    [Senate Hearing 116-48]
    [From the U.S. Government Publishing Office]

                                                         S. Hrg. 116-48

                KEEPING SMALL, PREMIUM CIGAR BUSINESSES ROLLING

    =======================================================================

                                 FIELD HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                              AND ENTREPRENEURSHIP
                              UNITED STATES SENATE

                         ONE HUNDRED SIXTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 APRIL 5, 2019

                                   __________

        Printed for the Committee on Small Business and Entrepreneurship

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    36-840 PDF                  WASHINGTON : 2019

    --------------------------------------------------------------------------------------

                COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                         ONE HUNDRED SIXTEENTH CONGRESS

                                  ----------
                         MARCO RUBIO, Florida, Chairman
                  BENJAMIN L. CARDIN, Maryland, Ranking Member
    JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington
    RAND PAUL, Kentucky                  JEANNE SHAHEEN, New Hampshire
    TIM SCOTT, South Carolina            EDWARD J. MARKEY, Massachusetts
    JONI ERNST, Iowa                     CORY A. BOOKER, New Jersey
    JAMES M. INHOFE, Oklahoma            CHRISTOPHER A. COONS, Delaware
    TODD YOUNG, Indiana                  MAZIE K. HIRONO, Hawaii
    JOHN KENNEDY, Louisiana              TAMMY DUCKWORTH, Illinois
    MITT ROMNEY, Utah                    JACKY ROSEN, Nevada
    JOSH HAWLEY, Missouri
                 Michael A. Needham, Republican Staff Director
                     Sean Moore, Democratic Staff Director

                                C O N T E N T S

                                  ----------

                               Opening Statements

                                                                       Page

    Rubio, Hon. Marco, Chairman, a U.S. Senator from Florida.........     1
    Castor, Hon. Kathy, a U.S. Representative from Florida...........     3
    Bilirakis, Hon. Gus, a U.S. Representative from Florida..........     5

                                   Witnesses

    Maresca, Charles, Director of Interagency Affairs, Office of
      Advocacy, U.S. Small Business Administration...................     6
    Rodu, Dr. Brad, Endowed Chair, Tobacco Harm Reduction Research,
      University of Louisville.......................................    31
    Borysiewicz, Jeff, President and Founder, Corona Cigar Company...    44
    Newman, Drew, General Counsel and Great-Grandson of the Founder,
      J.C. Newman Cigar Company......................................    51

                              Alphabetical Listing

    Bilirakis, Hon. Gus
        Opening statement............................................     5
    Borysiewicz, Jeff
        Testimony....................................................    44
        Prepared statement...........................................    47
    The Boutique Cigar Association of America
        Letter dated April 3, 2019...................................   128
    Castor, Hon. Kathy
        Opening statement............................................     3
    Cigar Association of America
        Statement dated April 19, 2019...............................   132
    Cigar Rights of America
        Comments dated July 16, 2018.................................   390
        Comments dated July 25, 2018.................................   411
    Cigar Rights of America and State of Florida letters of support..   380
    Coalition of American Cigar Rollers and supporting documents
        Letter dated April 4, 2019...................................   412
    Drew Estate
        Statement dated April 19, 2019...............................   422
    International Premium Cigar and Pipe Retailers
        Statement dated April 5, 2019................................   436
    Maresca, Charles
        Testimony....................................................     6
        Prepared statement...........................................     9
    Newman, Drew
        Testimony....................................................    51
        Prepared statement...........................................    53
    Rocky Patel Premium Cigars
        Statement dated April 19, 2019...............................   438
        Addendum.....................................................   446
    Rodu, Dr. Brad
        Testimony....................................................    31
        Prepared statement...........................................    33
    Rubio, Hon. Marco
        Opening statement............................................     1

                KEEPING SMALL, PREMIUM CIGAR BUSINESSES ROLLING

                                  ----------

                             FRIDAY, APRIL 5, 2019

                          United States Senate,
                            Committee on Small Business
                                          and Entrepreneurship,
                                                             Tampa, FL.
        The Committee met, pursuant to notice, at 1:00 p.m., in the
    Performing Arts Building Auditorium, Hillsborough Community
    College, Ybor City Campus, 1411 East 11th Avenue, Hon. Marco
    Rubio, Chairman of the Committee, presiding.
        Present: Senator Rubio.
        Also present: Representatives Bilirakis and Castor.

    OPENING STATEMENT OF HON. MARCO RUBIO, CHAIRMAN, A U.S. SENATOR
                              FROM FLORIDA

        Chairman Rubio. I call this hearing to order.
        I want to thank our witnesses for being here to discuss an
    important and an historic industry for the State of Florida and
    for this part of our state.
        Before I do, I want to recognize Dr. Atwater, the President
    of Hillsborough Community College, and Dr. Ginger Clark, the
    Ybor campus president. They have been fine to work with, and we
    appreciate very much all the help they've given us in setting
    this up today.
        As the Chairman of this committee, I'm pleased to bring
    more awareness to this iconic industry and the regulatory
    assault that threatens it, and there really is no better
    location in this state to do it than here in Tampa, in this
    area known as Cigar City.
        Florida's premium cigar industry is one that is rooted in
    small, family-run businesses. These are businesses that have
    been handed down generation by generation, and many are
    representatives of the cultural history of the Cuban community
    that has made Florida their home way back, even before the
    current migration, going into the 1800s and in this very part
    of our state, near Ybor City.
        One such example of that is J.C. Newman Cigar Company
    represented by one of our witnesses, Drew Newman, the founder's
    great-grandson. The company is a fourth-generation business
    that has spanned an impressive 124 years. Unfortunately,
    manufacturers like J.C. Newman, retailers like Corona Cigars,
    and the rest of the premium cigar industry are under attack.
        A 2009 law, and a subsequent final rule by the previous
    administration, allowed the Food and Drug Administration to
    regulate the manufacture, import, packaging, labeling,
    advertisement, promotion, sale, and distribution of premium
    cigars, a move that was intended to protect children from
    cigarettes and other tobacco products.
        I fully support laws which prohibit minors from smoking and
    to prevent people from falling into that habit. But tobacco is
    a legal product, and small manufacturers and retailers of
    premium cigars are wrongfully being targeted when they were
    never supposed to be the target of this to begin with. It's
    simply not right for government to unfairly place detrimental
    fees and regulations on an entire industry simply because some
    do not like the product that they are manufacturing.
        It must also be noted that the rule, issued in 2016,
    encompassed tobacco products on the market since 2007, a full
    two years before the authorizing legislation became law. The
    regulatory cost of compliance would give preference to foreign-
    made products and destroy this American industry.
        For instance, J.C. Newman sells about $10 million worth of
    products every year. It would cost them approximately three
    times that amount just to comply with the proposed regulation.
    FDA has calculated that 90 percent of the businesses affected
    by this rule are considered to be small. But think about it, to
    comply with these regulations it would cost them three times
    what they make in any given year, and you don't need to be a
    business major to figure out pretty quickly you cannot survive
    when the cost of compliance is three times your annual revenue
    as a company.
        This over-regulation, it's not necessary. It's already
    illegal to sell tobacco products to anyone under the age of 18.
    In fact, the State of Florida is looking to raise that age in
    the legislature. First regular use is on average, 24-and-a-half
    years old. The FDA NIH research was unable to provide any data
    at all on youth that consumed traditional cigars frequently or
    daily. This is because, as they said, premium cigars are not
    made for children, they're not marketed to children, they're
    not consumed by children. So this begs the question of why
    premium cigars are wrongly being regulated under a law that's
    aimed to reduce youth consumption of tobacco if it is not a
    product that youth are consuming.
        So what can we do to stop this overreach? In Congress I
    have a bill, Senate Bill 9, the Traditional Cigar Manufacturing
    and Small Business Jobs Preservation Act, which would exempt
    just this industry from FDA regulations. This legislation,
    which I introduced on the first day of the Congress, would only
    apply to the premium cigar industry. It has the bipartisan
    support of 11 senators.
        I am pleased that I'm joined here today by my colleagues
    Congressman Castor and also Congressman Bilirakis, who led the
    House effort with 35 bipartisan co-sponsors. For each of the
    three fiscal years since 2016, when the final rule was
    finalized, the House of Representatives passed legislation
    exempting premium cigars from harmful FDA regulations through
    annual appropriations bills. Unfortunately, these provisions
    were dropped when the House and Senate went to conference, and
    it's unfortunate that it went in that direction, and we hope
    that we can change that moving forward.
        At the FDA, we must ensure that the next commissioner is
    well educated on the unique nature of the premium cigar
    industry. This is why this hearing is important. We are
    furthering the record that this industry is unlike the other
    regulated tobacco industries.
        We are committed--I know I am, and everyone up here is--to
    helping this iconic industry and will advocate on behalf of
    members of the Administration and with our colleagues in
    Congress, giving premium cigar makers and retailers the clarity
    and the assurances needed to continue with their craft as a top
    priority of ours. At a time in which both parties express
    concern for small businesses and manufacturers and the American
    working class, this is not an issue that should be
    controversial.
        I hope today's hearing will shed light on how proposed
    regulations from the FDA will impact this iconic industry, one
    that is so rooted in our state's history.
        On a personal note, I have often told the story of my
    grandfather, who grew up in Cuba. He was disabled as a young
    child because he had polio, one of 17 kids in a farming family.
    And because he couldn't work in the fields, this led him to go
    to school, where he learned how to read, and I would guess he
    was one of a few of the 17 who learned how to do so.
        And one of the jobs in town for people that knew how to
    read was a lectore, who would sit in the front of the room as
    cigars were being rolled in the days before radio and TV and
    Internet and Siri and all this other stuff, and read them the
    news, and then he would read novels. If you visit here, you'll
    see many of the historic cigar rolling rooms where you can
    envision where the lectore would have sat and would have read.
    So it's an industry that's near and dear to my heart for that
    reason as well, and I hope to make a difference for this
    industry, particularly here in our home state of Florida.
        I want to thank, as I said, my two colleagues from the
    House for being here, for their steadfast support, and I want
    to recognize Congresswoman Castor to go first. This is her
    district, and she is the sponsor of this bill in the House.
        Thank you so much for being here.

