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


                                                     S. Hrg. 116-48

            KEEPING SMALL, PREMIUM CIGAR BUSINESSES ROLLING

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