Big Tobacco goes big in effort to quash law banning sales of flavored tobacco products

October 14, 2020

By Phil Matier

A coalition of big tobacco companies and small retailers is paying professional signature gatherers upward of $10 a name in an attempt to put the brakes on the statewide law barring brick-and-mortar stores from selling menthol cigarettes and other flavored tobacco products.

With the Nov. 30 deadline approaching for submitting signatures to qualify the measure for the 2022 ballot, the high-dollar effort has become an interesting blend of California politics and potentially huge business profits, with a dash of coronavirus shutdown tossed in for good measure.

At issue: SB793, authored by state Sen. Jerry Hill, D-San Mateo, and signed into law by Gov. Gavin Newsom in August. Stores that break the ban on selling flavored tobacco and ecigarettes would face a $250 fine per violation.

Tobacco interests wasted no time filing the paperwork to put the law before voters in a referendum. They need 623,212 validated signatures to make the ballot. “The law goes too far and is unfair. Particularly since lawmakers exempted hookah, expensive cigars and flavored pipe tobacco,” said Beth Miller, spokeswoman for the California Coalition for Fairness, the group seeking to repeal the ban. “It will hurt small businesses and take jobs from licensed retailers who do sell tobacco products,” while still allowing for online sales, Miller said. “If the past is any indication, it will also lead to an underground market that could increase the access for minors.” Hill dismissed the pro-tobacco arguments as a smokescreen. “The goal is to keep kids from starting to smoke,” Hill said. “What 15-year-old is going to buy a $12.50 cigar or pipe tobacco? That’s ridiculous.” Hill said the coalition had another reason for launching the referendum — profit. If the referendum qualifies, the law, which is slated to go into effect in January, would be suspended until voters have their say in the November 2022 general election. And no matter what the outcome of the vote, the tobacco industry and retailers would get two more years of in-store sales until after the election. Getting the signatures of the required registered voters by the November deadline, however, is not coming cheap.

The Coalition for Fairness estimates that it will need about 900,000 signatures to ensure it has enough verified signatures to qualify for the ballot. Like most groups that place initiatives on the ballot, the Coalition for Fairness is using professional signature gatherers, those people you see carrying clipboards with petitions hawking various ballot measures outside of stores, farmers’ markets and other places people gather — or used to gather before the pandemic. But getting people to stop and sign a petition is not easy these days. And with a pressing deadline, the price per signature has gone from $3 to $4 to as high as $10 per name. Miller said she did not have the exact figure, but $10 a name was “a safe estimate.” That brings the estimated cost of just qualifying the measure to $9 million. Hill said the tobacco industry stands to “make a lot more than $9 million in the two years.” And it’s not like Big Tobacco is short on money.

According to the California secretary of state filings, the referendum drive already has a $14 million war chest courtesy of R.J. Reynolds, Philip Morris and their various affiliates. It’s not the first time an industry under threat by state lawmakers has used the referendum process to buy time and repeal a law. The plastics industry bought an extra two years with its attempt to overturn a ban on single-use plastic bags that the Legislature passed in 2014. In 2018, the state’s multibillion-dollar bail bond industry reacted to a state law to phase out the state’s cash bail system by qualifying Proposition 25, a referendum on the bail change that is on the November ballot. State Assemblyman Phil Ting said industry challenges are just one part of an initiative process that has gone wrong. “It’s unfortunate.

We originally designed a process to give ordinary citizens a say in our policymaking, but what I find is that only well-funded special interest groups have the millions of dollars you need to bring an initiative to the ballot,” he said. Hoover Institution research fellow Bill Whalen says it is all part of democracy — California style. “You basically have three choices: Go out and buy and trade lawmakers, go to court or take it to the ballot,” Whalen said. “You aren’t going to change legislators’ minds about tobacco and a court fight is long and uncertain. This is the only effective way to undo what the Legislature has done.” Or, at the very least, buy some time.