      STATEMENT OF HON. KATHY CASTOR, A U.S. REPRESENTATIVE FROM
                                FLORIDA

        Representative Castor. Good afternoon. Buenas tardes.
        Thank you, Chairman Rubio, for holding this hearing, and
    thank you for your leadership. I want everyone to know that
    Senator Rubio did have a Tampa Cuban sandwich before this
    hearing, and he gave the thumbs up on the bread, maybe the best
    in the state.
        Chairman Rubio. It is.
        [Laughter.]
        Representative Castor. Okay, it's on the record now. It's
    on the record.
        Chairman Rubio. There are no Miami TV stations here, are
    there?
        [Laughter.]
        Representative Castor. Well, thanks again for your
    leadership.
        As one of the witnesses here, Mr. Newman, knows, there's
    not a better place in the country to hold a hearing titled,
    ``Keeping Small Premium Cigar Businesses Rolling'' than Tampa,
    the Cigar City. Premium cigar manufacturing defines Tampa. Over
    130 years ago, Vicente Martinez Ybor moved his factory right
    here to the heart of my hometown, and his fellow factory owners
    followed suit. From all over the world, immigrants looking for
    a better life moved here to work in premium cigar factories.
    They came from Italy, they came from Spain, from Cuba, indeed
    from all over the world seeking the American Dream.
        And as the industry grew, it became the center of a
    flourishing multicultural society and the reason that Tampa has
    become such a proud melting pot. All aspects of life revolved
    around the business of making premium cigars. Workers would
    pool their pennies--and I also love the story of the lectore
    reading to them, providing the news of the day, hearing the
    great works of fiction to learn English and provide
    intellectual stimulation. Workers' pennies added up to build
    the various clubs, the Italian Club, the Cuban Club, Centra
    Espanol, Centra Historiano, to name a few, which set the
    cultural identity of Tampa, provided a place to go to see the
    doctor or the dentist, or even meet your wife or husband.
        Premium cigar manufacturing built Tampa and weaved our
    sweet, strong social tapestry, and we want to keep it that way.
        It was in 2016 when the Food and Drug Administration
    adopted a rule that applied onerous and burdensome regulations
    to our city's premium cigar manufacturers. The FDA said it was
    based on a law to stop the scourge of marketing tobacco
    products to kids, but I had worked on that law, and the intent
    was not to include premium cigars. Premium cigars have never
    been marketed to kids, and I've worked tirelessly in the House
    of Representatives to help FDA stay focused to protect the
    public health and to ensure children have adequate, affordable
    health care, and to ensure that they do not have access to
    tobacco products. However, the FDA rule went too far, went
    beyond congressional intent, ignored the distinction between
    traditional handcrafted premium cigars whose retail model mom-
    and-pop stores and expensive products ensured that they are not
    marketed to kids.
        This is why I have reintroduced in the House this year my
    bill, along with my partner, Representative Posey, from the
    East Coast. This year it's H.R. 1854, the Traditional Cigar
    Manufacturing and Small Business Jobs Preservation Act of 2019.
    My bipartisan legislation narrowly focused on premium cigars
    and reinforces that the FDA does not have the authority to
    regulate traditional premium cigars, and it will protect mom-
    and-pop businesses here in Tampa and across the country. The
    bill currently has 36 bipartisan cosponsors, and I promise to
    continue my work with my colleagues and community stakeholders
    to get it across the finish line.
        So thank you again, Senator Rubio, Mr. Chairman, and thank
    you to my good friend and colleague, Congressman Bilirakis. I
    look forward to working with both of you to ensure that my
    hometown's premium cigar industry continues to thrive. Thank
    you very much.
        Chairman Rubio. Thank you, and thank you for hosting this
    hearing in your district today.
        My good friend, Congressman Bilirakis, joins us.

      STATEMENT OF HON. GUS BILIRAKIS, A U.S. REPRESENTATIVE FROM
                                FLORIDA

        Representative Bilirakis. Thank you very much. Thank you,
    Senator Rubio, Representative Castor. It's great to work with
    you all in a bipartisan fashion. Let's get this legislation
    through as soon as possible.
        Thank you, Mr. Chairman, for holding this field hearing and
    for allowing us to participate in this very important
    discussion. I also wanted to thank the witnesses for their
    testimony this afternoon.
        Small businesses are the backbone of the American economy.
    They're generating 3.3 million jobs in Florida alone,
    accounting for over 40 percent of our state's workforce. I have
    always said that our nation's small businesses are too
    frequently burdened with increased regulations, and this is a
    good example of that.
        Too often, Federal agencies fail to understand how their
    regulations and policies harm small businesses across the
    country, and it is clear to me that the one-size-fits-all
    approaches to regulate rarely produce the intended results.
        My phone is ringing; I'll shut it off. Sorry about that.
        Chairman Rubio. The FDA is calling.
        [Laughter.]
        Representative Bilirakis. As seen by the testimonies this
    afternoon, the tobacco market is no different. While I'm
    certainly an advocate for public health, by no means are all
    products created equal. That's so very important. As we will
    hear today, the deeming rule's compliance costs have been
    particularly burdensome for the premium cigar industry, one
    that is dominated by small businesses, many of which are here
    in Florida, particularly here in Tampa. Even by FDA's
    conservative estimates, compliance costs are too much to bear
    for these small businesses, as Senator Rubio pointed out, all
    while producing, at best, minimal public health effects.
        I'm grateful for the Small Business Administration's Office
    of Advocacy, which has been a strong voice for small businesses
    in Florida, promoting regulatory flexibility in the Federal
    rulemaking process. I firmly believe we can strike a balance to
    both achieve the goals of FDA to promote public health and
    safety while at the same time not imposing undue burden on
    small businesses, such as those here today in the low-volume
    premium cigar industry.
        While the deeming rule was an example of the lack of
    flexibility, I'm hopeful that we can work in a bipartisan
    manner, and I know we will, to provide better clarity and less
    burdensome regulation in the future.
        And I yield back, Mr. Chairman. Thank you again for having
    me here today.
        Chairman Rubio. And thank you for being here.
        So, we'll turn to our witnesses. We have a lot of questions
    for you, I know, so we ask, if possible--I know you've all
    written statements. Those will all be in the record. If we can
    keep each one to 4 or 5 minutes so we can get right to the
    questions, I know the members of Congress that are here may
    have to leave at some point.
        So let's start with Mr. Charles Maresca, the Director of
    Interagency Affairs for the Office of Advocacy at SBA, the
    Small Business Administration. He leads a team of attorneys
    that's responsible for reviewing regulations like this one that
    are issued by other Federal agencies to ensure compliance with
    the Regulatory Flexibility Act, and obviously to see what
    impact they have on small business.
        Dr. Brad Rodu is the Endowed Chair of the Tobacco Harm
    Reduction Research Program at the University of Louisville,
    where he published a book on his research on reducing smoking
    in Sweden, and he has more than 150 articles and abstracts in
    peer-reviewed journals attesting to us here of his knowledge of
    reducing the harmful use of tobacco.
        Mr. Jeff Borysiewicz is President and Founder of Corona
    Cigar Company, which is not only a chain of premium cigar
    stores and bars, but he also has revived the practice of
    tobacco growing in Florida, with the Florida Sun-Grown Farm in
    Claremont. In his spare time, he also co-founded the Cigar
    Rights of America, and he continues to serve on the board of
    that group.
        And finally Mr. Drew Newman, who is the General Counsel of
    J.C. Newman Cigar Company, the oldest family-owned cigar
    company in America, the last of the over 150 active cigar
    manufacturing facilities that once called Ybor City home. He is
    also part of that family that founded the company. His great-
    grandfather founded J.C. Newman in 1895.
        So thank you all for being here. We look forward to hearing
    from all of you.
        Let's begin with you, Mr. Maresca.

    STATEMENT OF CHARLES MARESCA, DIRECTOR OF INTERAGENCY AFFAIRS,
         OFFICE OF ADVOCACY, U.S. SMALL BUSINESS ADMINISTRATION

