OCTOBER 2008

About Us taxes, overly restrictive smok- Oliva/NUB , Padilla Ci- In This Issue: ing bans, sales restric- gars, Padron Cigars, PROCI- igar Rights of America tions, and FDA regulation GAR, Prometheus, Rocky WILL CIGARS Cwas formed in April 2008 of cigars. Patel Cigars, Tabacalera Per- BECOME A PART to meet the demand of cigar The organization receives domo, Tatuaje Cigars, OF THE FDA lovers across the United funding through membership Thompson Cigar Co., Torano States for a voice in the de- dues, revenues from events Cigars, and Xikar. REGULATORY bate over cigar rights for those and from sponsors. As of Oc- For more information, or to SCHEME? who enjoy cigars for pleasure tober 2008, sponsors include join, please visit www.Cigar- and not because of any addic- Arturo Fuente Cigars, Ashton Rights.org. Comments or tion to, or dependence on Cigars, Camacho Cigars, questions may be emailed to WHAT IS nicotine. CAO Cigars, Casa Fernandes [email protected], faxed to IN THE NEWS? CRA is a membership or- Cigar, Corona Cigar Co., (818) 541-6865 or mailed to ganization dedicated to main- Davidoff/AVO Cigars, Dia- Cigar Rights of America, 2222 taining the personal freedom mond Crown Cigars, Don Foothill Boulevard, Suite THE 2008 of individuals to enjoy cigars. Pepin Garcia Cigars, Drew E122, La Canada Flintridge, Its activities are focused on Estate/Acid Cigars, Fonseca California 91011. STATE CIGAR education about handmade Cigars, General Cigar Co., TAX RATES premium cigars, opposing un- God of Fire Cigars, Graycliff fair legislation such as exces- Cigars, Humidipak, La Aurora sive state and federal cigar Cigars, La Flor Dominicana, CIGARS PART OF THE FDA REGULATORY SCHEME Have no doubt, the bill now in Congress to use the U.S. Food and Drug Administration as an oversight agency for tobacco products includes cigars.

lthough the bill talks about “tobacco products” to incor- tobacco and the sealing gum (usually gum tragacanth, a natu- Aporate all types of tobacco – cigarettes, cigars and pipe ral product) used to hold the cap together. In better machine- tobacco – the primary focus is on cigarettes and on trying to made cigars, the ingredients are generally short-filler tobacco keep younger people from smoking. In sec. 901 (b), the bill with the wrapper made of natural leaf or homogenized tobacco states that “This chapter shall apply to all cigarettes, ciga- leaf (HTL), a paper-like substance thatʼs made from the scrap rette tobacco, roll-your-own tobacco, and smokeless tobacco tobacco, including leaf stems. and to any other tobacco products that the Secretary by reg- (2) BE SUBJECT TO REGULATIONS prescribing “good ulation deems to be the subject of this chapter (emphasis manufacturing practices” that specify how cigars should be added). That means an empowered FDA and a spirited di- made, packed and stored. This potentially onerous regula- rector could turn the screws to cigar makers. tion at least notes that historical manufacturing practices be The bill as passed by the House of Representatives (H.R. taken into account and the financial resources of the makers 1108) by a veto-proof 326-102 margin on July 30, 2008 runs al- be referred to when making any requirements. It would be a most 100 pages in length and while aimed at cigarettes and terrible thing, indeed, for small cigar makers to be eliminated smokeless tobacco products, there is plenty for cigar smokers as family cigar operations have been the lifeblood of new to get edgy about. If the FDA did extend the billʼs requirements concepts in the industry for more than 100 years. to cigars, manufacturers would be required to: (3) USE TOBACCO, especially foreign-grown, that (under sec. (1) DETAIL OUT ALL INGREDIENTS in their cigars, which for 907 (a)(1)(b)) “was grown or processed using a pesticide chem- the premium market wouldnʼt be that difficult: generally, itʼs the ical that is not approved under applicable Federal law for use

