Herrera on Cigar Law™

Herrera on Cigar Law™ Returns

2026-10-05T00:00:00Z

Herrera on Cigar Law™ was first published in 2009. It later moved to WordPress, where the last posts date from 2018. They covered FDA's grandfather determinations, a state tax case and the trade shows of the day. Then practice took over, and the blog went quiet.

The law did not. Since 2018, a federal court has carved premium cigars out of FDA's deeming rule and settled the definition that decides which cigars qualify. A Supreme Court decision ended one tariff program, and two others took its place within six months. Cuba policy has tightened twice. Europe has brought cigars into its traceability system and is now debating a much higher minimum excise. Each of those changes reached the businesses I represent in the Dominican Republic, Nicaragua, Honduras, Europe and the United States.

What this blog is for

There is no shortage of cigar news. What is in short supply is careful reading of the law behind it: what a rule actually says, who it reaches, what it leaves out and what a company should do about it. That is the job here.

Every article will follow the same principles:

Primary sources first. Court opinions, Federal Register notices, agency letters and statutes are linked at the end of every piece, so readers can check the work.
Plain language. The audience is the person deciding what to ship, what to file and what to fix, not other lawyers.
A date on everything. The law described in each article is stated as of a specific date, and that date is shown.
A view. Analysis is only useful if it reaches a conclusion. Where the law is unsettled, I will say so and say what I would watch.

Built to stay current

A blog is a poor tool for following issues that change month to month, so this one comes with two others.

The Cigar Law™ Tracker lists the major rules, cases and trade measures that govern premium cigars, with a plain status for each and a link to the analysis behind it. When something moves, the tracker changes first.

Key Dates collects the deadlines and effective dates ahead, from refund windows to tariff increases to EU implementation dates. It is also published as a calendar feed, so the dates can sit in your own calendar and update as the list does.

New analysis and tracker changes go out by email briefing, and the site has full RSS and JSON feeds for readers who prefer them. For video, there is Cigar Court.

Where to start

The launch articles cover the areas that shape the business today:

FDA: the premium cigar exemption after the remand
Trade: the three tariff regimes of 2026
Cuba: what changed on September 30, Helms-Burton after the Supreme Court, Havana Club and COHIBA and the sanctions behind Habanos's ownership
Europe: the coming cigar tax decision
States: the 2026 tax map, lounges, birth-year bans and local flavor rules and the flavor map
Trademarks: lessons from Fuente v. Vaporous

There Is Only One Cigar Law™. It is good to be writing about it again.

Lounges, Birth Years and County Lines: The Other State Fights Over Premium Cigars

2026-10-05T00:00:00Z

State tax rates get the headlines, but some of the laws that matter most to the premium cigar business decide something more basic: where a cigar may be smoked, who may buy one and which ones may be sold at all. The 2026 legislative season moved all three.

Cigar lounges: one win, three losses, one pending

A cigar lounge depends on an exemption from a smoke-free law. States that have none cannot have lounges, and states that grant narrow ones cap how many can exist. That is why lounge bills are among the most consequential premium cigar legislation, even though they rarely make news.

South Dakota enacted HB 1215, signed March 19, 2026. It lets each county license one cigar bar outside city limits, and each city license one plus one more for every 25,000 residents. A licensed bar must earn at least 10% of its revenue from cigars, keep a humidor, meet ventilation standards and hold a liquor license. Sources differ on whether it took effect on signature or on July 1, 2026, but it is law either way.
Wisconsin AB 211 was vetoed in December 2025, and the override attempt failed in May 2026.
Kentucky HB 194 passed the House in February 2026 and died in the Senate.
Alaska passed a bill that would have allowed on-site smoking in qualifying cigar stores, raised the tobacco age to 21 and taxed vapes. The governor vetoed it in June 2026.
Ohio HB 549, which would regulate cigar bars and exempt cigars smoked on premises from sales tax, is pending in the House Ways and Means Committee.

The common thread is that lounge bills are now often bundled with other tobacco policy, such as age limits or vape taxes. That makes them easier to pass in some states and easier to veto in others.

Generational bans reach cigars

A generational ban bars tobacco sales to anyone born after a fixed date, so the group of people who may lawfully buy shrinks every year. It is the most aggressive sales restriction now being proposed in the United States.

In June 2026, a bill was introduced in New York, A.11509, that would permanently bar sales to anyone born after December 31, 2007, and it expressly covers cigars. It is in the Assembly Health Committee. Statewide bills were filed in Massachusetts this session, though none has passed. At the local level, about two dozen Massachusetts towns have adopted birth-year bans since Brookline's took effect in 2021, though recent reporting suggests the pace has slowed.

For premium cigars, the important point is that these laws do not distinguish by product. A generational ban treats a hand-rolled cigar the same as any other tobacco product, which means the exemptions the industry has won elsewhere do not carry over.

Local flavor bans: read the ordinance

Only California and Massachusetts have statewide flavor bans that reach cigars, but local bans are spreading, and courts are letting them stand.

In Oregon, the state Supreme Court held in May 2026 that state law does not preempt Washington County's flavor ban, and in July it declined review in the long-running challenge to Multnomah County's. Denver's flavor ordinance survived a referendum in November 2025, and enforcement began January 1, 2026.

Whether a local ban reaches premium cigars turns on the ordinance text. Denver's ordinance, for example, reaches flavored cigars and pipe tobacco, with an exemption for hookah tobacco sold at hookah retailers. A retailer or distributor selling flavored cigars into any of these markets should read the ordinance itself, and its definitions, before relying on a summary.

California's list is now the law of the shelf

California's flavor law took a new form on January 1, 2026. Under AB 3218, retailers may sell only tobacco products that appear on the Attorney General's Unflavored Tobacco List. Getting a product on the list requires an application, and cigars made up roughly 70% of the first published list. Final regulations were approved in June 2026.

The list changes the burden. Before, the state had to show a product was flavored. Now, a product that is not on the list cannot be sold, whether or not it is flavored. As discussed in The Flavor Map, federal courts have so far declined to block the list on preemption or First Amendment grounds.

For manufacturers and importers: a premium cigar sold in California needs to be on the Unflavored Tobacco List, or exempt under the state's premium cigar definition, product by product. Treat list status the way you treat a label: something checked for every SKU before it ships into the state.

Florida and Georgia

For readers in the Southeast, the 2025 and 2026 sessions were quiet. I found no enacted change to Florida law affecting cigars in either year. Several tobacco and nicotine bills died, including measures on heated tobacco, nicotine products and smoking in public places. In Georgia, no enacted 2025 or 2026 statute affecting cigars has come to light. The Georgia Department of Revenue has proposed amendments to its tobacco rules that would, among other things, address how distributor promotions affect the wholesale cost price used to compute tax, and anyone filing Georgia tobacco returns should follow that rulemaking.

What to watch

Lounge exemptions, generational bans and local flavor rules share a feature: none of them depends on how a cigar is taxed or regulated by FDA. They are fought one legislature and one county commission at a time. The companies that track them closely will see the problem coming. The rest will learn about it from a customer.

The 2026 State Cigar Tax Map: New Caps, a 75% Rate and Remote Sellers in the Crosshairs

2026-10-05T00:00:00Z

For a premium cigar, the most important number in a state tax law is often not the rate. It is the cap. A tax of 45% of wholesale on a cigar that wholesales for $8 is $3.60. With a 75-cent cap, it is 75 cents. Caps are why a premium cigar can be sold at a sensible price in a high-tax state, and they are where the most important fights of the last two legislative seasons have taken place.

Here is the map as it stands in October 2026.

Caps arrive: Illinois and Louisiana

Illinois moved in two steps. Its fiscal 2026 budget raised the tax on cigars and other tobacco products from 36% to 45% of the wholesale price, effective July 1, 2025, and doubled the annual retailer license fee from $75 to $150. A year later, the fiscal 2027 revenue package went the other way for cigars: beginning January 1, 2027, the tax on a cigar is capped at $0.75. The cap does not apply to little cigars, and as enacted it runs through the end of 2029.

The same Illinois law reaches remote sellers. Beginning in 2027, a seller with $100,000 or more in sales into Illinois must hold an Illinois license, collect the tax and report periodically to the Department of Revenue. For online and catalog retailers, that is as significant as the cap.

