favor, true to form, the FDA has filed their notice to appeal the decision. Rest assured, we are already preparing and gearing up for another fight.
We are already 3 and 0 against the FDA. Let’s make it 4 and 0. PCA remains steadfast in its commitment to defending the industry’s autonomy and holding FDA accountable for its failure to appropriately justify its attempts at regulating the premium cigar market. Initial briefs for the appeal will be filed in January 2024.
FEDERAL HIGHLIGHTS
NO FEDERAL TAX INCREASES
Through constant vigilance, we’ve monitored thousands of bills and blocked efforts to raise government revenue on the backs of premium cigar and pipe tobacco businesses.
This achievement has created a stable business environment by ensuring that products maintain market position as a luxury good with a broad adult consumer base.
OPPOSITION TO FDA’S PROPOSED RULE ON TOBACCO PRODUCT MANUFACTURING STANDARDS
PCA’s public testimony before the FDA highlighted flaws in their technical analysis and many unintended consequences. Additionally, we collected over 1,600 signatures on a petition and advised 25 manufacturers on their own written testimonies. These collective efforts are influencing the regulatory discourse surrounding premium cigar manufacturing standards.
OPPOSITION TO FDA’S PROPOSED FLAVOR BAN
PCA filed a public comment opposing FDA’s Standards on Characterizing Flavors in Cigars. PCA highlighted the fact that FDA has yet to produce data demonstrating specific risk associated with flavored products, economic impact to small and minority-owned businesses in specialty tobacco retail and impacts on U.S. trade partners. PCA was also granted the opportunity to provide an oral presentation to the White House Office of Management and Budget’s Office of Information and Regulatory Affairs in its final review of the proposed rule.
GRASSROOTS CAMPAIGN FOR CREDIT CARD FAIRNESS
This campaign involved educating and submitting hundreds of letters from PCA retailers, highlighting the need for oversight into merchant fees. Our advocacy joins that of the National Association of Convenience Stores, Petroleum Marketers Association of America and others calling for action that directly impacts the bottom line of your business.
COMBATING ORGANIZED RETAIL CRIME
Congress has introduced bipartisan and bicameral legislation to combat growing organized retail crime. The legislation improves definitions to make federal law enforcement resources more available to prosecutors and allows judges to order criminal forfeiture of goods. The bill also establishes a Center within the Department of Homeland Security to study organized retail crime, and to develop law enforcement and legal tools focused on dismantling networks.
INTERNATIONAL HIGHLIGHTS
DIPLOMATIC CIGAR CORPS LAUNCH
In April 2023, PCA successfully launched the Diplomatic Cigar Corps to rally foreign governments on the impact cigar regulation is having on international commerce. A significant milestone in our government affairs efforts, this initiative has strengthened diplomatic engagement and fostered collaboration among industry stakeholders worldwide. The Corps represents the industry’s global supply chain and economic significance, from seed to smoke.
FIGHTING CANADA’S PROPOSED PACKAGING STANDARDS FOR PREMIUM CIGARS
Joining the tobacco-free society mantra that all products are equal, Canada’s health department has proposed that all premium cigar packaging must include 75 percent coverage with graphic warnings. PCA is working with our Canadian partners to campaign against this disgusting scare tactic that has no basis in fact. To date, we’ve secured nearly 800 consumer letters and more than 70 retailer letters, to ensure that this proposal isn’t adopted without a fight.
NON-GOVERNMENTAL ENGAGEMENTS
PROTECTING THE RIGHT TO COMMUNICATE WITH CUSTOMERS
A year ago, PCA members began reporting that their merchant-to-customer text messages regarding sales and special events were being blocked. PCA’s investigation found that many messaging service providers were misinterpreting the SHAFT protocol developed as a self-regulatory initiative by wireless carriers to prevent SPAM of age-restricted products. PCA has begun engagement with CTIA—the administrator of SHAFT—calling for clearer guidelines that will protect the interests of retailers communicating directly with consenting customers.
INFLUENCING LEED CERTIFICATION RULES
As LEED certification has become a standard for meeting local building requirements in many communities, anti-smoking advocates have used their influence to block locations of stores, lounges and even charitable events. PCA is engaging the U.S. Green Building Council to educate them on modern ventilation, exhaust and indoor systems and calling for specific exemptions to allow smoking where consenting adults choose to engage in commercial or charitable events.