        Mr. Maresca. Chairman Rubio, Representative Castor,
    Representative Bilirakis, I am honored to be here today on
    behalf of the U.S. Small Business Administration Office of
    Advocacy to present testimony to you about the Food and Drug
    Administration's regulation of premium cigars. As the Director
    of Interagency Affairs, I manage a team of attorneys who work
    with Federal Government agencies during the rulemaking process
    to reduce regulatory burdens on small businesses and to
    implement the requirements of the Regulatory Flexibility Act.
    The RFA requires Federal agencies to consider the effects of
    their proposed rules on small businesses and other small
    entities, including small governments and small non-profits.
    Advocacy is an independent office within the SBA that speaks on
    behalf of the small business community before Federal agencies,
    Congress, and the White House. The views in my testimony do not
    necessarily reflect the views of the Administration or the SBA,
    and this statement has not been circulated to the Office of
    Management and Budget for clearance.
        On April 24th, 2014, FDA issued a proposed rule known as
    the deeming rule that would deem formerly unregulated or
    uncovered tobacco products subject to FDA regulation, including
    premium cigars. The rule became final in May 2016. Advocacy and
    small businesses in the industry are concerned about the impact
    this rule would have on the premium cigar industry. Advocacy
    submitted a comment letter on the deeming rule to FDA on June
    11th, 2014. Because the rule was even then expected to have a
    significant economic impact on a substantial number of small
    entities, the FDA included an initial regulatory flexibility
    analysis, as required by Section 603 of the RFA.
        Advocacy's letter stated that FDA's IRFA, Initial
    Regulatory Flexibility Analysis, was deficient because it
    neither adequately described the impacts on all the types of
    newly covered small entities nor explained significant
    alternatives that might reduce those impacts. Advocacy urged
    that FDA publish a supplemental IRFA for public comment before
    proceeding with the deeming rule. FDA did not publish a
    supplemental IRFA prior to the 2016 final rule. However, on
    March 26th, 2018, it published an advance Notice of Proposed
    Rulemaking requesting more information related to the
    regulation of premium cigars. Specifically, FDA requested
    comments related to the definition of premium cigars, the use
    patterns of premium cigars, and the public health
    considerations associated with premium cigars.
        On July 25th, Advocacy submitted a comment letter on the
    AMPRM reiterating our 2014 comment letter urging FDA to include
    a more robust economic analysis of the rule's impact on small
    business and to include a description of significant
    alternatives that would minimize that impact when it publishes
    an IRFA for its proposed rule on the regulation of premium
    cigars.
        Since June 2017, Advocacy has traveled to 24 states to host
    regional roundtables and to hear from small businesses about
    the regulatory issues with which they are most concerned. We
    hosted three of those roundtables in Florida, including one
    here in Tampa, and we heard compelling stories from small
    business owners in the premium cigar industry at many of those
    roundtables.
        Advocacy believes that small businesses dominate the
    premium cigar industry. There are at least 50 manufacturers of
    premium cigars across 19 states or more, all small businesses.
    Over 20 of those manufacturers are in Florida alone.
    Additionally, there are over 3,000 retailers of premium cigars
    located in all 50 states, some of which also roll their own
    cigars and are considered manufacturers under FDA's deeming
    rule.
        According to FDA's own estimates, the deeming rule's
    compliance costs will have significant impacts on small
    businesses. Specifically, FDA states that some low-volume cigar
    manufacturers may end their domestic operations entirely.
    Although many small businesses have argued that the costs will
    be much higher than FDA's estimates, the costs foreseen by the
    agency's own numbers will prove to be too much for most small
    businesses to pay to continue to manufacture premium cigars.
        The premium cigar industry has argued that one report under
    the rule could cost up to $250,000. For manufacturers who
    cannot afford the deeming rule's compliance costs and are
    forced to shutter their factories, there will be thousands of
    employees who will no longer be employed. Cigar Rights of
    America estimates that there are approximately 35,000 jobs
    associated with the premium cigar industry, which includes
    manufacturing and retail employees.
        While FDA has stated the objectives of the deeming rule
    under the authorizing statute, it is still required by the RFA
    to require significant alternatives to the rule that would
    minimize the impact on small businesses, and we again reiterate
    our 2014 recommendations in that regard.
        Thank you for this opportunity to testify on behalf of
    small businesses, and I would be happy to answer any questions
    you might have.
        [The prepared statement of Mr. Maresca follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Rubio. Thank you very much.
        Dr. Rodu.

        STATEMENT OF DR. BRAD RODU, ENDOWED CHAIR, TOBACCO HARM
              REDUCTION RESEARCH, UNIVERSITY OF LOUISVILLE

        Dr. Rodu. Chairman Rubio, members of Congress, thank you
    very much for the invitation to participate.
        As an oral pathologist at a major cancer center 25 years
    ago, I discovered that Americans, including doctors, are
    grossly misinformed about the health risks of cigarettes versus
    the vastly lower risks of dip and chew products; that is,
    smokeless tobacco. This launched my tobacco research program
    that has produced the publications that Chairman Rubio referred
    to in the peer-reviewed medical literature.
        My research established that smokeless tobacco use is 98
    percent less hazardous than smoking, and that extends to the
    risk for mouth cancer. This was confirmed by a large recent
    study from Federal and Federally-funded investigators. They
    found that men who dipped or chewed tobacco had no excess risk
    for mouth cancer--zero.
        Differences in health effects are also well documented for
    combustible products. First, some basic principles. When you
    burn tobacco, you release nicotine and about 7,000 other
    chemicals. Twenty to 30 years of 10 deep puffs on 20 to 30
    cigarettes a day builds high risks for cancers, circulatory
    diseases, and emphysema, leading to a high death toll.
        Cigars also involve burning tobacco, but patterns of use
    are completely different. The FDA knows that the cigar category
    encompasses a wide spectrum of products. One is premium cigars.
    The rest of the category consists of machine-made, mass-
    produced cigarillos, little cigars and filtered cigars, and I
    will refer to all of those as little cigars.
        In 2014, FDA staff estimated that less than 1 percent of
    Americans smoked premium cigars. Most light up infrequently.
    Consumers of little cigars smoke a lot more often, and they
    also tend to smoke cigarettes.
        Premium cigar smokers fit another FDA label, primary; that
    is, they never smoked cigarettes, as opposed to former smokers
    who have switched over to cigars and dual users of both
    products, again mostly little cigars. This is important because
    adding cigarettes adds risk.
        In my submitted testimony I present detailed information
    from a published FDA analysis of 22 epidemiologic studies of
    the causes of death among cigar smokers, most of whom, of
    course, are men. The FDA study listed many diseases associated
    with cigarette smoking. The biggest killers are cancers, heart
    disease, stroke and emphysema. Consumption of one or two cigars
    per day was not associated with significantly increased deaths
    from any of these diseases in the FDA study.
        To be clear, puffing or inhaling the smoke of burning
    tobacco is not a healthy activity. But the FDA researchers
    misstated the facts when they concluded that, quote, ``Cigar
    smoking carries many of the same risks as cigarette smoking,''
    end quote.
        All tobacco consumers deserve truthful information and
    guidance. The sweeping FDA indictment ignores scientific
    evidence and misleads cigar smokers. The following facts are
    indisputable.
        In the U.S., the prevalence of cigar use, especially
    premium cigars, is very low.
        Number two, premium products are used infrequently and in
    small numbers.
        And number three, they are puffed rather than inhaled.
        Low prevalence, infrequent use, and reduced exposure
    translates into minimal harm at the population level.
        Conflation of cigarette smoking with dip and chew, vaping,
    cigar and pipe smoking falsely informs consumers that all
    tobacco products are equally dangerous. When Congress gave the
    FDA regulation of tobacco products 10 years ago, it did not
    direct the agency to treat all tobacco products as equally
    hazardous. Unfortunately, the FDA's regulatory actions have
    done just that.
        The FDA's current posture wastes government resources,
    undermines public health, and does nothing to address the half-
    million deaths caused by cigarette smoking.
        Thank you.
        [The prepared statement of Dr. Rodu follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Rubio. Thank you very much.
        Mr. Borysiewicz.

     STATEMENT OF JEFF BORYSIEWICZ, PRESIDENT AND FOUNDER, CORONA
                             CIGAR COMPANY

        Mr. Borysiewicz. My name is Jeff Borysiewicz, and I'm the
    President and Founder of Corona Cigar Company, which is a
    retailer of premium cigars. In 1996, I started Corona Cigar
    Company as a mail order business operating out of an extra
    bedroom in my house. With hard work, passion, determination,
    loyal customers, and a great team of employees, over the past
    22 years we have been able to grow Corona Cigar Company into
    one of the world's most recognized cigar retailers. We own and
    operate four brick and mortar stores with cigar bars in Orlando
    and Tampa. We employ over 125 wonderful people.
        Running any business is a challenge. There are challenges
    of making payroll, paying the rent, growing your business, and
    staying ahead of the competition. However, the greatest threat
    to my business and to the thousands of other premium cigar
    retailers just like me is the heavy hand of government
    regulations being pushed forward by the FDA.
        For hundreds of years, America's premium cigar retailers
    have been a part of our culture. Watch any old Western movie
    and you will see the iconic wooden cigar store Indian posted in
    front of the local cigar shop. This is an industry where most
    retail cigar stores are locally owned and operated mom-and-pop
    shops. The store clerks and shop owners know their customers by
    name, and the customers trust the retailer for information on
    what's the latest and greatest in the world of cigars. But if
    premium cigars are not exempted from FDA regulations, our
    industry will definitely shrink and it will even be more
    difficult for a retailer to survive.
        In 2018, the Small Business Administration hosted
    roundtables to gather feedback about the issues facing
    businesses across all industries. Fellow premium cigar
    retailers from five states and seven cities spoke out at these
    meetings and voiced their concern on how the current FDA cigar
    regulations, if left unchecked, will cause great harm to their
    businesses.
        Some of the new rules from the FDA leaves one shaking her
    head in disbelief. For example, if a cigar retailer assembles
    an assortment of cigars and puts them in a package like a bag
    and sells this as an assortment or gift pack, the retailer must
    register as a manufacturer. If a cigar shop owner receives a
    new brand and wants to give a customer a cigar as a gift
    because he thinks he might enjoy that brand, he is now breaking
    the law because of the FDA's sampling ban. If a cigar maker
    wants to donate cigars to our troops, he can't because of the
    FDA cigar regulations.
        The new FDA regulations require that 33 percent of a cigar
    box lid to be covered with a health warning label. One of the
    most beautiful features of premium cigars is the handcrafted
    wooden boxes that these products are packed in. Some of the
    cigar box art dates back more than 150 years. People buy cigars
    to celebrate special occasions, like the birth of a child, a
    graduation, a wedding, or the return home of a soldier. When
    you walk into a cigar store, our aisles are adorned with
    beautiful cigar boxes representing the various brands. When
    every cigar box has a huge health warning sticker covering a
    third of that box, our stores will look like you are walking
    into a dangerous minefield rather than a beautiful humidor.
        If a cigar store has a private label brand that bears the
    name of the store, the FDA regulation states that all printed
    and electronic ads carry the same health warnings covering one-
    third of the ad. So essentially, if we run a full-page ad in,
    let's say, Golf Digest, we would essentially be paying for one-
    third of that page to advertise a health warning. This is
    forced, compelled speech and is currently being challenged in
    court.
        The manufacturer's cost of constituent testing and
    submitting the FDA's substantial equivalent applications will
    cause most smaller cigar manufacturers to go out of business.
    For many brands, the testing alone will cost more than the
    gross annual sales of the boutique brands. One of the most
    appealing aspects of the cigar industry is the diversity of our
    suppliers. This is an industry where literally a cigar maker or
    tobacco farmer could escape communist Cuba on a raft and start
    a cigar company in America. This is a true scenario; I've seen
    it happen. FDA regulations will narrow our manufacturers down
    to just a few suppliers, big multinational companies that can
    afford an army of lawyers to navigate the complicated rules of
    the FDA.
        One of the main arguments for FDA regulation of tobacco
    centers around youth access. As a premium cigar retailer and a
    father, I can tell you firsthand that kids aren't coming into a
    cigar shop trying to buy premium cigars. It hasn't been a
    problem in the past and it isn't a problem now. A recent study
    by the New England Journal of Medicine that was funded by the
    FDA proves this with ``no discernible percentage of youths
    frequently using traditional cigars'' and less than 1 percent
    of all youths had ever used a traditional cigar within the last
    30 days.
        It is important to note that even before the FDA had the
    authority to regulate tobacco, cigar retailers have been
    federally regulated by the ATF and state regulated by the
    Division of Alcohol, Beverage & Tobacco. At any time a Federal,
    state, or local law enforcement agency can run a sting
    operation where they send in a minor and attempt to buy
    tobacco. Premium cigar retailers are responsible vendors and no
    one wants to sell tobacco to a minor.
        Lastly, I'd like to talk about the impact of FDA
    regulations on the American cigar tobacco farmer. No other
    group in the agriculture industry has been hit as hard as the
    American cigar tobacco farmer. At one time, Florida was the
    second largest grower of premium cigar tobacco in the U.S.
    After 150 years of tobacco growing history, the last crop was
    planted in 1977 in Gadsden County, Florida. In Connecticut,
    which used to be America's number-one grower of Connecticut
    Shade tobacco, only one farm is left that still grows Shade.
    Connecticut and Pennsylvania still grow broadleaf premium cigar
    tobacco wrappers, but I can tell you firsthand FDA regulations
    will jeopardize the future of this industry as well, as new
    cigar blends get harder and harder to introduce and as the
    industry is forced to consolidate due to FDA regulations. In
    2013, we started a small 20-acre cigar tobacco farm in
    Clermont, Florida to bring back an American farming tradition.
    However, if premium cigars are not exempted from the FDA
    regulations, this too will likely fade away.
        In closing, I appreciate the efforts of Senator Rubio,
    Representatives Kathy Castor, Bill Posey, Gus Bilirakis, and
    the hundreds of other representatives that have co-sponsored
    legislation in the past to exempt premium cigars from FDA
    regulations. However, this issue must get resolved quickly as I
    am watching a very small industry running out of the financial
    resources that it takes to fund lawsuits against the FDA, the
    legal expenses to navigate the existing complicated FDA
    regulations, and the costs of lobbying in D.C. to save this
    historic industry.
        Thank you.
        [The prepared statement of Mr. Borysiewicz follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Rubio. Thank you.
        Mr. Newman.

