It is easy to see why one-in-five small businesses list regulations as their biggest obstacle; just look at Tampa-based J.C. Newman Cigar Company.
At 116 years old, it is America’s oldest family-owned premium cigar maker. In 1895, J.C. Newman borrowed $50 and started a cigar company. At the time, he was an unemployed cigar maker eager to achieve the American Dream. He did just that, building a small business that withstood 19 recessions, three panics, two depressions, two world wars and the Cuban embargo. Newman Cigar Co. innovated and adapted to a changing world, and today employs 125 people.
Like many other premium cigar companies, Newman is successful because they manufacture quality products geared to an appropriate target audience – adults who typically smoke a cigar while relaxing with friends and family. They are not breaking any laws, asking for a special tax credit or trying to gain an advantage over their competitors; they just want to be able to make cigars the same way for another 116 years.
Unfortunately, forthcoming regulations from the Food and Drug Administration (FDA) could make that all but impossible by deeming premium cigars subject to regulation under the one-size-fits-all Tobacco Control Act. Before going any further, we need to understand the history and context of the Tobacco Control Act, which became law in 2009. It was, ostensibly, about two things: 1) cigarettes, smokeless tobacco and roll-your-own-tobacco; and, 2) keeping those products away from children.
Let’s work backwards.
The very first “finding” in The Tobacco Control Act set the tone: “The use of tobacco products by the Nation’s children is a pediatric disease of considerable proportions…” Much like the sponsors of the Tobacco Control Act, representatives from the FDA infer their priority is to make it harder for kids to get their hands on tobacco products. For a variety of reasons, premium cigars don’t typically fall into the hands of kids.
It is also worth looking at the words of the aforementioned lead sponsor, Congressman Henry Waxman (D-CA). He kicked off the closing debate by using the word “cigarette” five times in roughly five minutes, while never mentioning the word “cigar.” Throughout the debate, the word “cigar” was mentioned just a hand full of times, and usually to note its ABSENCE from the bill.