Louisiana adopted a tiered structure in HB 325, signed in June 2025 and effective January 1, 2026. Cigars invoiced at 12 cents or less continue to pay 8%, cigars above 12 cents and under $2.50 pay 20%, and cigars at $2.50 or more pay a flat 50 cents. The change sunsets December 31, 2027, and the prior rates return on January 1, 2028 unless the legislature acts. A Louisiana distributor pricing for 2028 should plan for both outcomes.

Increases without a cap: Maine and Indiana

Maine raised its tax on other tobacco products from 43% to 75% of the cost price, effective January 5, 2026. Maine Revenue Services' bulletin describes no per-cigar cap, and no floor-stock tax applies to these products. At 75% of cost with no cap, Maine now sits among the most expensive states in the country for a premium cigar.

Indiana raised its rate from 24% to 30% of wholesale and raised its per-cigar cap from $1 to $3, effective July 1, 2025. The Indiana change is a reminder that a cap only protects as far as its level. A $3 cap reaches far more of the premium shelf than a $1 cap did.

The remote seller wave

Three states have now written remote sellers of cigars directly into their laws, all effective in 2027:

Nebraska LB 212, approved in February 2026 and effective January 1, 2027, requires remote sellers of cigars and pipe tobacco above $100,000 in sales or 200 transactions to license, collect the state's 20% tax and file monthly. An earlier draft would have capped the tax at 50 cents per cigar, but the cap does not appear in the Department of Revenue's summary of the law as enacted.
Illinois, as described above, adds remote seller licensing and collection from 2027.
Utah HB 447 (2026), effective January 1, 2027, licenses remote sellers of cigars and pipe tobacco, with bonding, age verification and reporting requirements, opening a legal path for online cigar sales into the state.

The direction is clear. States that once relied on consumers to self-report use tax on mail-order cigars are now putting the obligation on the seller, using the same economic thresholds familiar from sales tax since the Wayfair decision.

Licensing and supply chain rules

Tax is not the only cost. Three 2025 and 2026 changes affect who may sell and who may supply:

Pennsylvania Act 57 of 2025 requires retailers to buy tobacco products only from licensed wholesalers, and requires manufacturers selling other tobacco products directly to retailers to hold a wholesaler license. It took effect February 20, 2026.
Vermont raised its tobacco license renewal fee from $110 to $1,000, effective July 1, 2026, as part of a broader tobacco bill.
Virginia created a retail tobacco permit administered by Virginia ABC and required from October 1, 2026. Stores that sell only cigars or pipe tobacco are exempt, a carve-out worth knowing for dedicated tobacconists.

What failed, and what is still pending

Some of the most important results of 2026 are bills that did not pass:

Washington ESSB 6129 would have eliminated the state's 65-cent cap, leaving cigars taxed at 95% of the taxable sales price. It passed the Senate but did not pass the legislature, and the cap remains.
Rhode Island removed a proposal to raise its per-cigar cap from 50 cents to $2.00 before the fiscal 2027 budget was signed.
Delaware HB 215, which would have created a premium cigar category with its own rate, did not pass.

Still pending or unresolved: bills in New Jersey and West Virginia would sharply raise cigar rates. I have not been able to confirm their current status, and they should be watched.

The pattern. Legislatures are treating premium cigars and mass-market products differently more often than they did a decade ago, through caps, tiers and premium definitions. But each state defines the category in its own way, and several of the new protections expire. A cap that sunsets is a temporary price, not a permanent one.

What to do with this

For manufacturers and distributors, I would check three things in every state that matters to your volume: whether a cap exists and when it expires, how the state defines the products the cap protects, and whether your remote sales now create a licensing and collection duty. For retailers, the remote seller rules cut both ways. They impose new compliance duties on online sellers, and they narrow the price gap between a local shop and an out-of-state website.

State cigar tax law used to change slowly. It does not anymore, and the Cigar Law™ Tracker will follow the bills above as they move.

The Flavor Map: Two States, One Exemption and a Tax Trend to Watch

2026-10-05T00:00:00Z

In 2022, FDA proposed a product standard that would have banned characterizing flavors in all cigars nationwide. In January 2025, the final rule was pulled from review at the Office of Management and Budget, and the Unified Agenda later listed the proposal as withdrawn. It was never finalized.

That ended the federal flavor ban, for now. It did not end flavor regulation. The action has moved to the states, and the two states that have acted show how much the details matter.

California: a ban with a premium exemption

California's statewide restriction on flavored tobacco took effect December 21, 2022 and was amended effective January 1, 2025. It prohibits retail sale of flavored tobacco products and tobacco product flavor enhancers, and the 2025 amendments reached distributors and products with a cooling sensation. It exempts premium cigars that meet the statute's definition, which includes a minimum wholesale price of $12 per cigar. It also exempts loose-leaf pipe tobacco, and allows shisha only in licensed stores that admit no one under 21.

The exemption is narrower than it sounds. It turns on the state's definition, not FDA's or the federal court's, and a flavored cigar must satisfy every part of it. A product that is premium by reputation, or that qualifies under some other test, is not automatically exempt in California.

The law has also survived its first major challenge. In Rocky Patel Premium Cigars, Inc. v. Bonta, the Central District of California denied a preliminary injunction against the state's Unflavored Tobacco List, kept under Health and Safety Code section 104559.1, in December 2025, finding the preemption and First Amendment claims unlikely to succeed. The Ninth Circuit affirmed on August 27, 2026.

Massachusetts: no premium exemption

Massachusetts has restricted flavored tobacco statewide since June 1, 2020. Its law has no premium cigar exemption. The only carve-out is for on-site consumption at licensed smoking bars, so outside those bars a flavored premium cigar is treated the same as any other flavored tobacco product.

Everyone else

According to the most recent survey by the Campaign for Tobacco-Free Kids, dated May 2026, no other state has a statewide flavor restriction that reaches cigars. Several states, including New Jersey, New York, Rhode Island and Utah, restrict flavored e-cigarettes only. Local rules are a different matter: cities and counties in many states have their own flavor restrictions, and some of them reach cigars. A company selling flavored cigars nationally needs a local map, not just a state one.

The definition problem. There is no single definition of a premium cigar in American law. FDA's court-approved definition excludes every flavored cigar. California's definition can include a flavored cigar that meets its price and construction tests. Other states define premium cigars for tax caps in their own ways. Compliance has to be checked against each jurisdiction's text.

The tax side

Flavor bans get the attention, but taxes do more damage over time. Two recent examples:

Indiana raised its tax on cigars from 24% to 30% of the wholesale price and the per-cigar cap from $1 to $3, effective July 1, 2025.
Washington extended its other tobacco products tax to synthetic and other nicotine products from January 1, 2026, while leaving the cigar rate at 95% with a per-cigar cap of 65 cents.

Per-cigar caps are the premium industry's most important protection at the state level. According to Cigar Rights of America, eighteen states have a cap on premium cigar taxes. Where a cap exists, a rate increase hurts most at lower price points. Where a cap rises, as it did in Indiana, the increase reaches the premium shelf directly.

At the federal level, the End Tobacco Loopholes Act, introduced in March 2025, would sharply raise federal cigar excise rates and index them to inflation. It has seen no action since referral.

What to watch

The withdrawal of the federal flavor proposal makes state action more likely, not less, because it leaves the field to the states. For premium manufacturers and retailers, three things are worth tracking:

New state or local flavor bills, and above all how each one defines a premium cigar.
Proposals to raise or remove per-cigar tax caps, which matter more to premium sellers than headline rate changes.
Further litigation over state flavor lists, including the merits stage of Bonta.

The federal question is settled for the moment. The state questions are just getting started.

One Letter, Two Products: What Fuente v. Vaporous Teaches About Cigar Marks

2026-10-05T00:00:00Z

Fuente owns registrations for the letter X in standard characters, covering cigars and accessories such as ashtrays, cutters and lighters. When a vaporizer company applied to register a design mark consisting of an X with a dot above it, for oral vaporizers, Fuente opposed. The Trademark Trial and Appeal Board dismissed the opposition, and on April 8, 2026, in a precedential opinion by Judge Hughes in Fuente Marketing Ltd. v. Vaporous Technologies, LLC, the Federal Circuit affirmed.