    STATEMENT OF DREW NEWMAN, GENERAL COUNSEL AND GREAT-GRANDSON OF
                 THE FOUNDER, J.C. NEWMAN CIGAR COMPANY

        Mr. Newman. Thank you very much. Good afternoon, Mr.
    Chairman and members of Congress.
        In 1895, my great-grandfather, J.C. Newman, founded our
    family business. Four generations and 124 years later, we are
    the oldest family-owned, premium cigar company in America.
        Right here in the Cigar City of Tampa, we proudly roll
    premium cigars the exact same way that my great-grandfather did
    100 years ago, both by hand and by hand-operated, antique
    machines. We have 136 hard-working and dedicated employees.
        Premium cigars are an old-world, handmade craft enjoyed by
    adults infrequently for celebration and relaxation, and they
    are just like fine wines. Just as the soil and sunlight and
    wind and rain can cause a grape grown in California to taste
    differently than a grape grown in Oregon, the same is true of
    premium cigar tobacco. As with wines, certain vintages or years
    are better than others. And aging both wines and premium cigars
    enhances their taste. Many winemakers blend different grapes
    together to create unique tasting wines. As a cigar maker, we
    do the exact same thing with premium cigar tobacco. We harness
    the natural variation in premium cigar tobacco to make
    interesting blends for low-volume, limited-edition releases.
    None of this is standardized. None of this is written down.
    There is no formula. It is not a science. It is an art and
    tradition that has been passed down from generation to
    generation to generation.
        Premium cigars are just 3 percent of the American cigar
    industry and are 0.7 percent of the tobacco industry as a
    whole. We are a tiny sliver of the tobacco world.
        We are deeply concerned that the FDA is regulating our
    small industry out of business by treating our handcrafted,
    premium cigars like cigarettes.
        In 2016, FDA adopted a one-size-fits-all policy for tobacco
    and applied the same massive and costly regulations developed
    for cigarettes onto our handcrafted, premium cigars. This
    approach simply does not work for several reasons.
        First, to create a new cigar, FDA requires it to be
    substantially equivalent to one sold 12 years ago in 2007. The
    process laid out by FDA is so exhaustive that it is expected to
    cost $250,000 for a single new cigar. Moreover, the concept
    simply does not work either, because no two premium cigars are
    alike, and they change over time. A cigar that was rolled in
    2007 tastes different today than it did when it was first
    rolled a decade ago, just like fine wines mature over time as
    well.
        FDA is requiring us to redesign our packaging to apply
    massive health warning labels that would turn beautiful stores
    like Jeff's into walking billboards for compelled speech.
        FDA is requiring us to test every new type of cigar. Not
    only are there no standards or machines or ways for testing
    premium cigars, but costs so far, at $18,000 per size, are just
    enormous. This is particularly a problem because whereas
    cigarettes are made in large volumes and are standardized,
    handcrafted premium cigars are made in small batches, just like
    craft beer.
        We are paying thousands of dollars a day in user fees so
    that FDA can regulate us.
        As Chairman Rubio mentioned, current estimates are that it
    will cost our historic cigar factory here in Tampa around $30
    million just to comply with FDA regulations, which is why FDA
    itself estimated that regulation would force up to 50 percent
    of the American cigar industry to go out of business.
        Unlike Big Tobacco, the American premium cigar industry is
    made up almost entirely of small family businesses like ours.
    We sell our premium cigars to 3,000 specialty cigar retailers
    all across the country. These are mom-and-pop, small family
    businesses with just a handful of employees. Our boutique
    premium cigar industry simply cannot absorb the cost of
    regulation.
        In 2009, Congress gave FDA authority to regulate tobacco
    for two reasons: one, to address youth usage; and two, to
    address addictiveness. However, FDA's own research has found
    that children simply do not choose to enjoy premium cigars; and
    two, the premium cigar consumer, the typical one, consumes 1.7
    premium cigars per month. That is not a frequency consistent
    with addiction.
        We do respect FDA's important mission and the important
    work that it does to protect public health. However, there is
    no scientific basis for the FDA to regulate premium cigars.
        We are extremely grateful to Chairman Rubio and to
    Congresswoman Castor for their leadership in reintroducing
    bipartisan legislation to exempt premium cigars from FDA
    regulation. The entire premium cigar industry, including the
    Cigar Association of America, Cigar Rights of America, and the
    International Premium Cigar and Pipe Retailers Association,
    supports exemption.
        Mr. Chairman, our one goal as a family business is to
    continue my great-grandfather's legacy and hand-roll premium
    cigars in America for another four generations and 125 years.
        We are not here today because we want a handout or tax
    breaks from the government. We simply want the government to
    allow us to continue this tradition for another 100 years.
        Thank you so much for giving us the opportunity to share
    our story, and we're very grateful. We're happy to answer any
    questions.
        [The prepared statement of Mr. Newman follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Chairman Rubio. Thank you.
        Thank you all for being here.
        I'm going to recognize Congresswoman Castor for her
    questions.
        Representative Castor. Thank you, Mr. Chairman.
        Thank you all for your testimony today.
        For Mr. Newman and Mr. Borysiewicz, how many jobs are at
    stake here? You're running a factory, and I've met some of the
    hard-working employees, many who have been employed there for
    how long?
        Mr. Newman. Our average age--we have 103 employees here in
    the Cigar City of Tampa. Their average age is 49, and the
    median tenure is over a decade. We have long-term employees,
    and they're like a family to us. We're a family business, and
    that's how the cigar industry here in Tampa has developed over
    the last 100-plus years.
        Mr. Borysiewicz. For us, we have 122 employees, and we have
    fellow retailers all across the country, and I think that's an
    important part of this, that this is a national issue. My
    colleagues are as nervous as I am, whether you're in New York
    or California or Washington. The path forward, we can see that
    the path forward is a long-term--it's just going to clamp down
    on this industry where long term it's going to wither on the
    vine, it's going to go away.
        I think it's important to note, this industry back in the
    `70s had a big problem too where it was very small. Because the
    product is not addictive, it's an industry that can get
    squeezed out of business very easily.
        Representative Castor. Thank you.
        Chairman Rubio. Congressman Bilirakis.
        Representative Bilirakis. Thank you.
        Mr. Newman, you mentioned in your testimony there is no
    scientific basis for FDA to regulate premium cigars. If you
    could elaborate, I'd appreciate that.
        Mr. Newman. Sure. Thank you very much, Congressman.
        FDA's mandate in the Tobacco Control Act was to address
    youth usage and to address addictiveness, and FDA's own
    research on patterns of use for all tobacco products shows that
    there is use by children of other tobacco products. However,
    FDA's own research has shown there is an insignificant use of
    premium cigars by children.
        We know this anecdotally as cigar makers, but to have FDA's
    own data showing that kids don't smoke cigars we think is very
    powerful. And then on top of that, Dr. Rodu's research that he
    mentioned showing that the health effects of premium cigars are
    limited and vastly different than cigarettes, in large part
    because our typical consumer smokes 1.7 premium cigars per
    month for celebration, relaxation, weddings, birthdays. It's
    just a very different approach.
        So the FDA's decision to take a one-size-fits-all policy
    for tobacco products simply doesn't work for our handcrafted
    premium cigars.
        Representative Bilirakis. Thank you very much.
        I thought we were taking turns. Oh, she's leaving?
        Chairman Rubio. Yes, she had to depart. She had another
    event.
        Representative Bilirakis. Oh, okay. Go ahead. You go, and
    then I'll go again.
        Chairman Rubio. No, no, go ahead. I have to be here until
    the end.
        Representative Bilirakis. Okay, very good.
        Again for Mr. Newman, we all recognize the issues with
    youth access to tobacco products and would like to work with
    FDA and other stakeholders to curb youth access, and I
    understand the age is 18, as the Senator said, and the
    legislature is thinking about 21.
        Who is your typical customer? Again, you did say this. You
    may want to elaborate, if you'd like. How does their behavior
    differ from non-premium cigars?
        Mr. Newman. Thank you, Congressman. You know, the FDA has
    done some really tremendous research on adult and youth tobacco
    users, and the FDA's own research has shown that the typical
    age that an adult first smokes premium cigars is 24.5 years
    old. These aren't teenagers. These aren't kids. These are young
    adults, and that's why there is not a youth access problem with
    premium cigars, as there may be with other types of products.
        Representative Bilirakis. Yes, and they're more costly,
    aren't they, the premium cigars?
        Mr. Newman. Absolutely, Congressman. Our typical premium
    cigar retails for $5, $6, $7, $8 or more, depending upon the
    state and the tax levels, and they're sold in adult-only
    premium cigar shops. So from the marketing to the branding to
    the packaging to how these cigars are put together, they're
    just completely different than every other type of tobacco
    product, and we need the FDA to recognize that they're
    different.
        Representative Bilirakis. Thank you, Mr. Newman.
        Question for Dr. Rodu. Recent studies have shown a dramatic
    increase in youth usage of e-cigarettes and vaping products--
    you hear it all the time--many of which come in youth-appealing
    flavors. This is a real concern.
        Do you believe the FDA's inclusion of premium cigars in the
    deeming rule detracts from its ability to focus on these
    products?
        Dr. Rodu. Congressman, no, I don't. I don't. There's
    clearly increased use of vaping products among teenagers. I
    actually just downloaded the NYTS, the National Youth Tobacco
    Survey data last week and published a blog on that use.
        It's interesting because the FDA portrays it as an
    epidemic. However, most kids get tobacco products, not premium
    cigars but other tobacco products from their social sources,
    their friends, their family, and others. They don't buy them at
