Emergency Regulations Under AB 3218 Threaten Access to Premium Cigars in California

Yesterday, the California Attorney General’s Office released an emergency rulemaking package to implement Assembly Bill 3218, which mandates the creation of an Unflavored Tobacco List (UTL)—a state-maintained registry of tobacco products deemed “unflavored” and therefore permitted for sale in California. Under this framework, any product not appearing on the list will be presumed to be a ‘flavored’ tobacco product and not allowed for sale in the state.

While AB 3218 specifically exempts premium cigars, it does so only for products that meet the following definition: a premium cigar is a product that is handmade, not machine-made, and has a wrapper made entirely from whole tobacco leaf. It must sell wholesale for at least $12, and it cannot have a filter, tip, or non-tobacco mouthpiece. The cigar must also be hand-capped to qualify. This definition, which has long been objected to, effectively nullifies an exemption for most premium products sold in the state as their wholesale cost is below $12.

This emergency rulemaking continues a troubling pattern in California, where last-minute legislative maneuvers and emergency regulatory processes are used to force through policies without adequate deliberation or stakeholder input. From the outset, the development of the UTL has not taken into account the unique usage patterns of premium hand rolled cigars and their lack of mortality, morbidity, and youth usage concerns that other tobacco products possess. AB 3218 was introduced under the premise of being narrowly tailored, with no registration fees and limited impact on premium cigars. However, in the final stages of the legislative process, the bill was hastily amended to impose onerous fees and broaden its regulatory scope. These last-minute changes introduced costly compliance obligations that will impose significant fiscal burdens on manufacturers and small businesses across the industry.

As part of this proposal, the Attorney General’s Office has introduced a fee structure for manufacturers seeking inclusion on the UTL: a $300 initial application fee per Brand Style, $150 per Variant, and a $150 annual renewal fee for each listing, regardless of whether it was submitted as a Product Form or Variant Form. For the purposes of this regulation, an example of a Brand Style would be one of a company’s single core brand markings, while the Variants would include the various denomination counts and packaging formats associated with those products. 

While these fees are intended to cover administrative costs associated with reviewing applications and maintaining the database, they are based on internal estimates that—based on our review—significantly miscalculate the size and complexity of the premium cigar market. Under the Brand Style and Variant model, the premium cigar industry includes thousands of unique products. A single Brand Style, may result in dozens or more Variants when accounting for differences in shape and packaging. Applied across the industry, this regulatory structure would require tens of thousands of individual product submissions, imposing a substantial financial and administrative burden on manufacturers.

Cigar Rights of America has met repeatedly with officials in the Attorney General’s Office to convey the scope of the premium cigar industry and the real-world impact this regulation would have on small manufacturers, retailers, and adult consumers. There has been success in significantly reducing the fee structure from the potential of $1000 per brand style assessment the first year, however, the current status remains unacceptable as it would bring tremendous filing burdens, excessive fees, and undue harm to the industry.

Now, the Attorney General’s Office is compounding the problem by invoking emergency rulemaking authority, claiming the immediate need for the “preservation of the public health, safety, and welfare” to fast-track these regulations with minimal public input. The justification for this action has not demonstrated an urgent threat to public health, safety, peace, or welfare, nor has it been supported by specific, concrete evidence—as required—rather than general or speculative claims. Stakeholders are being granted just five days to respond, and the California Department of Justice has reserved the right to reply to comments at its discretion, effectively shielding itself from meaningful scrutiny.

While CRA applauds the efforts of public policy health agencies to curb youth usage, access, and initiation, this emergency action by the state is a regulatory overreach disguised as urgency. California faces many legitimate challenges, but premium cigars are not one of them. The continued fixation on this segment of the market reflects a fundamental disconnect between the state’s policymaking apparatus and the realities of adult-use of premium cigars. 

CRA will be filing a formal comment in opposition to the emergency regulation and is actively exploring all available avenues to challenge this unjustified and unnecessary action.