SS June 2016

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38 SMOKESHOP June 2016 T he United States Food and Drug Administration released the long-awaited deeming rule in early May. The new rule significantly expands the FDA's regulatory author- ity over cigars and other tobacco prod- ucts. The Cigar Association of Ameri- ca is working diligently to provide its members—cigar manufacturers, im- porters, distributors, and major indus- try suppliers—with the resources they need to comply with the rule. We will continue to be a leading advocate for the industry as it moves into a new era. The FDA considered two options un- der draft rules published several years ago. The final rule selects option one, which "deems" all tobacco products in- cluding cigars of any size, subject to the FDA's regulatory authority, and pro- vides no distinction for premium cigars. The rule takes effect on August 8, 2016. Over the last five years, the Cigar Association of America worked to pro- vide the FDA with as much information as possible. Our goal was to educate the FDA about the unique nature of the cigar industry and the need to develop a regu- latory framework that appropriately re- flects how cigars are produced, sold and consumed in the United States. The CAA submitted extensive com- ments to the FDA at various stages of the rule's development. We provided im- portant context, data and statistics, and industry expertise to the FDA. We emphasized the differences be- tween the production and consumption of cigar products and other tobacco products. Unlike other tobacco products, cigars are not produced in a uniform way. They vary in shape, size and type of construction. They are manufactured in a variety of ways, packaged in a va- riety of ways, and sold in a variety of ways. Cigars are also consumed differ- ently than other tobacco products. There is less brand loyalty and consumers fre- quently shop for new products. All of these factors mean that innova- tion is a hallmark of the cigar industry. Our industry changes rapidly to meet the desires of our consumers. We need a reg- ulatory structure that provides us with flexibility to deal with these unique as- pects. The bottom line of our message to the FDA: cigars are a unique product and should be regulated as such, not as part of one-sized fits all approach to tobacco. FIRST COMPLIANCE REQUIREMENTS SET FOR AUGUST 8, 2016 The new rule changes the landscape for the industry. While we hoped for a dif- ferent outcome and we recognize the new regulations are not an ideal situa- tion, the CAA is also prepared to move forward and provide the industry with the guidance necessary to comply. There are several immediate compli- ance points of which industry members must be aware. The first compliance point is the rule's August 8, 2016, effective date. Starting on August 8th, the newly deemed products will be subject to the same regulatory provisions as cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless to- bacco are already subject. Manufacturers are now required to register with the FDA (online at https:// and provide a product listing by this first deadline. Any establishment engaged in the man- ufacture, preparation, or compounding of a tobacco product must now register under FDA rules. This requirement does not currently apply to foreign manufac- turers. (Visit the FDA's website for all tobacco regulation matters at www.fda. gov/TobaccoProducts for complete regis- tration instructions and other resources). The registration requirement sets up the next major compliance point for manufacturers: quarterly user fees. The FDA expects to send user fee invoices by November 30, and payment is due by December 31. The FDA will also pro- vide a quarterly filing schedule for fu- ture filings. For retailers, August 8 also marks a significant compliance point. After this date, retailers will no longer be allowed to provide free samples to customers. Vending machine sales will also be pro- hibited. August 8 also marks the formal date for the FDA's new rule prohibiting > CAA INSIGHT Compliance Guidance as New Rules Change Premium Cigar Landscape The premium cigar industry's fight against FDA's unprecedented regulations fell well short of hopes, and while the effort isn't over, attention now turns to compliance. >BY CRAIG WILLIAMSON > A myriad of blends, sizes, and shapes of premium, hand-rolled cigars in the aging room of Tabacalera La Alianza, the Dominican Republic factory of E.P. Carrillo.

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