What makes the case worth studying is that Fuente won several of the arguments and still lost.

What the Board found

Likelihood of confusion is decided under the factors from In re E. I. du Pont de Nemours & Co. The Board's findings on the main ones came out this way:

Trade channels and customers favored Fuente. The Board found that vapes and cigars move through overlapping channels and reach some of the same customers, with vapes seen as an alternative to cigars.
Strength was neutral. The letter X is arbitrary for cigars, which made Fuente's mark conceptually strong. But on the record before the Board, its commercial strength, meaning recognition in the marketplace, was limited. The two offset each other.
The marks weighed heavily against confusion. The Board found that consumers would perceive the X with a dot as a stick figure rather than as the letter X. That gave the two marks different commercial impressions and different sounds.

What the Federal Circuit held

Fuente argued that the marks were similar, that the Board treated a stipulation between the parties about how consumers perceive the applicant's mark as dispositive, that it undervalued the conceptual strength of the X marks, that it failed to resolve doubt in favor of the senior user and that it did not explain its overall weighing. The court held that any treatment of the stipulation as dispositive was harmless error, because the Board reached its conclusion on independent evidence, and it found substantial evidence for the Board's conclusions.

The key holding is a restatement of a principle that brand owners sometimes forget: a single du Pont factor may be dispositive, especially when that factor is the dissimilarity of the marks. Related goods and shared customers do not create a likelihood of confusion between marks that consumers do not see as alike.

Lesson one: perception decides what a mark is

The applicant's design was built from the same letter. The case turned on the finding that buyers would not read it as a letter at all. For anyone clearing a logo, monogram or symbol, the question is not what the design is made of but what the market will take it to be. A search that only asks "does this use an X" asks the wrong question, in both directions.

Lesson two: strength must be proved

A distinctive mark is not the same as a strong one in litigation. Commercial strength is a question of evidence: sales, advertising, unsolicited press, survey results and the other proof that shows the public actually knows the mark. A senior user that expects to rely on the strength of its mark in an opposition should be building that record years before the dispute, not after the notice of opposition is filed.

Lesson three: be careful what you stipulate

Stipulations make TTAB proceedings faster and cheaper, and they are often sensible. A stipulation about how consumers perceive a mark, though, goes to the heart of the likelihood of confusion question, and in this case it became a central issue on appeal. The error was harmless only because other evidence supported the same finding. Before agreeing to a stipulated fact about how the public sees a mark, a party should assume it may be treated as decisive.

For senior users: the case does not mean that cigar marks cannot reach vapes or other adjacent goods. The Board found the goods related. It means that the reach of a mark depends on the similarity of what the consumer actually sees, and on proof of how well the mark is known.

The cost of a sloppy application

The procedure has changed too. The USPTO's fee rule that took effect January 18, 2025 replaced TEAS Plus and TEAS Standard with a single base application at $350 per class, and added surcharges for incomplete or improvised filings:

Item	Fee per class
Base application	$350
Insufficient information surcharge	$100
Free-form identification of goods instead of a pre-approved entry	$200
Each additional 1,000 characters in a free-form identification	$200

For cigar companies, the identification of goods is where those surcharges tend to appear. The USPTO's ID Manual already contains entries for cigars, cigarillos and many accessories. Using those entries, and writing new language only when there is a real reason, keeps the cost down and the scope clear.

Foreign manufacturers should also remember that since 2019 the USPTO has required trademark applicants and registrants domiciled outside the United States to be represented by a U.S.-licensed attorney. For factories in the Dominican Republic, Nicaragua, Honduras and Europe that file in their own names, that rule applies to every application and every post-registration filing.

The takeaway

A cigar brand's mark is protected by what the public sees and what the owner can prove. Shared channels and a distinctive letter were not enough here. The design on the other side, as consumers would perceive it, decided the case.

Europe's Cigar Tax Question Is No Longer Whether, but How Much

2026-10-05T00:00:00Z

For most of the last two decades, the European Union's minimum excise on cigars was low enough that it rarely decided anything. National rates did the work, and many member states set them well above the floor. That is about to change. The EU is rewriting its tobacco tax and product rules at the same time, and for the first time in a long while, the floor itself is in play.

The excise proposal

On July 16, 2025, the European Commission proposed a revision of the Tobacco Excise Directive. For cigars and cigarillos, the current minimum is 5% of the retail selling price or €12 per 1,000 items. The Commission proposed raising it to 40% of the retail price or €143 per 1,000 items or per kilogram, applying from 2028 with transitional periods.

That is not a modest adjustment. Measured by the per-unit amount, the proposed minimum is roughly twelve times the current one.

The compromise text

Tax legislation in the EU requires unanimity in the Council, which makes it slow and makes compromise likely. Under the Cyprus Presidency, a compromise text dated May 29, 2026 brought the cigar minimum down to 30% of retail price or €80 per 1,000 items, phased in through lower transitional rates from January 1, 2028 and fully applicable from 2032.

The same text would treat cigarillos that resemble cigarettes, meaning those with a paper covering, as cigarettes for tax purposes. That is a significant line for anyone selling small, cigarette-format products in Europe, because cigarette minimums are far higher than cigar minimums.

The item was withdrawn from the June 12, 2026 ECOFIN agenda without agreement. As far as the public record shows, the file has not been settled since.

Why a minimum matters even where national taxes are high. An EU minimum binds only where a member state's current rate falls below it. The markets that feel this first will be the ones with low cigar taxes today, which are often the markets where premium cigars are most affordable relative to income. Exporters should map their volume by country against both the Commission's number and the compromise number.

The Tobacco Products Directive is next

The excise directive sets taxes. The Tobacco Products Directive sets rules for the products themselves: ingredients, labeling, reporting and more. The current directive dates from 2014.

The Commission published its evaluation of that directive on April 2, 2026. A call for evidence closed June 15, 2026, and a public consultation closed August 14, 2026 with about 80,000 responses. The Commission has said it will propose revisions to the Tobacco Products Directive and the Tobacco Advertising Directive by the end of 2026. No legislative proposal has been tabled yet, so there is no text to analyze. There is, however, a clear signal that product rules and tax rules are moving together.

Traceability is already here

One part of the EU regime is no longer a proposal. Cigars and cigarillos came into the EU tracking and tracing system on May 20, 2024, under Article 15 of the 2014 directive and its implementing regulation. Every unit packet placed on the EU market needs a unique identifier, and movements through the supply chain must be recorded.

Products manufactured or imported before May 20, 2024 without identifiers could stay in free circulation for two years. That period ended May 20, 2026. Any remaining stock without identifiers is now out of compliance.

For a factory in the Dominican Republic or Nicaragua that ships to a European importer, traceability is not only the importer's problem. The economic operator identifiers, the facility identifiers and the data that move with each shipment start at the factory door. So do the EU-CEG product submissions that must be in place before a cigar is placed on the market in each member state.

Planning for 2028

None of the excise numbers is final, and a unanimity file can stall for years. But a company that waits for a final text will have very little time to adjust prices, formats and distribution before 2028. Here is how I would plan:

Model two scenarios. Price each European market under the Commission's proposal and under the May 2026 compromise, and see where the floor would bite.
Look hard at format. If paper-covered cigarillos are taxed as cigarettes, small-format products may need to be redesigned or withdrawn from some markets.
Fix traceability now. Stock without unique identifiers is already noncompliant, and any gap in the factory's own identifiers will slow every shipment.
Keep EU-CEG current. Product registrations should match what is actually being shipped, country by country, so a regulatory change does not also become a registration problem.
Watch the Tobacco Products Directive proposal. When the Commission tables it, the definitions will matter as much as the rules, because they decide which products the rules reach.

Europe has long been the premium cigar's second home. The coming rules will not change that, but they will change what it costs to be there, and which companies are ready for it.