    retail, and the FDA has been actually obsessed with the youth
    issue as a retailer's issue.
        So, no, they're not buying premium cigars, and there's no
    issue here whatsoever.
        Representative Bilirakis. Okay, very good.
        Mr. Borysiewicz, in your testimony you briefly touched on
    the detrimental downstream effects of the deeming rule on other
    stakeholders like our farmers in Florida and nationally. Could
    you expand on that? I know that you touched on it, but expand
    on it. That's very important.
        Mr. Borysiewicz. There's a lot of pressure on American
    tobacco farmers because of cost. It's very expensive to grow
    cigar tobacco. It's totally different than cigarette tobacco.
    It's not a mechanized harvest. It's all hand labor, and it's a
    long tradition of doing it. In Connecticut they've been doing
    it over 150 years, as well.
        So there's huge external pressure to be able to compete
    against countries like Ecuador, Nicaragua, Honduras and the
    Dominican Republic, which are the primary growers of that
    tobacco.
        So as this industry faces the additional costs of FDA
    regulation, the owners of these companies or the folks in
    Europe that own the bigger ones, they're looking at ways to cut
    costs every way they can, and it's a lot cheaper to go ahead
    and buy wrapper from Ecuador than it is from Connecticut.
        So you're seeing these cost-cutting measures, and you're
    seeing--what's really important on premium cigars is that new
    brands are critical to this business, and I'll use it in
    comparison, let's say, to the liquor business. When I was a
    kid, the popular brands were Seagram's 7, Canadian Club. Those
    brands, I don't even know if they make them anymore. You have
    to have new products that continue to keep the interest of the
    consumer, and if you don't have those new products that are
    introduced into this industry, you will eventually--it becomes
    boring and folks just aren't going to come in and buy these
    different cigars, and there's no opportunity. If you're growing
    Connecticut broadleaf tobacco and there's no new brands that
    are ever going to use it, these guys are going to get squeezed
    out. They're going to get squeezed out because they can't grow
    it as cheaply as you can grow it in other countries.
        Representative Bilirakis. Okay, thank you.
        One last question for Mr. Maresca. SBA's letter notes FDA's
    estimates that approximately 90 percent of the entities
    affected by the regulations are small businesses. We know that.
    Do you believe if the regulations remain in effect there's
    likelihood that what remains of the industry could end up
    consolidated under a few large companies rather than many small
    entities, as is the case currently?
        And again, are we going to get shut out? These big
    companies might not even want to produce these cigars because
    they're so expensive under these regulations.
        But if you could comment on that, Mr. Maresca, I'd
    appreciate it.
        Mr. Maresca. We believe that there is that danger. One of
    the costs that FDA failed to consider was the cost to these
    small businesses. Even if they could comply with the premarket
    approval process and the substantial equivalence tests, they
    generally would have to hire someone from outside, a
    specialist, attorneys, just to get through the application
    process. They're not set up to do that. Bigger companies are.
    They can do that in-house, or they have people on retainer who
    do that. So, sure, that's a danger.
        Representative Bilirakis. Thank you very much.
        I yield back, Mr. Chairman.
        Chairman Rubio. Thank you.
        Let me start first with the industry, Mr. Borysiewicz and
    Mr. Newman.
        First of all, I think somebody cited that the average cigar
    smoker was smoking 1.7 cigars per month. I think it begs the
    question, why are they letting that 0.3 percent go to waste?
        [Laughter.]
        Mr. Newman. It's a great question.
        Chairman Rubio. I just don't know how to smoke right,
    that's what it is.
        [Laughter.]
        Mr. Newman. Mr. Chairman, the frequency of cigar usage
    changes by the season. In the wintertime when it's colder, our
    consumers smoke fewer cigars because up north it's colder
    outside----
        Chairman Rubio. And no one will let you smoke inside their
    house, cigars especially.
        Mr. Newman. That's right, that's right.
        Chairman Rubio. That was my second question. How do you
    achieve that? But I don't know the answer to it either.
        But all kidding aside, there was a comment made--maybe I'll
    start with Dr. Rodu because the comment was made about the
    uniqueness of this product.
        I think one of the reasons why you see a lot of concern--
    I'm the father of adolescents, and an adult daughter now at 19,
    and I've seen this phenomenon of vaping. It's caught on fire,
    everybody is seeing it. It's all over the place. And one of the
    concerns about it is that it delivers a high volume of nicotine
    very quickly, and nicotine is addictive, a very addictive
    substance. And the concern is not the vaping per se, although
    there's some additives that have been brought into this vaping
    issue that are problematic, meaning non-vaping material that's
    been put in there.
        But in addition to it is once someone is that addicted to
    nicotine, they have to find other sources to get the same
    amount of nicotine, and the concern is that people migrate over
    to some of the other products, et cetera.
        But cigar smoking, does it carry the same risks? We've seen
    the health outcomes, but what about the addiction aspect of
    cigar smoking? Because it does deliver, I imagine, a high
    content of nicotine, but it does so--but not equivalent to 20
    cigarettes, or 25 a day.
        I want you to comment, is there evidence in the research--
    did you do research into the addiction portion of it?
        Dr. Rodu. Yes, there is. To put it simply, there's no
    better and more addictive product than cigarettes. The smoke's
    pH and its characteristics for deep inhalation provides a rapid
    nicotine impact on the brain. There's no better way to deliver
    nicotine.
        Cigars, on the other hand, are----
        Chairman Rubio. Because it's inhaled into the lungs and
    into the bloodstream, as opposed to cigar smoke where, if you
    inhaled it into your lungs, you wouldn't last long. It's not a
    pleasant experience. You hold it in the mouth and you exhale
    it. You may be consuming, or I should say you may be producing
    a high amount of nicotine, but it's not going directly into
    your lungs and therefore into your blood.
        Dr. Rodu. That's correct. Cigar smoke is puffed, and there
    is some absorption across the lining of the mouth and upper
    airway, but it's not nearly the same impact as with cigarette
    smoking.
        Chairman Rubio. And therefore we don't see--in your expert
    opinion, if you were just a cigar smoker, that's all you did,
    and you smoked two of them a day, or let's say 1.7 a month,
    would you be a nicotine addict?
        Dr. Rodu. You know, nicotine addiction is a very difficult
    concept to define. Our discussion groups, they go around and
    around about nicotine and----
        Chairman Rubio. So let me ask it a different way, and I
    apologize. This might be exactly what I'm trying to get at.
    Could smoking 1.7 cigars a month become a gateway to
    cigarettes? Is there evidence that cigar, premium cigar smoking
    becomes a gateway to cigarette smoking?
        Dr. Rodu. No, not at all.
        Chairman Rubio. Okay. Let me go to the industry real quick
    on this. The rule was designed to test a product. That's the
    other hard thing to explain to people who don't understand
    about cigars, because even within the product there can be
    great variety, right? So it's not like something that's
    produced in a factory which is standardized and machine
    produced and with all kinds of additional artificial additives
    to sort of make it almost the same. You can open two different
    boxes of cigarettes, but with the same label you're going to
    get a very comparable product.
        With cigars, you can be buying the same company's brand
    with the same product, meaning you have the same band on it,
    but one is from two years ago and one is from this year, and
    there can be great variety given the fact that it is not a
    processed product. It is in many ways more like wine, dependent
    on weather conditions, soil conditions, and every other thing
    that may have happened in that particular year. I mean, you can
    explain, both of you I guess, how much variety there is, even
    among the same box, potentially even in the same year, but
    certainly across periods of time.
        Mr. Borysiewicz. I'll start with that on the growing side,
    as a grower of premium cigar tobacco. One of the reasons you
    have variations also is just the position on the plant that the
    leaf comes off of. That's why I was saying that cigar tobacco
    harvesting is not mechanized. It's done by hand. It's done the
    same way it was done 200 years ago. So you can take a leaf off
    the bottom of a plant; it tastes different than one that comes
    off the top of the plant.
        We have variations just in the field, meaning that if you
    can have one section of your field that may have better
    drainage than the other section, these plants have variations
    in them. And because cigar tobacco is not thrashed, meaning
    it's not ground up and homogenized, meaning you're not taking
    tobacco from all over and just kind of shredding it and
    combining it, there is very much uniqueness in each leaf, and
    you will have some variation in the cigars.
        Manufacturers try to keep it somewhat consistent, but I can
    tell you there is definite variation, and that's one of the
    problems the FDA has had when they're trying to test these
    cigars. They're all over the place, and that's one of the
    things they can't get their hands wrapped around because
    they're trying to use the same type of regulations that were
    designed for cigarettes. Cigarettes do use tobacco that's very
    consistent because you're mixing thousands and thousands of
    pounds together, and there's casing what's called, where you
    add things to the tobacco.
        When you take cigar tobacco--I can tell you right now what
    comes out of our farm, nothing but dried brown tobacco leaves.
    There's nothing added to it. It's simply moisture and humidity
    during the day, in the morning that we use so we can pack
    tobacco, but there's absolutely nothing added to that.
        Mr. Newman. Jeff is right. We harness the natural variation
    to create unique blends, and not only within the same fields
    and within the same plants is there great variation, but from
    season to season or crop to crop, depending upon the amount of
    wind or rain, which give great variances. So with the FDA
    trying to create a scientific standard and holding our products
    to a manufacturing--like when somebody manufactures Tylenol,
    it's just inconsistent because of the extreme natural variation
    that we use in premium cigar tobacco.
