Cigar News: Premium Cigars Catch a Break as HR 2339 Heads To Senate

 

At a little after noon EDT today, the U.S. House of Representatives passed House Resolution 2339, also known as the Reversing the Youth Tobacco Epidemic Act of 2019. After a series of spirited debates and votes to alter certain aspects from both sides of the aisle, HR 2339 passed by a majority vote of 213-195. The primary focus of the bill is to impose stricter regulations on vaping and e-cigarettes in the hopes of cracking down on sales to minors as well as to prevent potential health threats to all. Part of this effort also targets banning online sales of all tobacco products, including premium cigars.

 

The good news for all in the cigar continuum is that the online sales ban provision exempts cigars as there is general acknowledgement that current data demonstrates that cigar sales to minors overall is negligible. In addition, the deeming provision for new products also exempts premium cigars. But some of the more ardent opponents of deeming and other harsh regulations aren’t ready to declare victory.

 

As Tobacco Business reported, Drew Newman, attorney for J.C. Newman Cigar Company,  was cautiously optimistic saying,  “Although it is not perfect, this is a historic bill and a huge step forward for the premium cigar industry. For the first time, the U.S. House of Representatives has recognized that premium cigars are unique, are not used by children, and should be exempt from unnecessary regulation.”

 

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In response to the bill’s passing vote in the House, the Administration’s Office of Management and Budget, released the statement below (in red) advising that should the bill make it to the President’s desk in it’s current guise, he would most likely veto the proposed legislation.

 

“The Administration opposes H.R. 2339. The Administration is encouraged by legislative efforts to protect American youth from the harms of addiction and unsafe tobacco products, and it also acknowledges that H.R. 2339 exempts premium cigars, which have comparatively lower youth usage rates, from certain regulatory burdens. Unfortunately, however, this bill contains provisions that are unsupported by the available evidence regarding harm reduction and American tobacco use habits and another provision that raises constitutional concerns. Accordingly, the Administration cannot support H.R. 2339 in its current form.

The Administration cannot support H.R. 2339’s counterproductive efforts to restrict access to products that may provide a less harmful alternative to millions of adults who smoke combustible cigarettes. This includes the bill’s prohibition of menthol e-liquids, which available evidence indicates are used relatively rarely by youth. It also includes the bill’s approach to remote retail sales. At this time, problems surrounding such sales should be addressed through the application of age verification technologies rather than, as this bill would do, prohibiting such sales entirely.

The Administration is also concerned about the constitutionality of a provision in the bill that prohibits certain advertising practices with respect to electronic nicotine delivery system (ENDS) products. The bill would prohibit marketing and advertising that “appeals to an individual under 21 years of age.” This standard may not satisfy the stringent vagueness test applied to regulations of speech under the Constitution’s Due Process Clause.

The Administration is committed to protecting the Nation’s youth from the harms of tobacco and has already taken several steps to do so. This includes signing legislation to raise the minimum age of sale for tobacco products to 21. In January 2020, moreover, the Administration issued guidance to prioritize enforcement against the unauthorized marketing of certain ENDS products to youth. And the Food and Drug Administration (FDA) is conducting regular surveillance of—and, when appropriate, taking enforcement measures against—websites, social media, and other publications that advertise regulated tobacco products.

The bill takes the wrong approach to tobacco regulation. Rather than continuing to focus on the FDA’s Center for Tobacco Products, Congress should implement President Trump’s Budget proposal to create a new, more directly accountable agency within the Department of Health and Human Services to focus on tobacco regulation. This new agency would be led by a Senate-confirmed Director and would have greater capacity to respond to the growing complexity of tobacco products and respond effectively to tobacco-related public health concerns.

If presented to the President in its current form, the President’s senior advisors would recommend that he veto the bill.”

 

Unfortunately, these wins are tempered by two other important aspects of the proposed legislation that can still adversely affect how the cigar industry does business. The bill defines a premium cigar as a cigar with a selling price of  $12 or more (was initially $10). According to the FDA’s data, this represents less than a quarter of all cigars sold in the US.  The other potential burden is that cigars would be subjected to the same strict marketing and advertising as cigarettes effectively nullifying a cigar maker’s ability to distribute branded swag or even sponsor local cigar events.

 

It is universally agreed that our nation’s youth need protections from the harmful effects of tobacco products and predatory marketing, but many argue that the bill contains provisions that lack evidence, focus on unrelated aspects or simply overlook common sense.  As the bill now heads to the Senate, where many are predicting it will most likely be defeated, President Trump’s team has made clear, should the bill make it all the way to the Oval Office, the legislation’s grim fate is certain. As the Trump Administration pushes for tobacco governance outside the walls of the FDA, positive compromise and concessions could make the bill more palatable for the cigar world.  For more information on H. R. 2339 click here and for CRA’s H. R. 1854 click here. – In Fumo Pax!

 

 

 

 

 

 

 

 

 

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