Cuba After September 30: What Changed for the Cigar Trade, and What Did Not

2026-10-05T00:00:00Z

Every change to the Cuba rules sends a wave of questions through the cigar business, and September 30, 2026 was no exception. That day, OFAC published amendments to the Cuban Assets Control Regulations at 31 CFR Part 515 and, separately, a new set of Cuba Sanctions Regulations at 31 CFR Part 516. Both took effect immediately.

The two rules carry out a policy direction set in 2025 and expanded by Executive Order 14404 on May 1, 2026. Reading them closely, the pattern for our industry is clear: the government tightened money flows and travel, created new blocking authority, and did not touch the parts of the regulations that matter most to brand owners.

What changed in Part 515

The Cuba Restricted List now reaches indirect dealings. The State Department's Cuba Restricted List identifies entities tied to the Cuban military, intelligence and security services. Before September 30, the prohibition centered on direct financial transactions with listed entities. The amended rule adds "or indirect" to that prohibition and to many general licenses. A transaction that reaches a listed entity through an intermediary is now squarely within the ban.

U-turn transfers are gone. U.S. banks could previously process certain funds transfers that passed through the U.S. financial system on their way between parties outside the United States. That authorization was eliminated. Banks may only reject those transfers now.

Accounts for Cuban entrepreneurs were withdrawn. The authorization for U.S. banks to maintain accounts for Cuban independent entrepreneurs was removed, and existing accounts must be blocked.

Travel narrowed. The general license for professional meetings in Cuba was removed, with a wind-down for travelers through October 30, 2026. Educational travel outside the programs of accredited U.S. institutions now generally requires a sponsoring organization and an accompanying representative, and group people-to-people travel is no longer authorized. Educational and people-to-people trips for which a travel-related transaction was completed before September 30 remain authorized.

The new Part 516

Part 516 is a separate program. It authorizes the designation and blocking of persons found to operate in specified sectors of the Cuban economy, including energy, defense, metals and mining, financial services and security, along with certain officials and others. The rule states that no license under Part 515 authorizes anything Part 516 prohibits. GAESA, the Cuban military conglomerate, was designated under the May executive order on May 7, 2026.

For a U.S. company, the practical effect is that a Part 515 license is no longer the end of the analysis. A transaction that is authorized under the old program can still be blocked if it touches a person designated under the new one.

What did not change

The trademark licenses. Sections 515.527 and 515.528, the provisions that authorize transactions related to registering and renewing trademarks, were not amended. That includes the path for U.S. persons to protect their own marks in Cuba, whether through a Madrid Protocol designation or a national filing with OCPI, the Cuban industrial property office. For brands with Cuban heritage, or that expect to sell in Cuba someday, that door remains open.

The import ban. Neither the rule nor OFAC's alert addresses imports of Cuban-origin cigars or tobacco. The prohibition on bringing them into the United States is unchanged, including for travelers.

The basic shape of the embargo. The new rules adjust money flows, travel and designations. They do not reopen trade.

One thing I could not confirm. I found no public source placing Habanos S.A. or Cubatabaco on the Cuba Restricted List or designating either under Part 516. Anyone with a transaction that touches the Cuban tobacco monopoly should check the current lists on the day of the transaction, not rely on an article, including this one.

The trademark front: COHIBA and the long tail of Section 211

The most important Cuban cigar case in a generation is still unresolved. In December 2022, the Trademark Trial and Appeal Board cancelled General Cigar's U.S. registrations for COHIBA, applying Article 8 of the Inter-American Convention for Trademark and Commercial Protection, a 1929 treaty that lets the owner of a mark protected in one member country challenge a later registration in another. On May 7, 2025, Judge Brinkema in the Eastern District of Virginia affirmed the cancellation and dismissed General Cigar's complaint with prejudice, also holding that the embargo regulations do not bar it. General Cigar appealed to the Fourth Circuit, where the appeal has been argued. No decision has been reported.

General Cigar has said its registrations remain valid while the appeal is pending and that it holds common law rights in COHIBA through its long use. Whatever the Fourth Circuit does, the case has already shown that an old treaty can do work that ordinary U.S. trademark doctrine cannot.

Congress has pushed in the other direction. Section 211 of the 1998 omnibus appropriations act bars U.S. courts from recognizing certain rights in marks connected to property confiscated by the Cuban government without consent of the original owner. The No Stolen Trademarks Honored in America Act, signed December 1, 2024, extends that rule by its terms to executive branch agencies, including the USPTO, where the person knew or had reason to know of the connection to confiscated property. How those two currents meet in a case like COHIBA is one of the open questions in this field.

What this means for cigar companies

For most U.S. cigar companies, September 30 changes compliance more than strategy. The checks get harder: the indirect-dealing rule and the new Part 516 designations both reward knowing exactly who is on the other side of a transaction, and who stands behind them.

For brand owners, the message is different. The rules that protect trademark activity were left in place through two rounds of tightening. A company whose brand trades on Cuban heritage should treat Cuba as a trademark jurisdiction like any other: one where protection comes from registration, and where a gap in protection today becomes a dispute later. The COHIBA litigation is a reminder of how long those disputes can last.

Who Owns Habanos? How a Sanctions Designation Reached the Premium Cigar Supply Chain

2026-10-05T00:00:00Z

Habanos S.A. is the company that markets and distributes Cuban cigars around the world. Half of it belongs to the Cuban state. The other half has changed hands more than once, and in 2026 the question of who holds it became a sanctions problem for companies that never sell a Cuban cigar.

How the stake moved

For years, the non-Cuban half of Habanos belonged to Altadis, the Franco-Spanish tobacco group that Imperial Brands acquired in 2008. In 2020, Imperial completed the sale of its premium cigar business, including that stake, to Asian investors operating through a holding company called Allied Cigar.

Reporting since then has traced control of a large part of that structure to Chen Zhi, the founder of Cambodia's Prince Group. According to halfwheel's account of the ownership chain, a British Virgin Islands company called Simply Advanced Limited, wholly owned by Chen, held a majority of an Allied Cigar fund, which in turn controlled the Spanish company that owns cigar factories and a 28.55% stake in Habanos.

The designation

On October 14, 2025, the U.S. Treasury and the United Kingdom announced coordinated action against Prince Group, describing it as a transnational criminal organization behind large-scale online fraud. Treasury designated Chen Zhi under Executive Order 13581. Federal prosecutors also unsealed an indictment against him. Treasury's announcement did not mention cigars or Habanos, and later reporting found that, among the companies in the cigar ownership chain, only Simply Advanced Limited appeared on OFAC's list.

Chen was arrested in Cambodia and extradited to China in January 2026. The European Union listed him in July 2026, and a Habanos distributor serving Germany, Austria and Poland reportedly suspended operations because of the banking restrictions that followed. Talks over a sale of the stake have been reported but, as far as I can tell, not concluded.

Why a listing reaches companies that are not listed

The mechanism is OFAC's 50 Percent Rule. Under OFAC guidance, any entity owned 50% or more, directly or indirectly, individually or in the aggregate, by one or more blocked persons is itself treated as blocked, whether or not it is named on any list. U.S. persons must treat its property as blocked and may not deal with it absent authorization.

That rule turns ownership percentages into compliance questions. A U.S. company buying cigars from a Dominican or Honduran factory has to ask not only who owns the factory, but who owns the owner, and whether the blocked interests add up to half or more somewhere up the chain. Where the percentages are not fully public, the honest answer may be that the company cannot be sure.

That appears to be the situation Altadis U.S.A. faced. According to halfwheel's reporting, Altadis stopped buying from the Tabacalera de García factory in the Dominican Republic and the Flor de Copán factory in Honduras after the designation, describing the move as a compliance-driven decision, and shifted production to other manufacturing partners. The reporting said it expected no inventory problems in 2026.

Two sanctions regimes, one product. A Cuban cigar is already off limits to U.S. persons because of the embargo. What this episode shows is that a non-Cuban cigar can become off limits too, not because of where it was made, but because of who ultimately owns the company that made it.

The wider damage

The Cuban side of the business is under strain for other reasons too. Habanos reported record sales of $827 million for 2024. The Festival del Habano, where results are normally announced, was postponed in February 2026 and then cancelled in July, with reporting citing blackouts, fuel shortages and canceled flights. Harvests in Pinar del Río have suffered when blackouts stopped irrigation. The ownership turmoil adds a financial problem to an operational one.