        Chairman Rubio. I'm sorry to inform you but since you held
    up that cigar, we're going to have to seize it as evidence.
        [Laughter.]
        Mr. Newman. Happy to submit it.
        Chairman Rubio. We've got to follow the rules.
        [Laughter.]
        On the testing side, is there such a thing as a standard
    test to test cigars?
        Mr. Newman. Not at all, Mr. Chairman. There's been great
    science developed over decades for testing cigarettes, and the
    reason is because cigarettes come in just a couple of standard
    sizes, and they're consumed the same way.
        We make cigars that are long, that are short, this one has
    a torpedo end on it, some are thicker, some are thinner.
    There's just an enormous variety in cigars because premium
    cigars are an all-natural, handcrafted product. So unlike
    cigarettes, there are no machines to test products like these,
    and there are no standards for them to address the variability
    in the size and the length.
        An FDA study three years ago showed that there is enormous
    variation in how much of a cigar a consumer smokes. Some people
    will smoke half of it; some people will smoke all of it; others
    smoke an inch. So trying to standardize that in a scientific
    way to create a rigorous testing regime just doesn't work and
    hasn't been developed for premium cigars like exists for other
    types of tobacco products.
        Chairman Rubio. I guess what I'm getting at is, if even
    within the same brand and product there isn't uniformity the
    way there is in a mass-produced product, and there doesn't
    exist a test that can accurately measure these products in
    general, not to mention because of these varieties, are we
    talking about a rule that can't even be complied with? Even if
    you wanted to comply, could you even comply? Could anyone
    comply with the rules as currently written, unless you went to
    machine-produced cigars?
        Mr. Newman. You're absolutely right, Mr. Chairman. There's
    no way to comply with the rule as developed. My grandfather
    used to tell me that the reason why we've been in business so
    long is because we get along, we follow the rules, we don't
    take any shortcuts, and if there was a way for us to comply, we
    would do our very best to comply. But what keeps us up at night
    is that the FDA is imposing requirements on us that we have no
    way of being able to comply with, and that's what's so scary
    about the FDA regulation on premium cigars.
        Chairman Rubio. I guess the way you both described it, it's
    apparent that both the cost and complexity of compliance means
    that the small businesses that largely comprise this industry,
    that there is no way that they would be able to comply with
    this. So to the extent that the industry--I'm sorry; you were
    going to add?
        Mr. Borysiewicz. Yes, I want to add to that, because one of
    the interesting things that I've seen as a retailer, when I
    talk about the big multi-national companies that have an army
    of lawyers and the funds to do this, they have submitted what
    the FDA is requiring, and there's a very good chance that what
    they're even submitting--because the FDA's testing does not
    work. So what happens is the smaller companies that could never
    afford to do this anyway--these guys are sort of in limbo right
    now, and it's literally their business--they're taking it a day
    at a time. And there's a lot of folks that look at this saying,
    you know what, there's always good versus evil and things kind
    of work out, and they just feel like there's no way that we're
    going to be put out of business by this rule because it's just
    so unfair, it's just so undeserved. And a lot of folks are like
    Congress is going to save us, somebody is going to step in
    because this is so wrong what's being done.
        But I'm afraid that--I will tell you one of the quotes that
    I heard when I was up in D.C., is that Congress doesn't work
    that way. Generally they start needing to see businesses go out
    of business before they see something is wrong. There's the
    famous words of unintended consequences, and I can tell you
    what's happening. The unintended consequences in this business
    are going to be the little guy sitting here in Ybor City that
    has three cigar rollers, the guy that's got a place in Miami
    that has 15 rollers. It's all these little guys that are going
    to be the unintended consequence, and we've got to fix this
    because it's just not right.
        No one came to this country, or no one started a business
    thinking they were going to lose it because of the United
    States Government, and that's exactly what's happening right
    now, that's what's going through everybody's mind. The
    government is not supposed to be the enemy of a small business,
    or of any business.
        Chairman Rubio. So, who will be in business? Are products
    that are made abroad covered by this?
        Mr. Borysiewicz. I'll answer the question. The guys who
    will be in business are the ones who have the deep pockets, the
    ones that can figure this stuff out. Listen, when you even read
    what is required--I mean, I'm educated, but I read what the FDA
    is asking, and I don't understand it. Half of our industry
    doesn't understand it. We have trade association meetings and
    we ask questions: Well, what does this regulation mean? What
    does this do? Just last week the FDA put out another rule
    supposedly clarifying the other one that no one understood.
        [Laughter.]
        Nobody figures this out. They don't even know what's going
    on. So what's happening is you're trying to run a business and
    you keep saying in your head, do you invest the money in this
    factory, do you invest the money building this store? Imagine
    trying to run a business when you just don't know what's going
    on, and that's the biggest problem that's facing us.
        Chairman Rubio. As you understand it, or the general
    counsel for a company, the products that are being manufactured
    abroad, will they have to meet the same regulation?
        Mr. Newman. They will eventually. The regulation process is
    being phased in. Domestic manufacturers right now are required
    to register their brands and report ingredients. Those
    requirements have not yet been extended to foreign
    manufacturers yet. So the FDA, in effect, has a higher standard
    for domestic American small businesses making premium cigars
    than it has on foreign factories.
        Mr. Borysiewicz. I want to add to that, though. There is a
    little bit of a curve ball in the sense that if the embargo
    were to end with Cuba, and if Cuban cigars were brought into
    the United States, none of those were on the market before
    2007, so none of those are grandfathered cigars. The question
    is whether they can get through the premarket approval process,
    which is what a lot of the biggest problem is.
        So what I think, if the embargo were to end today, the way
    the FDA regulations are, those brands, I don't see how they can
    even enter the country because they haven't registered with the
    FDA and are not a grandfathered brand.
        Chairman Rubio. So, in essence, there would be no premium--
    unless someone is willing to undertake this price and go
    through that, there would be no premium cigar industry in the
    United States. It would become almost a contraband product.
        Mr. Newman. I think so, Mr. Chairman. We're such a tiny
    industry. As you pointed out, we're 0.7 percent of the tobacco
    industry in America right now. It would be very easy for the
    bureaucracy in Washington just to smoosh us like a bug.
        Chairman Rubio. All right. I want to get real quick to the
    health part of it. Let me ask you, Mr. Maresca. I'll start with
    this. Did the FDA work with the Office of Advocacy prior to
    finalizing the regulations?
        Mr. Maresca. Prior to the publication of the Notice of
    Proposed Rulemaking in 2014, we had minimal contact with the
    FDA.
        Chairman Rubio. I'm sorry. Minimal?
        Mr. Maresca. Minimal.
        Chairman Rubio. So what data did you provide them when you
    ultimately did have that contact?
        Mr. Maresca. The most information we were able to provide
    FDA was in our comment letter. We have offered the resources of
    our office since that time to help the agency acquire data and
    help the agency to use that data in any future rulemaking.
    That's the extent of our contact.
        Chairman Rubio. Do you have any indication that the FDA
    considered the feedback that you provided?
        Mr. Maresca. I think the rule speaks for itself, Senator.
    The agency declined to exempt premium cigars even though they
    did suggest that they were considering exempting premium
    cigars.
        Chairman Rubio. So while the FDA's proposed rule considered
    exempting premium cigars, the final rule suddenly included
    them. As an expert on regulation, do you think this proposed
    rule provided adequate notice to the industry that was affected
    by the rule?
        Mr. Maresca. Well, it's a unique industry, as you know, and
    as Mr. Borysiewicz said, many people in the industry relied on
    FDA or somebody to save the industry. I don't think that the
    notice was quite enough, and I think many in the industry,
    especially many smaller members, were led to think that they
    were not going to be regulated.
        Chairman Rubio. On the health care aspect, I'd like to go
    back to that. On the health cost of it, I guess 0.7 percent of
    all smokers are premium cigar smokers. Of that amount, only 7
    percent of that small less than 1 percent of all smokers, only
    7 percent of that amount are daily users, meaning one or two a
    day.
        So if you can just repeat what you went through in your
    testimony, what do we know about the health impacts of someone
    who smokes cigars, not concomitant with cigarettes or other
    products? Do we have information on that subset and what the
    health impacts are?
        Dr. Rodu. One of the problems with studying a very rare
    behavior is that you don't have large numbers, so you have to
    combine populations from many different places. That's been
    done to a certain extent, and yet the results of those studies
    have not found any or hardly any significantly elevated risks
    among those cigar smokers. So the public health impact of low
    prevalence and low disease risk is miniscule.
        Chairman Rubio. In your opinion, are the numbers we know
    about that user, if any other product on the market didn't
    involve the word ``tobacco,'' would it be something that we
    would be regulating given the figures that you're seeing?
        Dr. Rodu. Not a chance.
        Chairman Rubio. Then I would imagine that if the numbers
    are negligible among daily users of the product, which
    represent a very small sliver of a very small sliver of all
    smokers, it would stand to reason or perhaps the data says that
    people that smoke less than once a day, including the average
    1.7, to the extent this product causes harm--it's
    scientifically valid to argue that if something is harmful, the
    more you use it, the more harmful it is. The people who are