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in domestic tobacco farming and processing . . .” This could be In addition to these impacts on the makers and distributors of a problem for some leaf growers in Central American countries cigars, the bill also includes some troubling provisions for others. who may be using chemicals not currently approved in the U.S.. In section 906 (d)(1), the bill gives the FDA an opportunity to (4) POTENTIALLY HAVE TO CONTROL THE NICOTINE con- “require restrictions on the sale and distribution of a tobacco tent of cigars, reduce or eliminate other “harmful components” product, including restrictions on the access to, and the adver- of their products. tising and promotion of, the tobacco product, if the Secretary (5) SUBMIT NEW PRODUCTS AHEAD OF TIME in a process determines that such regulation would be appropriate for the which could take up to six months (180 days) for approval or protection of the public health.” This is amplified in sec. 906 denial, similar to the process used for drugs in the U.S. (d)(4), which directs the issuance of regulations “to address the (6) PAY FEES TO THE FDA to support its activities involved in promotion and marketing of tobacco products that are sold or tobacco control. The amount to be paid (and no doubt passed distributed through means other than a direct, face-to-face ex- on to the consumer) would be based on a formula used in the change between a retailer and a consumer in order to protect 2004 bill for the termination of the tobacco quota; cigar makers individuals who have not attained the minimum age established were charged with 2.783% of the total amount of that fee, based by applicable law for the purchase of such products.” In effect, on their share of the gross domestic sales total. This fee does who could sell cigars and how they are sold could be dictated not apply, however, unless the “class of tobacco products” being by the FDA and all mail-order or Internet sales of cigars could taxed is actually under FDA oversight; all cigars are lumped into be abolished. the same category. The one helpful section is 907 (d)(3) (A), in which “banning all cigarettes, all smokeless tobacco products, all little cigars, all cigars other than little cigars, all pipe tobacco, or all roll- In The News your-own tobacco products, or (B) requiring the reduction of nicotine yields of a tobacco product to zero” is not permitted You will find news on legislative issues and anti-smoking under the Act. Congress reserved to itself the ability to ban to- movements affecting your personal freedom and rights bacco products. to enjoy cigars. Get involved, learn about the Issues and In June, the International Premium Cigar & Pipe Retailers As- take action! See the stories to these headlines and more sociation (IPCPR) circulated a note to the trade which stated that at www.cigarrights.org/news.htm: “As we have previously stated and discussed, cigarettes, RYO tobacco, and smokeless tobacco would be regulated immedi- LOS ANGELES SMOKING BAN: CRA ately when FDA legislation is enacted; not cigars nor pipe to- delegates attend round table meeting. bacco. Once the legislation is enacted, then the process of the BOSTON SMOKING BAN: City's Director of FDA getting geared up to regulate - and the initial, exclusive Public Health doesn't want "anybody to smoke" focus on cigarettes, RYO tobacco and smokeless tobacco - are DUTCH BAR OWNERS BANDING TOGETHER likely to occupy the agency for two or three years minimum. AGAINST SMOKING BAN “We do not foresee cigars and pipe tobacco being added to the legislation as Sen. [Edward] Kennedy and [Rep. Henry] ATLANTIC CITY MAY DELAY SMOKING BAN BY A YEAR Waxman will strongly resist any revisions or changes made in the legislation because such changes may undercut the pri- SAN FRANCISCO PHARMACY SALES BAN mary purpose of giving the FDA ʻfullʼ jurisdiction over tobacco DECISION COMING products. Even though the current bill is poorly drafted, the FDA OVERSIGHT LEGISLATION EXPECTED limited changes made to it so far have been adopted in the TO PASS IN 2009 face of considerable resistance.” ANTI-SMOKING GROUP ASKING FOR MORE So the cigar trade is taking a pass on this bill, which will pass TAXES ON TOBACCO the U.S. Senate, but may be subject to a filibuster first, and a INDIA TRIES SMOKING BAN AGAIN likely veto from President George W. Bush. There are more than GENEVA SMOKING BAN MAY BE DELAYED enough votes to override such a veto in the House, but itʼs not UNTIL 2011 clear whether 60 votes can be obtained in the Senate. Although cigars are not in the crosshairs of this bill, they are ILLINOIS SMOKING BAN UNENFORCEABLE IN COURT? in range. One wonders, if this bill passes, what an activist President or FDA chief might do. It wonʼt be helpful to those COLLEGE SYSTEM who enjoy tobacco in its most natural forms, as cigars or in CHANCELLOR HEARS BAN COMPLAINTS pipes, just like the Taino Indians who met Rodrigo de Jerez and Luis Torres in 1492.

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2008 STATE CIGAR TAX RATES (per the Federation of Tax Administrators Web site)

ALABAMA 4.0¢ per cigar NEBRASKA 20% of the wholesale price

ALASKA 75% of the wholesale price 30% of the wholesale price

ARIZONA 13.0-44.1¢ per cigar NEW HAMPSHIRE 19% of the wholesale price

ARKANSAS 32% of the manufacturerʼs price NEW JERSEY 30% of the wholesale price

CALIFORNIA 45.13% of the wholesale price NEW MEXICO 25% of the product value

COLORADO 40% of the manufacturerʼs price NEW YORK 37% of the wholesale price

CONNECTICUT 20% of the wholesale price NORTH CAROLINA 3% of the wholesale price

DELAWARE 15% of the wholesale price NORTH DAKOTA 28% of the wholesale price

FLORIDA No tax OHIO 17% of the wholesale price

GEORGIA 23% of the wholesale price OKLAHOMA 12-36¢ per cigar

HAWAII 40% of the wholesale price OREGON 65% of the wholesale price (cap of 50¢ per cigar)