What U.S. cigar companies should take from this

The lesson is not limited to Habanos. Premium cigar ownership has become more international and more layered, with private equity, family offices and foreign holding companies at different levels of the same supply chain. A sanctions designation anywhere in that structure can reach a factory, a distributor or a brand without warning.

These are the questions I would build into supplier and partner diligence:

Who are the ultimate beneficial owners of each factory and distributor you rely on, and in what percentages?
Do any of them, alone or together, hold 50% or more of an entity in your chain?
Do your contracts give you the right to suspend or terminate if a counterparty or its owner becomes blocked, and do they require prompt notice of ownership changes?
Is there a second source for your most important lines if one factory becomes unavailable overnight?

The embargo taught the cigar trade to ask where a cigar comes from. 2026 added a second question: who stands behind the company that made it.

Havana Club Leaves the Register, COHIBA Waits on the Fourth Circuit: Cuban Marks in the United States After 2026

2026-10-05T00:00:00Z

Two of the most famous Cuban brands in the world have spent decades in American courts. In 2026, both reached a turning point within a few months of each other, and the lessons apply to every brand owner with a Cuban connection.

Havana Club: a win in court, then a lapse

The Havana Club dispute between Bacardi and Cubaexport, the Cuban state export company, goes back to the 1990s. Its modern chapter turned on a renewal. In 2006, Cubaexport could not pay the U.S. registration renewal fee because OFAC refused to license the payment, and for years the registration looked lost. In 2016, OFAC issued a license, the payment was accepted and the USPTO treated the registration as renewed. Bacardi challenged that decision.

On June 16, 2026, the Fourth Circuit affirmed in Bacardi & Co. v. U.S. Patent and Trademark Office, holding that the 2016 license validated the earlier renewal payment. On its face, Cubaexport had won.

Then came the next deadline. A U.S. registration must be maintained with a declaration of use under Section 8 and a renewal under Section 9 at each ten-year anniversary, with a grace period after each deadline. According to the USPTO's own records, Registration No. 1031651 for HAVANA CLUB, first registered in 1976, was cancelled on August 7, 2026 because the registrant did not file an acceptable Section 8 declaration.

What happened is not yet public. I have not found a report of whether Cubaexport tried to file, whether a license was sought or refused, or whether the 2024 No Stolen Trademarks Honored in America Act played any role. Commentators had argued before the deadline that the new law would bar the next renewal. Whatever the reason, the registration that survived a twenty-year fight did not survive its maintenance cycle.

The general lesson. A trademark can be won in litigation and lost in maintenance. For any owner, but especially one whose filings need a government license to pay a fee, the docket of maintenance dates is as important as the docket of the court.

COHIBA: the Inter-American Convention on appeal

The COHIBA dispute runs the other way. Cubatabaco, the Cuban state tobacco company, persuaded the Trademark Trial and Appeal Board in December 2022 to cancel General Cigar's U.S. COHIBA registrations under Article 8 of the 1929 Inter-American Convention, a treaty that lets the owner of a mark protected in one member country challenge a later registration in another. In May 2025, the Eastern District of Virginia affirmed and dismissed General Cigar's complaint with prejudice, also holding that the Cuban embargo regulations do not bar the cancellation.

General Cigar appealed. The Fourth Circuit heard argument on September 16, 2026 in No. 25-1645, before Judges Gregory, Thacker and Quattlebaum. General Cigar's arguments for reversal include the embargo and issue and claim preclusion from earlier rounds of the litigation. No decision has been reported.

The new statute in the background

In December 2024, Congress enacted the No Stolen Trademarks Honored in America Act. It extends the rule of Section 211 of the Department of Commerce and Related Agencies Appropriations Act, 1999, enacted in the October 1998 omnibus act, which barred U.S. courts from recognizing certain rights in marks connected to confiscated Cuban businesses, to agencies of the executive branch, including the USPTO, where the person asserting rights knew or had reason to know of the connection.

How the USPTO will apply that statute is still an open question. I have not found examination guidance or a rule implementing it. Its effect on any particular Cuban mark will depend on the facts of that mark's history, which is exactly the kind of record that decades-old disputes are made of.

What this means for cigar brand owners

The two cases point in different directions on the merits, but they agree on method:

Maintenance is substance. Section 8 and Section 9 deadlines, and the grace periods after them, decide whether a registration exists. Owners who need a license to pay fees must build that time into the calendar.
Treaties matter. The Inter-American Convention gave Cubatabaco a remedy that ordinary U.S. trademark doctrine might not have. Owners with brands rooted in Latin America should know which treaties apply between the countries where they sell.
History is evidence. Under Section 211 and the 2024 Act, the story of how a mark came to be owned can decide whether it is recognized. Keep the chain of title, and the history behind it, documented.

The Cigar Law™ Tracker will record the Fourth Circuit's COHIBA decision when it comes.

Helms-Burton Wakes Up: What Havana Docks and Exxon Mean for Anyone Who Touches Confiscated Cuban Property

2026-10-05T00:00:00Z

The Cuban Liberty and Democratic Solidarity Act of 1996, known as Helms-Burton, gave U.S. nationals whose property was confiscated by the Cuban government a right to sue anyone who "traffics" in that property. That is Title III. Every president suspended the right to sue from 1996 until May 2019, when the suspension was allowed to lapse. Lawsuits followed, and for several years lower courts trimmed them back.

In 2026, the Supreme Court decided two Title III cases, and both came out in favor of the plaintiffs. For a cigar industry with deep roots in pre-revolutionary Cuba, that deserves attention.

Havana Docks: the property, not just the plaintiff's interest

Havana Docks Corporation held a concession to operate docks in Havana harbor before they were confiscated in 1960. Decades later, cruise lines carried passengers to Cuba and used those docks. The cruise lines argued that Havana Docks' concession would have expired in 2004 anyway, so there was nothing left to traffic in when the cruises sailed.

On May 21, 2026, the Supreme Court rejected that argument by a vote of eight to one, in an opinion by Justice Thomas. The Court held that the "property which was confiscated" can be the docks themselves, not only the plaintiff's time-limited interest in them, and that the cruise lines' use of the docks satisfied that element of the statute, so the use was trafficking if done knowingly and intentionally. The Court did not address the statute's exception for lawful travel and remanded for further proceedings.

The practical meaning is that the age of a confiscation and the terms of a plaintiff's old interest no longer cut off a claim as easily as defendants had hoped.

Exxon: Cuban state entities can be sued

Five weeks later, on June 23, 2026, the Court decided Exxon Mobil Corp. v. Corporación CIMEX. The question was whether a plaintiff suing a Cuban state agency or instrumentality under Title III also has to fit the case into an exception under the Foreign Sovereign Immunities Act. By six to three, in an opinion by Justice Kavanaugh, the Court held that Title III itself removes their immunity.

There are real limits. Immunity from execution, meaning the ability to collect a judgment against state property, remains a separate barrier. And commentators have noted that only a handful of the more than five thousand claimants certified by the Foreign Claims Settlement Commission have sued Cuban state entities. But the door is open wider than it was in May.

A cigar case: Rodriguez v. Imperial Brands

The cigar trade has already seen what a Title III suit looks like. Heirs of Ramón Rodríguez Gutiérrez, whose company's Havana factory was confiscated in 1961, sued Imperial Brands, WPP and related companies over the marketing of cigars made at that property between 2010 and 2020. Reports describe the property differently, so I will not characterize it beyond what the court said.

On July 23, 2026, the Eleventh Circuit affirmed dismissal of the case for lack of personal jurisdiction over the foreign defendants, applying the Supreme Court's 2025 decision in Fuld v. Palestine Liberation Organization and a Fifth Amendment reasonableness analysis.

That result points to the limit that matters most. Title III's reach depends on the defendant. A company that does business in the United States, and that a court can reach, faces a statute the Supreme Court has now read broadly. A foreign company with no U.S. presence may be beyond the court's power regardless of what it did with Cuban property.

Why this matters for cigar companies. Many of the industry's most famous brands trace their history to Havana factories, farms and warehouses confiscated after 1959. Title III liability attaches to trafficking in confiscated property, not to the use of a brand name as such. But a U.S. company that sources from, markets, or partners with businesses using confiscated Cuban property should treat the history of that property as a diligence question.