    smoking less would be having less of a problem?
        Dr. Rodu. In my review of the FDA study, I found virtually
    no impact from one to two cigars per day. That's what they
    defined as the lowest cigar consumption. If you smoke higher
    numbers, yes, the risks tend to go up somewhat. But at one to
    two cigars a day, there was virtually no health impact. So
    smoking less is going to be essentially not measureable.
        Chairman Rubio. Let me ask you, are there differences in
    health outcomes between premium cigar smokers that have never
    smoked cigarettes and those who have?
        Dr. Rodu. Generally speaking, the data is not that
    detailed.
        Chairman Rubio. So we don't have the detail. My sense of it
    is that, as noted in your testimony, 40 percent of premium
    cigar smokers have never smoked cigarettes. So the notion that
    you have a significant percentage of this, again, very small
    sliver of a very small sliver, it's not a supplement to their
    cigarette smoking. It's a unique habit unto itself.
        Dr. Rodu. That's correct.
        Chairman Rubio. Do you have anything else?
        Representative Bilirakis. Well, again, the basic question
    is give me a definition. I know that we know. But, first of
    all, a definition of a premium cigar. And secondly, go through
    the process, what does it take to produce a premium cigar as
    opposed to a non-premium cigar, and the cost process as well.
    And why do folks only smoke two a day, as opposed to a pack of
    cigarettes a day? Is it the cost solely? Give me your opinion
    on that.
        Mr. Newman. Thank you, Congressman. Well, to your first
    point, I think the universally agreed upon definition of a
    premium cigar is in Senate bill 9. It's in Chairman Rubio's
    bill that defines the premium cigar as a handcrafted product.
    But we roll cigars today just like my great-grandfather did 100
    years ago, and one of the reasons why our consumers smoke so
    few of them is because they use them for relaxation and for
    enjoyment, whether playing a round of golf or going fishing or
    in a fire pit in the backyard.
        We live in such a fast-paced world these days, Congressman,
    with this hearing being live-streamed over the Internet, that a
    premium cigar is one of the few things you can light up and
    enjoy just for relaxation. You can't rush enjoying a cigar.
    You've got to sit down and be able to just take a few minutes
    and slow down and relax, and it's a great way to do that. But
    our consumers, given the hectic pace of life these days, can't
    do that every hour, every day, every week. It's an infrequent
    enjoyment.
        And something else that I really appreciate about premium
    cigars is that they transcend all barriers. If you walk into
    one of Jeff's shops and you pick up a handcrafted premium
    cigar, and you sit down and light it up, it doesn't matter your
    race, your age, your background, your education, your religion;
    everyone is friends. It's a social relaxation tool. It's a way
    to slow things down.
        And the fact that this is a handcrafted product on the team
    in your field, Jeff, who plant the tobacco and grow and harvest
    it and actually cure and age and ferment and sort it and roll
    it and band it and box it, from start to finish, it's all
    handcrafted, and there just aren't many things left in the
    world like that anymore, and that's what makes premium cigars,
    I think, so special and what a great thing to have, to be able
    to continue this tradition for relaxation and celebration.
        Representative Bilirakis. Okay. Let me ask Mr. Borysiewicz,
    are you in the business of non-premium cigars as well?
        Mr. Borysiewicz. No, and that's a great question because
    there are two categories. The large category is volume of
    cigars, what are called mass-market cigars. That's the term in
    our industry. Mass-market cigars are the ones you see in the
    convenience stores, drug stores, usually two in a foil pack.
    Those don't require humidification. You don't have to cut the
    end off of it. It's not a natural wrapper on the outside. The
    outside of that leaf is what's called homogenized tobacco,
    meaning it takes--it's sort of like when you make paper out of
    wood pulp, except you're making the wrapper out of tobacco
    instead of paper.
        So those cigars that are sold in those convenience stores
    and drug stores, that's a big part of the industry when you use
    the general word ``cigar.''
        Premium cigars are the ones that are sold typically by your
    tobacconist in your neighborhood cigar shop. They require to be
    humidified. You need to keep them in a humidor, use a cigar
    cutter to cut the end. They burn usually for 45 minutes to an
    hour-and-a-half. They burn real slow, and the reason being is
    that the wrapper is a whole leaf of tobacco. When I talk to you
    about why it's so expensive to grow tobacco that goes on the
    outside of the cigar, let me tell you, as a farmer it is
    extremely hard to grow a leaf and get it through the entire
    process where a bug doesn't eat a hole in it, where someone
    doesn't put a finger through the wrapper, or it doesn't have a
    stain on it.
        So the wrapper is the most expensive part of the cigar, and
    that's what we call a natural leaf wrapper. It's literally a
    piece of leaf that's wrapped around it. So when you go into a
    cigar shop, we sell only premium, handmade cigars. The folks
    that walk in--first off, you can't compete anyway with a 7-11
    or something like that that sells the mass-market cigars.
    That's a totally different industry. So we're selling premium
    handmade cigars. What I think is interesting is it's two
    totally different customers, two totally different experiences,
    and two totally different prices.
        Representative Bilirakis. What about the health risks? Are
    they the same? Anyone can answer that.
        Mr. Borysiewicz. The other thing is that size is important,
    too. So one of the phenomena that happened in the industry,
    they have these filtered cigars too. They're classified as
    little cigars in the filtered cigar. That's a different product
    too that is not the same as what we call premium cigars. You
    don't inhale a premium cigar, and they're just totally smoked
    for different reasons.
        Dr. Rodu. It's really not about the smoke. It's about how
    they're used. Disease risk is based on dose--that is, how much
    you consume--and duration, how long you do that. Premium cigars
    are just consumed in an entirely different manner than machine-
    made cigars and manufactured cigarettes.
        Mr. Borysiewicz. There's one more clarification I'd like to
    bring up, too. The mass-market cigar category is not driven by
    new brands as much as the handmade cigar. If you walk into our
    cigar store, I literally have over 1,000 different brands, over
    1,000. So when you walk into a 7-11 and you look at the slots
    where the mass-market cigars are, you might see 25. So it's a
    totally different industry. And of the 25 of those mass-market
    cigars, they're generally produced by three companies.
        So that's why I say those guys have the resources and the
    lawyers and everything else to work through that. I mean, they
    still have issues to work with the FDA, but it's totally
    different when you're looking at an industry that sells
    billions of units and there's the money that they can handle
    regulation. The big difference is the premium cigar industry is
    tiny and it cannot handle it financially, and honestly they
    can't figure it out.
        Chairman Rubio. That's important. I'm sorry to interject,
    but the products you just described is what you'd see at a gas
    station, right? I mean, I've seen some gas stations that have
    the humidor, but you're talking about the gas station that has
    a box with three or four what look like cigars, long and thin.
    I don't want to attack any brand, but Dutch Masters or
    something like that, these little things that are out there
    that are mass manufactured, people may think that's what we're
    talking about here.
        Mr. Borysiewicz. That is not what we're talking about.
        Chairman Rubio. What we're talking about here is the
    premium cigar that is sold either as a unit in a box or
    individually in a cellophane wrapper. These are the practical
    things about cigar smoking. If you're not a cigar smoker, you
    don't know. Number one, the time it takes. It does not lend
    itself to quick usage. I mean, it's not like a cigarette that's
    done in X number of minutes. You can't just go out on the
    corner and puff a cigar. Depending on the cigar, and depending
    on how often you puff on it, it could take anywhere from 35
    minutes to an hour-and-a-half, if you're doing it the right
    way.
        Second, these things have to be stored. You can't just put
    them in a box or put them in your pocket. If they're not
    stored, over time, because they're a natural product, it dries
    out. You can't leave them in your car. Not everybody has to
    have one of these expensive humidors, but you can't just leave
    this stuff laying around. So there's care involved in it.
        And that's why I wanted to ask. In your time just in the
    retail side, when was the last time you had someone 17 or 16
    years old come in and try to buy a box of premium cigars for
    themselves?
        Mr. Borysiewicz. I would say it's never happened. For
    example, this box of cigars right here is $250, okay?
        Chairman Rubio. We will have to seize that as well, by the
    way.
        [Laughter.]
        Mr. Borysiewicz. If you're a kid, do you want to spend $20
    on Fortnight or whatever these guys are playing, or do they
    want to go try to buy a premium cigar?
        I'll tell you the other thing that's true, especially in
    our cigar stores. We have such a great group of folks that
    enjoy these cigars, they come from all walks of life. If you're
    a college graduate, sure, go put your profile on LinkedIn. But
    you know what? Go hang out at the cigar shop, because you're
    going to meet some real interesting people there. These are
    folks that own businesses. These are folks that are
    politicians, industry leaders, community leaders.
        I run Corona Cigars. This is a very interesting phenomenon
    that we do, that if a child were to see their father sitting
    outside a Corona Cigar store smoking a cigar, that they
    shouldn't be ashamed. This is an environment where adults are
    gathering, and I call it the modern-day coffee shop, with the
    exception that our customers, instead of sitting there with
    their faces buried in a cell phone or a laptop, they're
    engaging in the lost art of conversation, and that's what goes
    on in the cigar shop.
        So if you even had a kid that came in, that walked in,
    looked like he was a kid, chances are there's probably a
    customer who is going to stop him and say, hey kid, what are
    you doing in here? It's just not the environment for that. This
    is not a 7-11 where you're going in to buy a milkshake or
    whatever, a Slurpee. Cigar shops are a very traditional type of
    business that cater to an adult crowd, and it's just not