STATE ADVOCACY
As we implemented our Vision 50: Decade of Action, we have gone more on offense in passing positive legislation across the country. Not only do we have a stout defense, but we have also scored major victories during state legislative sessions earlier in the year:
- NO NEW TAXES for three straight years
- Four new state tax caps passed last year, bringing the total to 16 nationwide, and three tax caps progressing for next year and several tax decreases moving forward
- Three new cigar bar bills passed
- Generational smoking bans failed to advance in California and Hawaii
- Flavor ban legislation has failed to advance in Texas, New York, Washington, Vermont, Indiana, Minnesota,Connecticut, New Mexico
- Statewide smoking restrictions failed to advance in Pennsylvania and Mississippi
State legislative issues have not waned since the adjournment of most capitol sessions, and PCA has responded to a number of bills that were filed earlier in the year and resurfaced through the committee hearing process.
The first was Massachusetts, where legislation that was filed earlier in the year was granted a hearing. This bill would double the OTP tax on cigars and other products, to 80 percent of wholesale price. PCA immediately issued a retailer alert, with a dozen shops contacting their legislators with personal messages of opposition, given the crippling effect such an increase would have. PCA also issued written testimony to the committee. A hearing was conducted and no vote was taken, but the legislation remains alive.
Next is Pennsylvania as bill sponsors for legislation calling for an end to all smoking exemptions received a hearing and vote this fall. In its original form, the legislation would ban all smoking in Pennsylvania cigar shops, bars, and lounges. PCA, in concert with the Pennsylvania retailer’s association, issued committee testimony and launched an on-line petition in opposition. After nearly 1,300 messages to the committee, an amendment for cigar shops, bars and lounges was proposed and adopted by the committee.
After having adopted a “no new smoking establishments” law in 2009, legislators in Wisconsin have just introduced legislation that would remove the grandfather clause in the state code, allowing for new cigar bars in Wisconsin. PCA endorsed the legislation, and it awaits further action.
This came on the heels of legislation filed in Michigan calling for cigar bar and lounge licensing assistance, which PCA also endorsed. The bill is advancing through the committee process.
STATE OUTLOOK FOR 2024
Since July, PCA has been planning with local retailers and state associations for 2024 legislative threats and opportunities. Tax cap bills are being planned in Georgia, Nebraska and Kentucky; flavor ban opposition is planned for Maine and the state of Washington; continued efforts for tax caps are planned for New York, New Jersey and Virginia; and association formation and organization is underway in Louisiana, Kansas, Kentucky and Georgia.
Also during the 2024 legislative season, PCA anticipates generational smoking ban efforts in California (promised by the 2023 bill patron) and in Massachusetts.
In all, PCA at this stage anticipates legislation in 17 states in 2024.
PCA23 ANNUAL CONVENTION & INTERNATIONAL TRADE SHOW
PCA held its Annual Convention & International Trade Show July 7–11, 2023 at the Venetian Resort in Las Vegas, Nevada. It was announced earlier in the year that this would be the last Trade Show held in July as the Trade Show will be moved earlier in the year, with 2024 being held March 22–25, 2024 at the Las Vegas Convention Center.
The 2023 Trade Show welcomed more than 2,000 retailers and more than 250 exhibiting companies.
Prior to kicking off the trade show, Friday was packed with events. The show kicked off with a preview of a new premium cigar docuseries from the makers of the movie Handrolled, followed by tobacco seminars from Toscano and a fascinating panel from three master blenders—Nestor Plasencia, Jr., Christian Eiroa and Manolo Quesada—about the science and artistry of cigar making, moderated by Michael Herklots.
The PCA Annual Meeting announced the 2025 meeting will be held April 11–14, 2024 in New Orleans and the election of four new retailers to the board. The Annual Meeting was followed by the opening party hosted by Espinosa, Dunbarton Tobacco & Trust, Room 101 and Quality Importers.
Over the course of the show, we held our dynamic Happy Hours on the show floor, held additional “PCA After Dark” smoking events that offered additional networking time, and even had golf simulators on the show floor.
MEMBERSHIP
2023 saw membership numbers grow again, this time reaching pre-pandemic levels. We have added new affinity partnerships for OTP tax software and staff management to help reduce costs. And we have continued to grow our state association partnership with increased investment for better engagement, communication and advocacy at local levels.
SUMMARY
2022 saw a record surplus for the PCA, which allowed us to reduce our liabilities incurred from COVID by over $500,000. Your association stands on a very strong financial foundation, and this year we have had another year of strong fiscal management.
As we look to enter a new era, we will be increasing not only our advocacy efforts, but our overall membership efforts as well to provide the necessary resources, information, education and tools to grow specialty tobacco retailing.
– Article by Scott Pearce, executive director of the Premium Cigar Association (PCA). He can be reached at scott@premiumcigars.org.
This story first appeared in PCA The Magazine, Volume 4, 2023. To receive a copy of this magazine you must be a current member of PCA. Join or renew today at premiumcigars.org/membership.