What to ask now

For U.S. companies that deal with Cuba directly or indirectly, these are the questions I would want answered before entering a new relationship:

Is any property involved, such as a factory, farm, warehouse, port or hotel, one that was confiscated after 1959?
Is there a certified claim on that property, or a U.S. national who could bring one?
Does the proposed activity fit any statutory exception, including lawful travel?
Where could the company be sued, and does it have contacts that would let a U.S. court reach it?

Title III was written in 1996 and woke up in 2019. After 2026, it is no longer a sleeping statute.

The Line Holds: Premium Cigars and FDA After the Remand

2026-10-05T00:00:00Z

When FDA's deeming rule took effect in 2016, it brought every cigar, from a gas-station cigarillo to a hand-rolled Dominican corona, under the same federal tobacco regime. The industry sued that summer. A decade later, the result is a clear line between premium cigars and everything else. It is the most important change in the federal regulation of cigars since the deeming rule itself, and it deserves a careful reading.

How we got here

The Cigar Association of America and its co-plaintiffs filed suit in the District of Columbia in July 2016. In July 2022, Judge Amit Mehta held that FDA had acted arbitrarily and capriciously when it applied the deeming rule to premium cigars, because the agency had not adequately grappled with the record on how premium cigars are actually used. On August 9, 2023, he chose the remedy: the deeming rule was vacated as applied to premium cigars. If FDA wants to regulate them, it has to start over with a new rulemaking.

FDA appealed. On January 24, 2025, the D.C. Circuit affirmed the vacatur but sent one issue back: the definition of a premium cigar. After rehearing was granted in part, the court reissued its opinion in March 2025, affirming in part, reversing in part and remanding. The opinion treats the vacatur as prospective, a point that matters for the money discussed below.

The eight elements

On April 15, 2026, Judge Mehta resolved the remand. He kept the definition FDA had been using since 2020, which the agency itself supported. To be a premium cigar, a product must meet every one of these elements:

It is wrapped in whole tobacco leaf.
It has a binder made of 100% leaf tobacco.
At least 50% of the filler, by weight, is long filler tobacco.
It is handmade or hand rolled.
It has no filter, nontobacco tip or nontobacco mouthpiece.
It has no characterizing flavor other than tobacco.
It contains only tobacco, water and vegetable gum.
It weighs more than 6 pounds per 1,000 units.

A cigar that misses any one element is not a premium cigar for this purpose, however expensive or well made it is.

What the court declined to do

The Cigar Association of America asked for more, while its co-plaintiffs Cigar Rights of America and the Premium Cigar Association supported the existing definition. CAA's alternative would have reached flavored premium cigars and some made with machine assistance. The court said no, reasoning that any refinement of the definition should come through rulemaking rather than a judge's pen.

That is a significant result for the flavored segment and for factories that use machines for bunching or other steps. Those products remain fully deemed. They still need marketing authorization through substantial equivalence or a premarket application, still pay user fees and still sit within the registration and listing rules.

No notice of appeal of the April decision has been reported.

The money question

Premium manufacturers and importers paid FDA user fees for years under a rule that has now been vacated as to their products. Whether they get that money back is a separate fight.

FDA's position is stated in its own letters. For fiscal year 2026, the agency says it does not intend to assess user fees on premium cigars for the fiscal year and does not intend to refund payments for quarters before the August 2023 order. Its invoices are still calculated on total cigar volume, because the excise tax data FDA relies on does not separate premium from non-premium cigars. FDA has said companies may dispute an invoice within 45 days and may withhold the premium portion if they document it, and that it will use enforcement discretion on penalties for properly documented withholding.

Nine of the best-known premium manufacturers are testing the refund question in the Court of Federal Claims, in a suit reported in early July 2026 that seeks more than $10 million plus interest. How that court reads the D.C. Circuit's opinion will decide whether years of payments come back.

For anyone still receiving FDA invoices on premium volume: the 45-day dispute window and the documentation FDA asks for are the practical protections available today. A company that pays premium volume without disputing it is making a choice, whether or not it means to.

Why "court order, not statute" matters

The exemption is real, but it is a product of administrative law. FDA can open a new rulemaking aimed at premium cigars, with a fuller record, and try again. Nothing in the court's decisions forbids that.

Congress could settle the question permanently. S. 3922, introduced on February 25, 2026 by Senators Moody and Scott of Florida, would exempt "traditional large and premium cigars" by statute, using a definition broader than the court's, and would exclude them from user fees. It was referred to the Senate HELP Committee, and no further action has been reported.

Until one of those things happens, the burden of proof sits with the manufacturer. If FDA ever questions whether a product qualifies, the answer will come from records, not reputation.

What a manufacturer should keep on file

For each premium line, I would want a file that proves every element without anyone having to visit the factory:

Wrapper and binder specifications showing whole-leaf wrapper and 100% leaf binder.
Blend records that show long filler of at least 50% by weight, with the method used to measure it.
A description of how the cigar is rolled, including any step where a machine is involved.
An ingredient statement confirming tobacco, water and vegetable gum only, and no flavoring.
Weight data supporting more than 6 pounds per 1,000 units for every vitola.
Confirmation that no tip, filter or mouthpiece is used.

Factories that make both premium and non-premium lines have a second task. FDA proposed a registration and listing rule on June 29, 2026 that would extend those obligations to foreign establishments and require electronic submissions. Comments closed September 14, 2026, and FDA redesigned Form 3741 at the end of September. Premium products that meet the definition fall outside these obligations, but a Dominican or Nicaraguan factory that also produces machine-made or flavored cigars for the U.S. market should expect to be inside them.

What I am watching

Three things will decide whether this settlement lasts. The first is the Court of Federal Claims and its reading of the prospective vacatur. The second is any sign of a new FDA rulemaking on premium cigars, which would most likely appear first in the Unified Agenda. The third is S. 3922, which would turn a hard-won court victory into settled law.

For now, the line holds. The companies that benefit most will be the ones that can show, product by product, that they are on the right side of it.

Three Tariff Regimes in Six Months: What 2026 Has Meant for Cigar Importers

2026-10-05T00:00:00Z

A cigar that crossed the border in January, another that crossed in April and a third that crossed last week each paid a different set of duties. None of the three was affected by a change in tobacco law. All of the movement came from trade law, and it came fast. For an industry that buys leaf years ahead and sets retail prices once a year, that pace is the real problem.

This article sorts the three regimes in order, explains how they interact with CAFTA-DR, and closes with the questions every importer of record should be able to answer today.

The first regime: IEEPA, and the refund queue it left behind

On February 20, 2026, the Supreme Court decided Learning Resources, Inc. v. Trump, holding six to three that the International Emergency Economic Powers Act does not give the President power to impose tariffs. The Court did not order a particular remedy. It left that to the agencies and the Court of International Trade.

Collection stopped on February 24, 2026. CBP then built a refund process, called CAPE, that runs through the ACE portal. To use it, an importer needs a working ACE account, refund banking details on file for ACH payment, and a declaration listing the entries it is claiming. CBP opened the process in phases: first for unliquidated entries and recently liquidated ones, then for reconciliation entries, and on October 6, 2026 for finally liquidated entries.

That third phase carries the catch. CBP's position is that it cannot reliquidate a finally liquidated entry without a court order directed to that importer. In practice, that limits the newest phase to importers who have sued in the Court of International Trade and are covered by an order there. A government appeal of the court's broader refund order is pending at the Federal Circuit, and a motion to certify a class of importers has been argued but, as far as public reporting shows, not decided.

The timing point. Refund suits of this kind are brought under 28 U.S.C. § 1581(i) and are subject to the two-year limit in 28 U.S.C. § 2636(i). When that clock starts is unsettled, and commentators have warned that some entries could be at risk as early as February 2027. An importer that is relying on the outcome of someone else's case should decide now whether that is enough.

Many cigar importers are small companies, and ACE access is a recurring weak point. An importer whose broker has always handled ACE may find that the refund process expects the importer itself to have an account and banking details in place. That is an administrative problem, but it is the one most likely to delay money that is otherwise owed.

