December 3, 2016
Castro’s Dead! The impact of his death is still unclear. As is the impact of a Trump presidency on US/Cuban Relations. Cuban History is being made daily and is very fluid.
Do you want to travel to Cuba? Here is a link that is a good summary of the situation:
June 6, 2016
This is a lot of information, but we wanted to pass along the most recent updates. The Cigar industry is taking a drastic turn as of June 2016 as it will now be regulated by the FDA. Good news is Cuban Cigar Factory is a “Grandfathered” product. Here is what is going on with the industry:
Over the past year, one of the most common I’ve heard from many people is “When will see Cuban Cigars available the United States?” The answer to that question pretty much is dependent on when the Cuban Embargo will actually be lifted. However, this answer is now more complicated by the recent announcement of the U.S. Food and Drug Administration’s new regulations that affect premium cigars. In a nutshell, even if the green light were in place to sell Cuban cigars tomorrow, the fact now is that Cuban cigars cannot be sold right away.
What Needs to Happen to give Cuban Cigars the Green Light?
Lifting the Cuban Embargo can only be done through an Act of Congress and must be signed into law by the President. There is a House of Representatives Bill and a Senate Bill that have been positioned to lift the embargo. Like any other bills, these must make it to the House and Senate floor and pass with a vote. While President Obama has given every indication he would sign such legislation, given that there probably will be a new U.S. President in office by the time this bill, we do not know whether the next President will sign off on this.
Meanwhile, distribution must be setup in the United States for products coming out of Cuba. Potentially Imperial Tobacco, a parent company of Habanos and Altadis USA could be a distribution arm. There also exists the potential of other distribution arms for the U.S. market as well. However, at this time we really don’t have a feel for what (and when) distribution options will be available.
Selling Cuban Cigars in the U.S. Will Require FDA Approval (this is key!!)
Assuming the Embargo is lifted and there is distribution ready to go, not one single cigar being made in Cuba can be marketed without FDA approval.
As we have discussed there are three groups of cigar products covered under the FDA’s new regulations.
1.Products Introduced Prior to February 15, 2007: Products in this group are eligible to be grandfathered and exempt from regulation. (Cuban Cigar Factory, Inc. falls into this category – thank goodness!)
2.Products Currently on the Market Between February 15, 2007 and August 8th 2016: Products in this group will be given a two year grace period to apply for approval to be on the market by the FDA. There is an additional one year window where the FDA will review the application for approval.
3.Products Introduced After August 8th, 2016: Before these products can be introduced to the marketplace, they must submit an application and receive FDA approval.
Since there was not a commercially marketed Cuban cigar in the U.S. market, and because there has not been a U.S. Importer in place, nothing can be grandfathered under Group #1. In all likelihood, all Cuban Cigars will fall into Group #3 (products introduced after the regulations go in place). Group #2 is all but an impossibility because there is pretty much zero chance the embargo with Cuba gets lifted and proper distribution is put in place before August 8th. Group 3 products require pre-market approval which indicators are is the toughest process to navigate through.
What About President Obama’s Recent Trip to Cuba?
We do know that U.S. House Representative Kathy Castor [D-Florida] accompanied U.S. President Barack Obama on his March visit to Cuba. Castor is a key person as she is one of the original co-sponsors of H.R. 662, the bill that calls for a premium cigar exemption from FDA control. We have also be told that several of cigar rights advocates reached out to Congresswoman Castor and asked her to talk to Obama about the FDA regulation.
Whether that conversation happened, and what resulted from that conversation, we simply do not know. At this time, all we can infer is that this trip did not have a direct bearing on what the FDA’s decision to release the ruling as is.
What About Buying Cuban Cigars Overseas?
The purchase of buying cigars overseas is a customs issue and not an FDA issue. Right now it is illegal to still purchase cigars overseas that are Cubans. The only exception is one is allowed to bring $100.00 of Cuban cigars back from Cuba.
If the Embargo is lifted, one will most likely be allowed to buy Cuban cigars overseas. At this point, buying any cigar (Cuban or Non Cuban) overseas would not be regulated by the FDA as once again this is a customs issue. How this will be addressed from a legal standpoint could be an issue down the road