Lebron James, L.A. Lakers Celebrate NBA Championship with Cigars

October 12, 2020

By Chris Esposito - Cigar Aficionado

Ten years since their last NBA championship victory, the Los Angeles Lakers claimed the title yet again with Lebron James at the helm. The Lakers beat the Miami Heat 106–93 last night at the Disney Bubble in Orlando, Florida, leading them to win the seven-game series in six. And what better way to celebrate the team’s 17th championship than with a selection of premium cigars?

Cigars have long been the chosen vice for championship victors. Now with a delectable array of cigars, players like series MVP Lebron James have plenty to choose from. In their celebration of the ultimate trophy in basketball, the Lakers sparked up four different smokes, all made by Drew Estate: Liga Privada No. 9 Corona Viva (a toro that landed at number 10 in Cigar Aficionado’s 2015 Top 25), Herrera Esteli Habano Toro, Undercrown Shade Gran Toro and the new Liga Privada Year of the Rat.

It wasn’t Finals MVP Lebron James’ first cigar celebration either. James, who now has four championship rings and four Finals MVP awards to his name, confidently enjoyed a cigar during his post-game press conference and even as he was lying on the floor Facetiming his mom. The team leader put up an impressive 14 rebounds, 10 assists and 28 points in his 41 minutes on the court to close out the series. He was joined by others such as longtime teammate J.R. Smith who sparked up smokes of their own.

The victory comes nearly nine months after Laker legend Kobe Bryant, his daughter and seven others were tragically killed in a helicopter accident outside of Los Angeles. In the wake of this utmost tragedy, the Lakers win was the ultimate tribute to Bryant’s competitiveness and talent that earned him five trophies of his own while playing for the gold-and-purple.

As the G.O.A.T. (greatest of all time) debate continues regarding cigar lover Michael Jordan and Lebron James, it’s James and his teammates who got to celebrate this weekend.

URGENT: Understanding Senate Bill No. 793

September 3, 2020

Dear California Retailers,

Senate Bill No. 793 has passed and signed into law by Governor Newsom as of August 28, 2020.

Senate Bill No. 793 generally prohibits California tobacco retailers from selling "flavored tobacco products" and "tobacco product flavor enhancers."

Below is our interpretation of this bill. We would highly recommend seeking legal counsel if you have any questions or need clarification on the details of this bill.

  • What qualifies as a "flavored tobacco product"? A flavored tobacco product means any tobacco product that contains a constituent that imparts a characterizing flavor.
  • What qualifies as a "tobacco product flavor enhancer"? A tobacco product flavor enhancer means a product designed, manufactured, produced, marketed, or sold to produce a characterizing flavor when added to a tobacco product.
  • Which items will be banned for sale in California? All flavored tobacco products (except for items on the exemptions list) and tobacco product flavor enhancers will be banned in the state of California, including, but not limited to:
  • Flavored Cigarettes (including menthol, mint, etc.)
  • Flavored Snus (including menthol, mint, etc.)
  • Flavored Machine-Made Cigars (including Swisher Sweets, Backwoods, Black & Mild, etc.)
  • Flavored Chewing Tobacco
  • Flavored Vape Juice
  • Flavored E-Cigarettes
  • Flavored Snuff
  • Flavored RYO (roll-your-own) Cigarette Tobacco
  • Plus all other flavored products that meet the definition of a "tobacco product". (Section 10445"A product containing, made, or derived from tobacco or nicotine that is intended for human consumption, whether smoked, heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, including, but not limited to, cigarettes, cigars, little cigars, chewing tobacco, pipe tobacco, or snuff.")
  • Do any flavor exemptions apply? Yes, the new law does not apply to the following flavored tobacco products:
  • "Flavored Premium Cigars" (defined as any cigar that is handmade, that is not mass produced by use of mechanization, that has a wrapper that is made entirely from whole tobacco leaf, that has a wholesale price of no less than $12, that does not have a filter, tip, or non tobacco mouthpiece, and that is capped by hand);
  • "Flavored Loose Leaf Tobacco" (defined as, consists of cut or shredded pipe tobacco, usually sold in pouches, excluding any tobacco product which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes, including roll-your-own cigarettes); and
  • "Flavored Shisha Tobacco Products" (defined to include products intended for smoking in a hookah including those with constituents that imparts a distinguishable taste or aroma other than that of tobacco), provided the hookah retailer, among other things, does not permit entry to anyone under 21.
  • Can I still sell flavored premium cigars in my retail store? Yes, as long as it meets the definition of a "premium cigar" and has a minimum wholesale price of $12.
  • Do non-flavored premium cigars need to meet the $12 wholesale minimum? No, the definition of "premium cigars" only applies to flavored tobacco products for the purpose of this bill. You may continue to sell non-flavored premium cigars as usual.
  • I have a cigar lounge which allows smoking on-site, can a customer purchase a flavored premium cigar and consume the cigar on premises? Yes, as long as the cigar meets the definition of a premium cigar and has a minimum wholesale price of $12.
  • Can I still sell flavored pipe tobacco in my retail store? Yes, as long as it meets the definition of "loose leaf tobacco".
  • How does the new law penalize violations? The California tobacco retailer will be fined $250 for each violation.
  • When does this new law take effect? Currently, the new law is scheduled to take effect on January 1, 2021.


