The New Year represents new challenges and opportunities for the premium cigar industry and the Premium Cigar Association (PCA). The PCA has been forecasting, strategizing, and prioritizing the issues and areas that affect our membership the most. With Congressional gridlock and narrow partisan margins in the U.S. Congress, we expect very few pieces of legislation to be signed into law in 2024.
The government action for 2024 is projected to be more regulatory than legislative on the federal front. Since 2024 is a Presidential election year, political schedules will be dominated by caucuses, primaries, conventions, advertisements, and fundraising. The year will also be filled with debate on legislation designed to posture for what a 2025 political environment will look like, given the potential for power realignments in the House, Senate, and White House. As a result, some of the policy issues usually reserved for the federal legislature may pivot toward state and local policy arenas.
CONGRESSIONAL
Tax Increases
In both the U.S. House of Representatives and Senate, active legislation remains a threat to the premium cigar and pipe industry that would result in massive federal tax increases. Standalone legislation exists in the form of the Tobacco Tax Equity Act and the Care for MOMS Act that use tobacco tax revenue to pay for new maternal health programs. The PCA is a vocal opponent of all tax increases for premium cigars and pipe tobacco at the federal and state levels and continues to communicate with congressional leaders why these policies harm manufacturers, retailers, and consumers.
REGULATORY
Characterizing Flavor Rule
The White House Office of Information and Regulatory Affairs is conducting meetings and a review of the Tobacco Product Standard for Characterizing Flavors in Cigars, which would prohibit characterizing flavors (other than tobacco) in all cigars. The PCA participated in many public forums and submitted written comments in opposition to the Tobacco Product Standard, primarily on the adverse economic impact on small businesses, and asserted that the proposed rule should not extend to pipe tobacco as has been suggested by some advocacy groups.
In November 2023, the PCA raised several objections to the product standard and asked OMB to remit the rule back to the Food & Drug Administration for further analysis. The Center for Tobacco Products (CTP) has since delayed the release of the final rule, which was expected in December 2023. Although the U.S. Food & Drug Administration (FDA) is working towards completing the Final Rule in 2024, it could prove politically challenging to release a final rule that would deprive millions of adult consumers of their preferred product choice before the election.
Tobacco Manufacturing Product Standards
The FDA is proposing new requirements for tobacco product manufacturers regarding their products’ manufacture, design, packing, and storage. The PCA participated in many public forums and submitted written comments opposing the proposed rule, including its applicability to premium cigar factories. The rule is expected to be sent to the Office of Management and Budget in 2024 for regulatory review.
Maximum Level of Nicotine
In 2022, the Biden Administration announced plans to develop a proposed product standard that would establish a maximum nicotine level to reduce the addictiveness of cigarettes and certain other combustible tobacco products. The stated goal of the potential rule would be to reduce youth use, addiction, and death. The agency has not moved on releasing a proposed rule and the main question for PCA is whether this rule will apply to premium cigars, cigars more generally, or pipe tobacco.
LEGAL
FDA Appeal of Cigar Association of America et al. v. United States Food and Drug Administration et al
In September 2023, the Department of Justice, which represents the FDA, informed the court of their decision to appeal the decision rendered by Judge Amit Mehta in Cigar Association of America et al. v. United States Food and Drug Administration et al., which vacated the deeming rule as it applies to premium cigars. The decision is being appealed to the United States Court of Appeals for the District of Columbia Circuit before a three-panel group of judges. The case is expected to be argued in 2024. At present, the vacatur of the deeming rule for premium cigars stands during the appeals process. However, the appeals court may be asked to block the ruling while it considers the arguments.
If you have any questions about federal legislative, regulatory, or litigation advocacy/policy, please contact PCA’s Deputy Executive Director/Head of Government Affairs Joshua Habursky joshua@premiumcigars.org