Give That Man a Cigar, but Quick Before the Regulations Kick In

 

Source: wsj.com

Tripp Mickle

Aug. 12, 2016

 

Making a luxury cigar takes time. The period from planting to puffing can span at least four years and about 400 people.

 

Seeds must be selected, plants grown, tobacco cured and leaves twisted by hand with an eye toward producing hourlong smokes, rich in flavors of pepper, cedar or dark chocolate.

 

Or that’s how it used to be.

 

Premium cigar makers, racing to pump out new brands before stricter rules took effect this week, have flooded the market with hundreds of new smokes, some a bit “green,” with rough labels-one exec put his daughters to work cutting out bands-and odd distribution schemes, to get into the marketplace under the wire.

 

This week’s rules from the Food and Drug Administration mean every new variation of a handmade cigar requires government approval before it can be sold, at a federally estimated cost of $1,400 to $3,600 for most cigars in a process that will take an unknown amount of time, according to the FDA.

 

“We had to get our track shoes on to get everything to launch,” said Jim Young, North American president of global premium cigar maker Davidoff.

 

Now the market is swimming in an estimated 1,500 types of new cigars, based on the showing at the International Premium Cigar & Pipe Retailers Association Annual Convention, the industry’s biggest of the year, in Las Vegas last month. That is nearly double the 800 unveiled a year ago, according to the cigar publication Halfwheel, the industry’s name for a bundle of cigars.

 

Like wine, a cigar’s flavor usually improves with age. So cigars are often kept in temperature controlled rooms for a month or more to let flavors meld. The rushed-out newcomers didn’t have that luxury.

 

Rocky Patel, whose Bonita Springs, Fla.-based company is known for producing elegant smokes, said the new rules turned his life into “a nightmare.” He worked 18-hour days developing about 45 new brands and added shifts until 1 a.m. at operations in Honduras and Nicaragua to sort and box new cigars.

 

Time constraints meant some of the cigars, which sell for $5 to $25, turned out “a little young,” Mr. Patel said, aged about 3 months rather than the 5 months he prefers.

 

Cigars are wrapped with decorative, logo-emblazoned rings, known as cigar bands. But a printing company, crushed by other cigar-related orders, couldn’t cut the half-inch, navy blue bands printed for one of the new Rocky Patel Premium Cigars.

 

Short on options, the company’s vice president of sales, David Bullock, recruited his two college-aged daughters to cut the paper bands. Courtney Bullock, who goes to Florida State University, and her sister, Caitlin, who just graduated, spent the last week of July meticulously cutting the tiny bands in front of a television.

 

Within a week, they clipped 1,500 cigar bands with kitchen scissors and a pair of blue-plastic scissors from Target while watching all seven seasons of “Parks and Recreation.”

 

“My hands still hurt,” the younger Ms. Bullock said.

 

Many cigars were produced in such small quantities they are called “phantom brands.” Charlie Minato, co-founder of Halfwheel, started calling them that after he said he discovered companies producing just a few boxes of 10 to 25 cigars each to distribute to friendly retailers-thereby meeting the requirement that a cigar be in the marketplace by the deadline. Retailers photographed boxes on shelves to help cigar makers build evidence.

 

“People have found creative ways to comply with the law,” Mr. Minato said.

 

Bill Paley’s company, La Palina Cigars in Washington, D.C., launched 40 new cigar lines in three months, about 10 times the average for a full year.

 

Each line needed a name. Mr. Paley-who said he does his best thinking while smoking a cigar in the hot tub of his McLean, Va., home-spent hours in a whirlpool punching potential names into an iPad, including Cruiser, Excelsior, Hog’s Leg and The Weathermen.

 

Many names were discarded. He couldn’t use Gringo for an American-made cigar because another company owned the trademark. Others worked, including: Airship, which features labels of blimps and zeppelins; Stud, which features a poker-card design; and Heroine, which features a poppy flower.

 

“It has a double entendre,” he said.

 

To come up with new cigars, Mr. Paley said he became a cigar archaeologist, unearthing and testing hundreds of cigars made over the years at a hand-rolling operation in Nicaragua. He puffed on 50-plus cigars a day to identify styles to release based on strength, flavor and appearance.

 

One cigar he selected was green-literally. In a style known as candela, it came wrapped in a leaf dried at high temperatures to preserve tobacco’s frog-like color. Mr. Paley thought it would be perfect to promote around St. Patrick’s Day and Christmas.

 

“It’s not what you’d call a good looking cigar, but it tasted fantastic,” he said of the new brand, called Fuego Verde.

 

To fill one rush order of labels, Jason Schenck, president of Action Label Co., loaded his car with 15 boxes and drove from Sanford, Fla., the location of his office, to Palm Shores, Fla., where his son had a basketball game.

 

In the parking lot outside a Catholic school gym, Mr. Schenk met an employee of Drew Estate cigars, a Miami-based purveyor of Nicaraguan smokes, and unloaded the goods. “People thought we were doing a drug deal,” Mr. Schenck said.

 

Eventually, the industry hopes to return to normal. Last month, it sued the FDA, arguing its rules impose new taxes on cigars and ignore Congress’s intent to allow the continued sale of cigars to adults.

 

The FDA declined to comment on the litigation. An FDA spokesman on Thursday said the department concluded that there was no reason to exclude premium cigars from its regulation because they have “serious negative health risks.”

 

Until the matter is resolved, members of the industry are marveling at the predicament that could face Cuban cigar makers. Habanos SA, which sells Cubans world-wide, has been hoping to return to the U.S. ever since diplomatic relations were restored last year. Even if the decades-old trade embargo with Cuba is lifted, which would take an act of Congress, the new regulations could prevent the famous, coveted cigars from being immediately sold in the U.S.

 

They too would have to undergo the same FDA approval process as any new cigar, an FDA spokesman said.

 

“It’s like, ‘Welcome to America. You just got regulated,’ ” said lobbyist Glynn Loope of the Cigar Rights of America.