- California Association of Retail Tobacconists, Inc. 


Nat Sherman International Closing

August 3, 2020

By David Savona I Cigar Aficionado

Ninety years after it opened its doors for the first time, Nat Sherman is closing down. Nat Sherman International Inc., which has been owned by cigarette giant Altria Group Inc. since 2017, will cease operations by the end of September, shutting down not only its midtown Manhattan cigar store but also its entire wholesale business.

The decision comes several months after Altria began looking for a potential buyer for the cigar subsidiary; the company announced it was considering the sale of Nat Sherman International Inc. in October.

“We worked hard to successfully transition Nat Sherman International to a new home. The Covid-19 pandemic created new challenges that were unfortunately too big to overcome,” said Jessica Pierucki, general manager, managing director for Nat Sherman.

Premium cigars were never a part of the Altria story. While the company had cigars in its portfolio prior to the acquisition of Nat Sherman, it is a machine-made cigar operation (Black & Mild) that is far closer to its core cigarette business than to handmade cigars. Back in October, Pierucki told Cigar Aficionado: “While we recognize the strength and value of the premium cigar business, it’s not core to Altria’s tobacco portfolio.”

Altria is one of the largest tobacco concerns in the world, with annual revenues of $25 billion. It acquired Nat Sherman in January 2017, buying it from the Sherman family for undisclosed terms. Altria’s major interest in Nat Sherman was the company’s cigarette business, which began in the 1940s.

The Nat Sherman cigarette division, which Altria separated from the cigar division after the acquisition, will remain in business.

The Nat Sherman story dates back to 1930, when the first version of the store opened in Manhattan at 1400 Broadway. The current location, at 12 East 42nd Street, marks the fourth location of the shop.
Nat Sherman International has 24 employees. The cigar store (now known as the Townhouse) is not owned by the company, and is leased. All of the company’s cigars (such as Timeless) are made under contract, so the company does not own a cigar factory.
Before the sale to Altria, Nat Sherman had embarked on an ambitious rebranding of its cigar line, spearheaded by Michael Herklots, who is now vice president of Nat Sherman International. The new cigars earned several 90-point-and-higher scores, and made appearances on Cigar Aficionado’s Top 25.

“Leading what has become Nat Sherman International’s final chapter these last nine years has been the honor of a lifetime,” said Herklots. “Hopefully, our premium cigars will live on in the humidors of our greatest fans and be appreciated with fond memories for many years to come.”