IDAHO 40% of the wholesale price PENNSYLVANIA No tax

ILLINOIS 18% of the wholesale price RHODE ISLAND 40% of the wholesale price (cap of 50¢ per cigar)

INDIANA 24% of the wholesale price SOUTH CAROLINA 5% of the manufacturerʼs price

IOWA 50% of the wholesale price (50¢ per cigar cap) SOUTH DAKOTA 35% of the wholesale price

KANSAS 10% of the wholesale price TENNESSEE 6.6% of the wholesale price

KENTUCKY 7.5% of the wholesale price TEXAS 1.0¢ per cigar

LOUISIANA 8-20% of the manufacturerʼs price UTAH 35% of the manufacturerʼs price

MAINE 20% of the wholesale price VERMONT 41% of the manufacturerʼs price

MARYLAND 15% of the wholesale price VIRGINIA 10% of the wholesale price

MASSACHUSETTS 30% of the wholesale price WASHINGTON 75% of the wholesale price (cap of 50¢ per cigar)

MICHIGAN 32% of the wholesale price WASHINGTON, D.C. 12% of gross receipts

MINNESOTA 70% of the wholesale price WEST VIRGINIA 7% of the wholesale price

MISSISSIPPI 15% of the wholesale price WISCONSIN 50% of the wholesale price (cap of 50¢ per cigar)

MISSOURI 10% of the wholesale price WYOMING 20% of the wholesale price

MONTANA 50% of the wholesale price

We Need You! CigarRights.org is a membership organization and we need your help and the help of your friends. Memberships are available for one year ($30), two years ($55), three years ($80), four years ($105) and lifetime ($500). You can join on-line at CigarRights.org, but please note: although Cigars Rights of America is a non-profit organization, contributions, gifts or membership dues are not refundable or transferable and are not deductible as contributions to a tax-exempt organization for Federal income tax purposes. Cigar Rights of America neither solicits or accepts membership from any person under 18 years. Thank you.

3 WWW.CIGARRIGHTS.ORG OCTOBER 2008 ISSUE 1, VOLUME 1 CRA MOMENTS

hare your special moments with fellow cigar enthusiasts. SEmail us your photograph for CRA Moments to:

[email protected]

hank you for sharing your CRA Moments with your fel- Tlow CRA members.

Jeff, Tyler and Rob enjoy a smoke.

This was the last great cigar smoking event held in Chicago on December 30th, 2007 — 2 days before the "illegal" laws of the State of Illinois infringed on all of us. The place was Gibson's Steakhouse in their elegant “State Room.”

I've attached a picture of me (Bobby Thompson) enjoying a nice cigar at Jost Van Dyke, BVI!

Trying to catch dinner.

DeeDee Engels from Cigar Grotto, Inc.

4 WWW.CIGARRIGHTS.ORG ISSUE 1, VOLUME 1 TELL US WHAT YOU THINK We asked for it. We got it. CRA members give us their opinions and suggestions.

Darren Barr writes: Dear Cigar Rights: My opinion on SCHIP is that I think it is a good program for low income families that need the coverage. I am strongly against using tobacco tax to fund this program. It is a bad idea. The number of smokers is declining because of in- creases already in taxes and places you can smoke. My self example I enjoy ci- gars very much. But with limited places I can smoke I only smoke a couple of times a week. The SCHIP should be an option to purchase for private insurance compa- nies. The private insurance companies can set up a fund for low income families. If a family can't afford the SCHIP from pri- vate insurance companies than set up dif- ferent charities where someone can ======Alcohol is more accepted for two primary contribute to a SCHIP fund. Using to- William Rudowitz writes: reasons: 1) many of the influential people bacco taxes for this is a bad idea. How- in our society drink "sociably" and they I wonder why government focuses on ever SCHIP is not a bad idea used for the see it as an appropriate way to engage in smoking. I do not like cigarette smoke, at right reasons. interaction at events and 2) they tried all, yet I understand that people want to Respectfully, once with prohibition and failed so the smoke. I am glad that there is no smoking government is afraid to try anything again. Darren Barr in public buildings, restaurants, theaters, August 26, 2008 the workplace, etc. However, to begin to I am willing to do all that I can to pre- ======ban smoking in homes, cars and other vent the ridiculous taxes that have been proposed and to limit the restric- Hob Cunningham writes: private places in an absolute infringement on our rights as citizens. Why is there no tions placed on smokers. This country was established on the rights focus on alcohol? Why not tax the drink William Rudowitz of the individual to own property. I am more and prohibit drinking in public August 19, 2008 against ANYTHING that interferes with places, similar to smoking? I wonder if might right to do whatever I want with anyone recognizes that my property. That includes what color I alcohol-related deaths far am "allowed" to paint my house or and away outnumber whether I am "allowed" to smoke a cigar smoking-related deaths. in my house or on my property. Combining deaths that Heard Cigar Dave speak on this many occur from liver disease, times, and when they announced the or- heart disease caused by ganization today, I joined immediately. I drinking, accidents that am also a member of the NRA. I like a occur while persons are good steak with a very good single malt under the influence, vio- scotch. I am behind you 100%. lence that occurs when Hob Cunningham people are under the in- Windcrest, Texas. fluence and all other alco- hol associated illnesses. August 23, 2008

