In what was a blow to the cigar industry, the language that would have exempted premium cigars from U.S. Food and Drug Administration (FDA) regulation was not included in the Omnibus Spending Bill. In addition, language that would have shifted the proposed grandfather date for cigars subject to regulation was not included.  What this means, is the cigar industry now must play the waiting game and see what the Office of Management and Budget (OMB) comes back with in terms of the regulations proposed by the FDA.

A glimmer of hope for the cigar industry emerged last week when there was talk of including language to exempt premium cigars in the proposed Omnibus Spending Bill.  This bill determines what Federal programs will receive funding. With the U.S. Food and Drug Administration (FDA) pushing for regulations of premium cigars, it would require such funding.  The cigar industry was hoping this exemption would make it to the final bill, or at least shift the grandfather date. Both did not happen.

While several industry sources told Cigar Coop it was a stretch this language would make it in, there was still a feeling of optimism that the proposed bill would go favorably toward the premium cigar industry. The cigar industry mobilized a phone-in campaign to call the offices House Speaker Paul Ryan, House Majority Leader Kevin McCarthy, and Senate Majority Leader Mitch McConnell to include the language. Reports of the large amount of feedback these offices received from the cigar industry helped contribution to the optimism.

The proposed language in the Spending Bill called for funds to be derived from Tobacco User fees – which could be a reason why the language ended up being excluded.

This means that the current process continues. At this point, the FDA has delivered a set of proposed regulations to the Office of Management and Budget (OMB), who now must review and can provide further feedback on what was proposed.

Contrary to rumors several weeks ago, there is not an additional 30 day public comment period for the proposed regulations.

International Premium Cigar and Pipe Retailer (IPCPR) CEO Mark Pursell issued the following statement following the news the exemption and predicate date was not included in the bill:

“Though an FDA exemption and predicate date change were not included in the Omnibus Appropriations bill, the IPCPR remains committed to continuing our legislative and regulatory fight for the premium cigar industry and small business retailers we represent. IPCPR supported both issues throughout the process and met often with legislators to urge support and passage. Any report to the contrary is false. Heavy lobbying by anti-tobacco health groups, a group of Senate Democrats, and the desire to regulate new products caused Congressional leaders to remove both provisions that would have protected over 35,000 domestic jobs in the premium cigar sector. IPCPR members will be called upon to advocate on behalf of legislation that exempts premium cigars. That is the lasting solution to any future misguided regulation.“

The full text Omnibus Budget appears here.  A summary appears here.

Updated 12/17/15: Included statement from Mark Pursell