Drew Newman's Testimony on Friday, April 5, 2019

[TommyBB]

Drew Newman of J.C. Newman testified on Friday April 5, 2019, before Senator Marco Rubio's Senate committee on small business held in Ybor City, Florida.

Here is a link from David Garafolo's Cigar Authority

Premium cigars are just 3% of the cigar industry and just one half of one percent of the tobacco industry as a whole. We are a tiny sliver of the tobacco world.

We are deeply concerned that FDA is regulating our small industry out of business by treating our handcrafted, premium cigars like a scientific product and creating standards that are impossible for us to meet.

In 2016, FDA adopted a “one size fits all” policy for tobacco and applied the massive and costly regulatory scheme developed for cigarettes to handcrafted, premium cigars. This approach simply does not work for several reasons:

To create a new cigar, FDA requires it to be “substantially equivalent” to one sold in 12 years ago in 2007. This process is so exhaustive that it is expected to cost $250,000 for a single new cigar. Moreover, the concept of “substantial equivalency” does not work because no two premium cigars are alike, and they change over time. A cigar rolled in 2007 tastes different today than it did a decade ago.

FDA is requiring that we redesign our packaging to apply massive new warning labels.

FDA is requiring us to test every type of cigar. Not only are there are no standards for testing premium cigars, but costs ($18,000 per size) are enormous. This is particularly a problem since premium cigars are often made in small batches like craft beer.

We are paying thousands of dollars in user fees per day so that FDA can regulate us.

According to current estimates, it will cost approximately $30 million for our historic Tampa cigar factory to comply with FDA regulation. This is why FDA estimated that regulation would force as much as 50% of the cigar industry out of business.

Unlike “Big Tobacco,” the premium cigar industry is made up almost entirely of small, family businesses like ours. We sell our premium cigars to 3,000 specialty retailers across the country. These are mom-and-pop, small family businesses with just a handful of employees. Our boutique premium cigar industry simply cannot absorb these massive regulatory costs.
In 2009, Congress gave FDA authority to regulate tobacco products to address (a) youth usage and (b) addictiveness. However, FDA’s own research has shown that (a) children do not smoke premium cigars and (b) the typical consumer smokes 1.7 premium cigars per month, a frequency that is not consistent with addiction. Premium cigars are an old-world, handmade craft enjoyed by adults infrequently for relaxation and celebration.