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Tell Us What You Think continues. in our prisons back to their countries of a new no-cigar policy on the Valor. If cus- ======origin and the bill would be paid in full. tomer complaints aren't too high, they William Rudowitz writes: Take all of the money our various layers plan to enforce the new policy on their en- of government pay to have programs and tire fleet. I attended the first Freedom Tour event in products translated to languages other Manhattan the other evening and en- Cigar smoking is still allowed on open then English and the bill would be paid gaged in some good discussion around decks (starboard side only), but not in any in full. the smoking ban and tax related issues. bar or lounge or casino...not even the The more I think about the taxation story, Finally, stop wasting so much time trying Winston Cigar Bar. I thought this was ex- the more frustrated I get with the politi- to take away the rights of smokers of fine tremely disappointing, not to mention a cians in this country. The concept of tax- cigars, who aren't hurting anyone and tad dishonest. If I had known about the ing to provide health insurance for aren't asking for anything and I'll bet they new policy, I probably would have sailed children is not necessarily, in and of itself, could find a way to do all of the above and with another cruise line.... Smoking cigars a bad thing. However, the plan as it is laid not only pay for SCHIP but also pay for on the open deck proved to be a not-so- out is ridiculous. The current plan would the continuation of Social Security pen- good alternative. 1) It was windy, and 2) it put an end to the cigar industry as we sions, fund research for alternative en- was difficult to enjoy conversation with know it and would therefore not raise any ergy sources and fix our infrastructure. friends, since the open deck movie the- taxes and not be able to fund any health You know why they don't do any of those ater was playing every night. (I don't fancy insurance or other cause. Then I look at things? It's because they would have to having to watch Bee Movie with my cigar how much money our government spend have guts to do it and attacking the small and cognac.) son the health and well being of illegal number of us smokers of fine cigars Other than this one issue, the rest of the aliens and I am forced to wonder, if the is easy. cruise was great fun. government would stop spending all that August 21, 2008 Thanks, money on healthcare for illegals and ======David Justice would take that money and spend it on healthcare for children, I am almost 100% David Justice writes: August 18, 2008 certain that the bill would be paid in full. Just thought someone should know about ======Also, what about the Social Security and this. I found it on a cigar forum board. It Brandon Schleeter writes: Welfare payments that are made to rela- was posted on 8/4/08. You asked for opinions, here is mine—as tives of immigrants who come here solely I booked a 7-day Caribbean cruise concise as I can articulate. There are few aboard the Car- of us cigar "aficionados" who disagree nival Valor with funding children and supporting pro- cruise ship out grams that assist children. This is espe- of Miami, Fla. cially true of health care for children and last week. I the SCHIP bill. chose this ship, However, there are few (if any) other in- in large part, stances of private industry supporting un- because it ad- related programs like tobacco taxes vertised on Car- supports SCHIP. Each US citizen is re- nival's web site quired to pay taxes. I pay mine annually. a comfortable, Why is a solitary private industry fancy cigar bar being singled out to provide that fi- that featured nancial support? If you agree with nightly live jazz. SCHIP and the bill in its entirety, I ask only But my first that you think of this- obesity is a terrifi- night on the cally important and continually rising con- ship, as I was cern amongst children in the USA. Is it to take advantage of the good nature of about to clip my cigar, I was told by the acceptable to tax every fast food chain on our country and the loopholes in the sys- bartender that Winston's Cigar Lounge the sale of their hamburgers to finance tem? Close the loopholes and strengthen would no longer allow cigar smoking. children's health care coverage? the requirements to receive such pay- I complained to our cruise director and Brandon Schleeter ments, and the bill would be paid in full. learned that (starting last week), the Car- Now, send all of the illegal aliens who are nival corporate office had decided to test June 10 , 2008

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