The second regime: a 150-day surcharge under Section 122

The same day the Court ruled, the President proclaimed a 10% surcharge on imports from all countries under Section 122 of the Trade Act of 1974, a provision written for balance-of-payments emergencies. It took effect February 24, 2026. The exemptions covered USMCA goods, goods subject to Section 232, a list of specific tariff lines and CAFTA-DR textiles. Cigars were not on the exemption list, and the Premium Cigar Association treats the surcharge as one of the phases cigar importers paid.

Section 122 limits such a surcharge to 150 days unless Congress extends it. Congress did not, and the surcharge ended July 24, 2026.

Its legality is still in court. On May 7, 2026, the Court of International Trade held the surcharge unlawful in State of Oregon v. United States, but limited relief to three named plaintiffs. The Federal Circuit stayed that judgment on June 11, finding the government likely to succeed. There is no CAPE equivalent for Section 122 duties. Importers who want to keep a refund claim alive have to use the ordinary tools, such as post-summary corrections before liquidation and protests after it.

The third regime: Section 301 and forced labor

The measure that matters most today took effect at 12:01 a.m. Eastern on July 24, 2026, the day the Section 122 surcharge expired. USTR concluded Section 301 investigations into sixty economies' failure to prohibit imports of goods made with forced labor, and imposed additional duties. For the countries that make most premium cigars sold in the United States, the rates are:

Country of origin	Additional Section 301 duty
Dominican Republic	12.5%
Nicaragua	12.5%
Honduras	10%
Mexico	10%, with USMCA duty-free goods exempt
Ecuador	10%
European Union	Total of 10% including the normal duty rate

USTR's notice does not exclude tobacco or cigars, and it sets no end date. It does exclude goods subject to Section 232, which matters for packaging and is discussed below.

Why CAFTA-DR does not help with the forced labor duty

A common question is whether CAFTA-DR protects Dominican and Honduran cigars. For the normal duty, it does: an originating cigar still enters at zero. For the forced labor duty, it does not. The only CAFTA-DR carve-out in USTR's forced labor action covers duty-free textile and apparel goods. A qualifying Dominican cigar pays nothing under the regular tariff schedule and 12.5% under Section 301.

Nicaragua is the one place CAFTA-DR still does real work. In December 2025, USTR concluded a separate Section 301 investigation into Nicaragua's labor and human rights practices. That tariff is 0% for 2026, rises to 10% on January 1, 2027 and to 15% on January 1, 2028. But USTR wrote it so that it does not apply to goods that originate in Nicaragua under CAFTA-DR. A Nicaraguan premium cigar that meets the origin rules is outside the Nicaragua tariff, though not outside the forced labor tariff described above.

That makes origin documentation more valuable than it has been in years. Leaf sourcing, the location of each manufacturing step and the records that prove them now decide whether a Nicaraguan cigar faces one Section 301 duty or two from 2027 on.

Packaging is its own question

Cigar packaging crosses the border too, often separately from the cigars. Section 232 tariffs on steel and aluminum reach many derivative products, and Section 232 tariffs on timber, lumber and wood derivatives were imposed in 2025 and amended in January 2026. Whether a particular aluminum tube or cedar box falls within a derivative list depends on its tariff classification, so check the HTS line for each item rather than assuming. Because goods subject to Section 232 are excluded from the forced labor duty, the two do not stack on the same item.

What has not changed: excise tax

None of this touched federal excise tax. Large cigars still pay 52.75% of the sale price, capped at 40.26 cents per cigar, and small cigars pay $50.33 per thousand under 26 U.S.C. § 5701. A bill introduced in March 2025 would move large cigars to a per-pound rate with a per-cigar minimum, but it has not moved out of committee.

Questions to answer now

These are the points I would want any importer of premium cigars to have settled before year end:

Which of your 2025 and 2026 entries carried IEEPA duties, and where does each one sit in liquidation?
Does your company, not only your broker, have ACE access and refund banking details in place?
If you have finally liquidated entries, are you relying on someone else's lawsuit, and is that a decision or a default?
Are you preserving Section 122 claims through corrections or protests, or have you decided not to?
Is your country of origin and CAFTA-DR documentation strong enough to support each entry, especially for Nicaraguan product from 2027?
Have you checked the classification of tubes, boxes and other packaging against the Section 232 derivative lists?

The pattern of 2026 is that the duty on a cigar is now set by trade policy that has nothing to do with cigars. The companies that come through it best will be the ones that treat customs records with the same care they give to blending.

The Cigar Law Heat Map: Where Premium Cigars Face the Toughest State Laws

2026-10-12T00:00:00Z

Every state regulates premium cigars, but no two do it the same way. One state taxes a cigar at three-quarters of its wholesale price and another does not tax it at all. One lets a tobacconist open a lounge with a bar and the next bans lighting up anywhere indoors. Reading those laws one at a time makes it hard to see the pattern, so I put them on one map.

The score below runs from 0 to 100. A higher score means state law makes it harder or more expensive to make, ship, sell or smoke a premium cigar there. The map also lives on its own Heat Map page, which I will keep current as state law changes. This article explains what the October 2026 map shows.

Score out of 100 on state law as of October 12, 2026. Hover or tab to a state for its breakdown. The current version is always at the Heat Map page.

See all 51 scores in a table

Rank	State	Score	Tax on a $5 cigar	Indoor cigar smoking	Statewide flavor ban	Shipping to consumers	Local rules
1	Maine	83	$3.75	Shops or older bars only	Yes, premium exemption	Restricted	Allowed
2	Utah	74	$3.44	Banned in bars and shops	None	Effectively banned	Partly preempted
3	California	71	$2.55	Shops or older bars only	Yes, premium exemption	Restricted	Allowed
4	Alaska	68	$3.75	Shops or older bars only	None	Open	Allowed
4	New York	68	$3.75	Shops or older bars only	None	Open	Allowed
6	Massachusetts	63	$2.00	Cigar bars allowed	Yes, no premium exemption	Restricted	Allowed
7	Vermont	61	$2.00	Banned in bars and shops	None	Restricted	Allowed
8	Colorado	57	$2.24	Shops or older bars only	None	Restricted	Allowed
9	Illinois	52	$2.25	Shops or older bars only	None	Open	Allowed
10	Hawaii	50	$2.50	Shops or older bars only	None	Effectively banned	Preempted
11	Delaware	48	$1.50	Banned in bars and shops	None	Restricted	Partly preempted
12	New Jersey	44	$1.50	Shops or older bars only	None	Open	Allowed
12	Oregon	44	$1.00	Shops or older bars only	None	Restricted	Allowed
14	North Dakota	42	$1.40	Cigar bars allowed	None	Restricted	Allowed
15	Minnesota	39	$0.50	Shops or older bars only	None	Restricted	Allowed
16	South Dakota	38	$1.75	Cigar bars allowed	None	Restricted	Partly preempted
17	District of Columbia	37	$0.00	Cigar bars allowed	Yes, no premium exemption	Open	Allowed
18	Virginia	35	$0.80	Cigar bars allowed	None	Restricted	Allowed
19	Connecticut	34	$0.50	Shops or older bars only	None	Open	Allowed
19	Georgia	34	$1.15	Cigar bars allowed	None	Open	Allowed
19	Kansas	34	$0.50	Shops or older bars only	None	Open	Allowed
22	New Hampshire	33	$0.00	Shops or older bars only	None	Restricted	Allowed
22	Ohio	33	$0.67	Shops or older bars only	None	Restricted	Partly preempted
24	Nebraska	32	$1.00	Cigar bars allowed	None	Open	Allowed
24	Rhode Island	32	$0.50	Cigar bars allowed	None	Restricted	Allowed
24	Washington	32	$0.65	Banned in bars and shops	None	Restricted	Preempted
27	Arizona	31	$0.22	Shops or older bars only	None	Open	Allowed
28	Indiana	30	$1.50	Cigar bars allowed	None	Open	Partly preempted
29	Montana	29	$0.35	Banned in bars and shops	None	Restricted	Preempted
30	Maryland	27	$0.75	Cigar bars allowed	None	Restricted	Partly preempted
31	Wyoming	26	$1.00	No statewide bar ban	None	Open	Allowed
32	Louisiana	24	$0.50	Cigar bars allowed	None	Restricted	Partly preempted
32	Michigan	24	$0.50	Shops or older bars only	None	Restricted	Preempted
32	Missouri	24	$0.40	No statewide bar ban	None	Restricted	Allowed
35	West Virginia	21	$0.60	No statewide bar ban	None	Open	Allowed
36	Nevada	20	$0.50	Cigar bars allowed	None	Open	Partly preempted
37	Iowa	19	$0.50	Shops or older bars only	None	Open	Preempted
37	Wisconsin	19	$0.50	Shops or older bars only	None	Open	Preempted
39	Arkansas	18	$0.58	Cigar bars allowed	None	Restricted	Preempted
40	Idaho	17	$0.50	Cigar bars allowed	None	Restricted	Preempted
40	New Mexico	17	$0.50	Cigar bars allowed	None	Restricted	Preempted
40	North Carolina	17	$0.30	Cigar bars allowed	None	Open	Partly preempted
43	Alabama	15	$0.04	No statewide bar ban	None	Open	Allowed
44	Mississippi	14	$0.60	No statewide bar ban	None	Open	Partly preempted
45	Florida	12	$0.00	Cigar bars allowed	None	Restricted	Preempted
46	Kentucky	11	$0.30	No statewide bar ban	None	Open	Partly preempted
47	Tennessee	10	$0.33	Cigar bars allowed	None	Open	Preempted
48	Oklahoma	8	$0.12	Cigar bars allowed	None	Open	Preempted
48	Texas	8	$0.01	No statewide bar ban	None	Open	Partly preempted
50	Pennsylvania	7	$0.00	Cigar bars allowed	None	Open	Preempted
50	South Carolina	7	$0.20	No statewide bar ban	None	Restricted	Preempted