    attractive to a kid.
        Chairman Rubio. The statistics bear this out, do they not?
    In studies that were done? Dr. Rodu, they found that among
    youth, the consumption of premium cigars, they couldn't even
    score it.
        Dr. Rodu. That's correct. It's very rare among children.
        Chairman Rubio. You both have been interacting, both from
    the association and individually from business, with the FDA
    and the regulators. All this has been presented to them. What
    have they said to you as justification for this application?
    One of the things they cannot argue, in my view, is that they
    don't have the legislative flexibility to reach a different
    conclusion. They most certainly do. In fact, the regulation
    calls for them to provide the appropriate level of regulation,
    appropriate to the risk of the intention of the law.
        How are they--what is their justification?
        Mr. Newman. Mr. Chairman, we've had the privilege of
    meeting with the FDA many times, met with Commissioner Gottlieb
    and his staff over at the Center as well, and I actually like
    them, and I like the FDA. They make sure that the water we
    drink in bottles is safe and the sandwiches we eat are safe,
    too. And when we've talked to them about premium cigars, we had
    a senior official tell us, well, you're not the problem, we're
    not worried about you, but the agency has limited resources,
    and they've been focusing their resources on other areas, such
    as e-cigarettes, that are of greater concern to them.
        So we've been left in limbo for years waiting for them to
    just recognize that our issue is serious to us and to America's
    handcrafted historic premium cigar industry, and we need
    relief. They just haven't had the capacity or the ability to
    provide the relief that we need.
        Chairman Rubio. But--oh, go ahead. I'm sorry.
        Mr. Borysiewicz. I'd love to add to that, and I don't mean
    this in disrespect, but I've been dealing with this since 2007.
    In my opinion, what's going to happen is we're never going to
    see relief through the FDA, ever. And it's sad, and I'll tell
    you why.
        They understand that we are not the problem. They totally
    understand that. But you have to look at the end game if you're
    working for the FDA. What happens when you leave the agency?
    Who is going to hire you? Big health, big pharma, somebody in
    that realm is going to hire you, a drug company. It will ruin
    your resume if you are the head of the FDA and you exempted
    premium cigars.
        I believe that is our biggest challenge, and that's why we
    have to have somebody from the business sector, whether it's
    OMB, Small Business, Congress, that weighs in and says listen,
    this has to be fixed, because I think if we leave it up to
    them, we're kidding ourselves. That's just my take on the
    situation.
        I've been in many of those meetings. They understand what
    we're doing. They understand what they're doing is--they're
    having a hard time with this. I'm telling you right now, they
    can't figure it out. That's why they're re-issuing these rules.
        I met with FDA at one of our trade shows and explained to
    the lady, who was a senior fellow, by the way, a Ph.D. I took
    the cigar apart. My wife was with me and we showed her exactly
    what it is, the definition of a premium cigar, the wrapper/
    binder/filler, and how they're smoked and everything else, and
    she was absolutely amazed. As a matter of fact, at the end she
    said it sounds like I should try a cigar myself, it's very
    nice.
        But I don't believe it's the individuals. I believe it's
    the system, and that's why we have to have some correction.
    It's not the individuals, but it's the system.
        Chairman Rubio. What you've described is the legislative
    impediment, and that is, number one, some of the things we're
    highlighting here are the reasons why we're having a tough
    time, and that is the overwhelming majority of Americans are
    not premium cigar smokers. So what they know about premium
    cigars is they remember their uncle that used to smoke these or
    what they've seen in movies.
        I had a colleague of mine talk about--made reference to
    pinky rings. I don't know what that has to do with cigars. I
    guess he saw some movie where a gangster had a pinky ring
    smoking a cigar. And my point is that there are a lot of people
    who just don't understand what the product is.
        The second is they don't understand the impact that the
    rules have, and their view of it is, well, it's just notice
    that it could be harmful to your health; what's the big deal? I
    don't think they realize some of the unique attributes of the
    product. Number one, the testing and all that goes into it.
    There's nothing you can comply with. What they're actually
    doing is they're going to leave the whole industry to the
    people who can comply with it, which is the mass producers.
        Number two, part of the overall experience is the
    packaging, and the packaging is not conducive to having a third
    of the entire box be some warning label with a skull and
    crossbones on it, or whatever it may be. Not that people
    wouldn't buy it. The premium cigar smokers aren't going to walk
    away, but just doing it, just producing it in that way would be
    extraordinarily difficult.
        So I think our blessing is our curse in this regard, and
    that is that because not enough people are familiar with the
    premium cigar industry, they're not consumers of it, it's a
    unique niche within the broader sector, it's tough to explain
    it to people. The safe place to be is against anything that has
    to do with smoking and tobacco and everything else.
        And then we have interest groups who do great work on
    getting people to stop smoking, documenting clearly that
    cigarette smoking and tobacco consumption of that kind in
    America is a leading cause of premature death, heart disease,
    cancer of various types. We know that, and the efforts that
    have been put forth by many of these organizations have made a
    tremendous contribution. But many of them feel like there has
    to be a bright line that they are not willing to cross, even
    for something as unique as this, because it could be the
    beginning of a trend to rollback others.
        So that's why we continue to believe that the legislative
    fix reaffirms the true intent of the law, and we've had
    difficulty because of a handful of our colleagues that have
    made it controversial. When you're dealing with 1,000 issues a
    day, it's hard to get people to bear down on this level of
    detail like what we discussed here.
        We're making progress, but it's been difficult. One of the
    resources we tried to use is both manufacturers and the retail
    outlets that are in every state in the country, and that have a
    presence in every state in the country.
        We will continue to work on it because I think what you're
    basically telling us here today is if this rule takes place and
    goes into effect, there are not going to be any premium cigar
    manufacturers, if any, left in the United States, and
    ultimately we're going to have a product that eventually, the
    only way to consume it is to somehow smuggle into the United
    States some product that's made somewhere else where those
    regulations are not required to be put on, and the outlets, all
    the retail outlets that sell it, there's no way they can
    survive. I mean, they won't have any product to sell.
        I don't foresee how, not only on the manufacturing side but
    on the retail side, I just don't know how any of these places
    survive if this goes into effect. Is that Draconian,
    apocalyptic vision, is that really where we're headed in your
    opinion?
        Mr. Newman. Mr. Chairman, you're absolutely right, this is
    what keeps us up at night and worries us. We urgently need
    relief, and we've been in limbo for so long, and if we don't
    get relief, the tradition of handcrafting premium cigars here
    in Florida and America and right here in Ybor City is going to
    go away like a puff of smoke.
        Chairman Rubio. Well, I want to thank all of you here.
    We've almost exceeded the time that we promised, but I do want
    to thank everybody for being a part of this. I want to thank
    all of our witnesses. It's an honor to chair this committee. I
    want to thank Congresswoman Castro for coming today. This is
    her district. I know this is very important to her. She
    sponsored the legislative fix in the House. And to be fair, the
    House has actually done this. It's been on the Senate side that
    we've had some problems, but we continue to work through it. Of
    course I thank my friend, Congressman Bilirakis, for coming
    over to be a part of this hearing as well, and to host it here
    in Ybor City is a very unique place whose entire history is
    tied around this industry and gives character to this
    community.
        So I'm grateful that all of you were able to make it here
    today and the contributions that you've provided. Each of your
    testimonies offered an important perspective. The record that
    was created by this hearing, people said it was only two
    Congress members and a Senator, and they're all with us now, so
    what does it matter. But this record is important. It's what we
    can point to and we can cite to the staffs of other senators
    when we make the push again. We put all of this into the Senate
    record.
        We're going to keep working on this. We're not going to let
    this happen. We're going to do everything we possibly can to
    prevent this from happening because it's one of those things
    that no one understands why it's happening but it's happening
    anyway, and we've got to correct it.
        So the record for this hearing will remain open for two
    weeks in case any of my colleagues on the committee or anyone
    else on the panel wanted to offer any additional statements for
    the record, or questions that may come in from members of the
    committee that were not here today. If they do, we'll forward
    them to you. We ask you to help us over the next few weeks to
    answer those questions. We may have some of our own just to get
    them into the record.
        Again, I want to thank all of you for being here, everybody
    who came.
        Do you have anything to say before----
        Representative Bilirakis. No. I just want to say it's all
    about education, and what I'll do is I'm on the Energy and
    Commerce Committee, so we'll try to see if we can get my
    colleagues to set up--the Chairman, and also the Ranking
    Member, to set up a hearing in the House. This is all about
    education. People want these cigars, no question, and they
    should have a right to have them. That's all.
        Chairman Rubio. Thank you. Thank you so much.
        I ask unanimous consent that the statements for the record
    here today be submitted.
        Since I'm the only one here, there's no objection to that.
        [Laughter.]
        And with that, the hearing is adjourned.
        [Applause.]
        [Whereupon, at 2:35 p.m., the hearing was adjourned.]

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