Yesterday, a formal complaint was filed in the United States District Court for the Central District of California in response to the new Unflavored Tobacco List in California by the Premium Cigar Association (PCA), Rocky Patel Premium Cigars, Inc., Oliva Cigar Co., Piloto Cigars, Inc., d/b/a Padrón Cigars, Inc., A. Fuente & Co., LLC, Ashton Distributors, Inc., Premium Imports, Inc. d/b/a La Flor Dominicana, My Father Cigars, and Cigar Rights of America. A copy of that brief can be found here.
On September 20th, I posted an article criticizing the trade groups for the lack of early notice on this issue, which was met with much disappointment from said groups however many manufacturers reached out to voice their support on this in what they called an accurate statement. Regardless, I am happy that the PCA and CRA are taking this to the next level and continuing a fight. From what I gather, the CAA is the least resistant to these measures considering the make up of some of the members of that group. Now this is just an opinion, not just of me but many I have spoken to, that some of the largest companies stand to gain from this measure, even if many others will suffer from it.
California’s Attorney General is claiming that, if premium cigar manufacturers do not submit a voluminous application for every size, shape, and blend of premium cigar by October 9, 2025, those cigars will need to be pulled off the shelves of retailers. In doing so, the Attorney General is attempting to establish himself as a second Food and Drug Administration, in violation of numerous federal and state constitutional and statutory provisions. Given the corruption happening in California in recent memory this isn’t a shock to be honest, but we as an industry need to stay on top of these communist like practices from states looking to hurt businesses.
“The California UTL is a classic example of a regulatory burden that hurts small businesses, including PCA retail and manufacturer members, and is especially harmful to boutique companies and brands that offer brick and mortar shop exclusives or limited editions. PCA is proud to join in this lawsuit to take a stand at the state level in California, just like we did at the federal level, once again protecting our members through the courts,” says Joshua Habursky, Chief Executive Officer of the Premium Cigar Association.
Glynn Loope, PCA’s Director of State Advocacy, added, “For almost a year, PCA and industry allies have been trying to convey their concerns and recommendations to the office of the California Attorney General, with hope for a reasonable approach to any regulatory plan. The effort included filing a public comment that included common sense recommendations for regulatory reform, and that comment was ignored. PCA also filed a request for extension so that our manufacturer partners could have ample time to properly file and comply, and that request was denied. That chain of events obviously brings us to this point in hope of seeking relief from these overly burdensome regulations. These regulations set a horrible precedent that must be challenged at every level.”
From the outset, the PCA, the CRA and their manufacturer allies have opposed these regulations, arguing that they unfairly penalize the premium cigar industry. On numerous occasions, the PCA asked the California Attorney General’s Office for sensible changes to administering this regulation, and ultimately, those requests were either denied or ignored. The UTL was intended to address flavored products and youth use; however, the proposed rules would saddle premium cigar manufacturers with excessive fees and paperwork, potentially leading to market consolidation and the exit of key products and companies from the California market.
Despite recognition in the courts and by FDA that premium cigars are not flavored products, the Attorney General’s office is forcing thousands of legitimate cigars to prove otherwise through an arbitrary $12 wholesale price threshold. This needless requirement ignores established definitions and inflicts financial harm on a market segment wholly unrelated to the problem AB 3218 was designed to address.
On Wednesday night, Pete Johnson who owns Tatuaje Cigars and is a member of the Garcia family through his marriage to his wife Janny, expressed concern on The Smokin Tabacco Show about the deadlines saying that there are many stores in California that will feel the full weight of defeat by this. Johnson expressed that there are stores with years and years of old inventory that some might consider as a museum to a vast collection of products from over the years and argues, “what happens to all those products? There is no grandfathering?”.
October 9th is the deadline to file applications with the Attorney Generals office through the compliance process. However, the actual date where a product that is not on the list could become illegal for sale is January 1st, 2026. Johnson argued that some stores like this are at risk of possible confiscation of items that are still on shelves by the October 9th deadline based on his previous experiences working in retail in California. As it was explained to me as an example, if Tatuaje wants to make sure that California makes a design on lets say Tatuaje Brown Label, all of the SKU’s for those cigars would have to be filed by October 9th to guarantee a decision by January 1. But, I don’t think that October 9th is an end all be all – applications could be filed after that date but might not be guaranteed by January 1 and therefor could create a legal/illegal limbo until a decision is made if not approved by January 1.
The other issue here is like most things, if we don’t get out in front and stop this from continuing, my guess is other states that are similar to California will follow suit and push to have the same or similar policies put in place. Now, California is just one state but it is a big state with plenty of retailers. Imagine if 13/50 states had this policy in place. Plenty of manufactures such as Dunbarton Tobacco & Trust have stated they will cease selling to stores in California because they simply can’t justify the costs and aggravations that it will take just to maybe get approved by the state and to be honest, I don’t blame them because this is a highway robbery. Imagine a place where brands like DTT and more aren’t available in a portion of the United States due to laws like this? With Halloween approaching us quickly, that is the real horror movie.
Rocky Patel, President and CEO of Rocky Patel Premium Cigars and CRA Board Member said upon today’s filing, “California’s regulations are arbitrary and capricious, usurious in practice, and serve as a de facto prohibition that slashes product availability, imposes outrageous compliance costs, and unfairly punishes good actors in the premium cigar industry. Instead of taking the time to understand this cottage industry and craft a practical solution, the Attorney General’s office chose a path that violates due process and fair business practices.”
“CRA and Oliva Cigar Company are committed to protecting premium cigars wherever that road leads us,” said Cory Bappert, CEO of Oliva Cigar Company and CRA Vice-President. “We look forward to our day in court to challenge the unfair burden put on our industry by the state of California. To our California clients we hear you and help is on the way.”
