A silver lining in the forthcoming budget fails to materialize as the House of Representatives has released a bill that has been referred to as omnibus and that the exemption for cigars was removed from that final proposal. While the bill moves before a vote of the House and Senate there still remains a slim chance that the language could miraculously find its way back into to bill.
It is believed that the language which was part of other funding within the bill and was removed when the Democrats led by Nancy Pelosi voiced displeasure over certain funding within the budget. As a result in order to please that party the funding in which the cigar exemption was part of the language was removed in the $1.1 trillion dollar budget.
The attention now falls to the Office of Management and Budget who has had the final recommendation from the FDA and a final ruling is expected to be made between Option 1 and Option 2.
Option 1 would change the way the cigar industry does business in which all brands to come to the market after 2/15/17 would become subject to approval. It has been estimated by some that it could cost as much as $250,000 to have a blend approved. This option would remove over 50% of the brands on the market from the shelves and would put an end to the limited edition market.
Option 2 would raise the price of premium cigars to a minimum of $10.00, have no flavors and consist of long filler tobacco to be exempted from FDA regulation. Brands like Duran Azan Burgundy which came out after 2007 and cost under $10.00 would have to apply for approval while the Duran Signature line would be exempt since it costs over $10.00.
The OMB is expected to make its ruling known in the New Year.