What the map shows

Maine is the most restrictive state in the country for premium cigars, at 83. Since January 5, 2026, Maine has taxed cigars at 75% of cost with no per-cigar cap. It has banned flavored cigars that do not meet its weight and whole-leaf test since 2009, restricts delivery sales and leaves its towns free to go further. No other state combines all four.

The rest of the top tier follows the same pattern:

Utah (74) taxes at 86% of the manufacturer's price with no cap, allows no cigar bars or smoking in tobacco shops, and has effectively barred shipments to consumers until its remote-seller licenses begin on January 1, 2027.
California (71) pairs a 51% rate with the only state flavor regime that requires every product to be listed before sale, discussed in Check the Box.
Alaska and New York (68) each take 75% of wholesale with no cap.
Massachusetts (63) has the strictest flavor law in the country, with no premium exemption, and lets towns adopt birth-year sales bans.
Vermont (61) caps its tax at $2 but bans indoor cigar smoking without exception.

At the other end, South Carolina and Pennsylvania score 7, with Texas and Oklahoma at 8, Tennessee at 10, Kentucky at 11 and Florida at 12. These states tax premium cigars lightly or not at all, and most of them preempt local governments from adding their own sales rules. The median state scores 32.

Tax explains most of the map

The single clearest finding is this: the ten most restrictive states are exactly the ten that take $2 or more in state tax from a cigar that wholesales for $5. Maine, Utah, California, Alaska, New York, Massachusetts, Vermont, Colorado, Illinois and Hawaii make up both lists.

That is partly a product of the method, since tax carries the most weight. But it also reflects how the law works in practice. A smoking ban limits where a cigar is enjoyed, and a flavor ban limits which cigars are sold. A tax with no cap reaches every premium cigar sold in the state, every day, and the burden grows with the price of the cigar. That is why the per-cigar cap is the most valuable protection the premium industry has won at the state level, as discussed in The 2026 State Cigar Tax Map.

The cap effect. Minnesota taxes cigars at 95% of wholesale, tied with Washington for the highest rate on the map. Its 50-cent cap on premium cigars drops it to 39. Washington's 95% rate with a 65-cent cap puts it at 32. On a premium cigar, the cap matters more than the rate.

The Southeast is the least restrictive region

For readers in the Southeast, the map is good news. Florida has no state cigar excise tax and broadly preempts local regulation of the sale of tobacco products under section 569.0025. Alabama, Mississippi, South Carolina and Kentucky have no statewide ban on smoking in bars. Kentucky cut its premium cigar rate from 15% to 6% this year in HB 757, which became law when the legislature overrode the governor's line-item vetoes in April.

Georgia (34) is the regional outlier. Its 23% wholesale rate has no cap, so the reference cigar pays $1.15, more than in any other state in the region. Georgia also leaves its local governments room to regulate sales, though only one Georgia town has adopted a flavor ordinance.

What the score does not capture

A state score is a summary, and three limits should be kept in mind.

First, this is state law only. Local taxes in places like Chicago, Cook County and New York City, and local flavor or birth-year bans in Massachusetts, California, Minnesota and elsewhere, can make a particular city far more restrictive than its state. The "local rules" column measures whether localities are allowed to act, not whether they have.

Second, the reference cigar matters. I used a cigar that wholesales for $5. For a less expensive cigar, an uncapped percentage tax costs less, and for a $15 cigar it costs far more. A state with a cap treats them all alike.

Third, some inputs are judgment calls. The research is set out state by state, but a few points are unsettled. Ohio's preemption of local flavor bans is before the Ohio Supreme Court. Washington's mail-order rules are enforced unevenly. The District of Columbia's flavor ban appears to have no premium exemption, and Maryland's 2026 cigar lounge law became law without a chapter number I could confirm. Where I had to choose, I chose the reading most consistent with the statute.

The map will move in 2027

Several changes already on the books will shift the scores next year:

Illinois' 75-cent cap on cigars begins January 1, 2027, which would drop it out of the top ten.
Colorado's combined rate rises from 56% to 62% of the manufacturer's list price on July 1, 2027.
Illinois, Nebraska and Utah begin licensing remote sellers on January 1, 2027. For Utah, that opens shipping; for the other two, it adds collection duties.
Louisiana's 50-cent cap expires at the end of 2027, and Nevada's cap expires June 30, 2027, unless they are renewed.

I will update the map as those dates arrive, and the Cigar Law™ Tracker follows each change in the meantime.

How the score works

Each state earns up to 100 points across five categories: tax on a reference premium cigar with a $5 wholesale price (40 points), indoor smoking rules (20), a statewide flavor ban (15), limits on shipping to consumers (10) and whether cities and counties may regulate tobacco sales more strictly (15). Tax carries the most weight because it reaches every premium cigar sold in the state.

I tested the result against equal weights and two other mixes. States in the middle trade places, but Maine ranks first every time, the same five or six states fill the top, and the same group of southern and south-central states fills the bottom. The full method, the scoring rules for each category and a log of changes are on the Heat Map page.

Check the Box: What the Ninth Circuit's Unflavored List Ruling Gives, and Takes From, Premium Cigars

2026-10-12T00:00:00Z

When the Ninth Circuit ruled in Rocky Patel Premium Cigars, Inc. v. Bonta, most coverage reported the result: the cigar industry lost its appeal. That is accurate, but it is the least useful thing about the opinion. Judge Bumatay, writing for a panel that included Judges Paez and Callahan, did three things that will shape how premium cigars are sold in the western United States for years. He drew a line between what states may and may not demand of manufacturers. He accepted, as the basis for the ruling, a specific promise from California's Attorney General. And he explained exactly why a cigar's label can become evidence against it.

The ruling in one paragraph

California's flavored tobacco ban, Health and Safety Code section 104559.5, prohibits retail sale of tobacco products with a characterizing flavor other than tobacco. The Unflavored Tobacco List statute, enacted by AB 3218 in 2024, turned that ban into a pre-approval system. Since January 1, 2026, a tobacco product may not be offered to California consumers, or to retailers and wholesalers for sale in California, unless it appears on the Attorney General's list. To get there, a manufacturer or importer files an application with a product description, its FDA status, a certification that it has no characterizing flavor, packaging and marketing materials and a sample. Seven family cigar companies, Cigar Rights of America and the Premium Cigar Association argued that federal law preempts the scheme as applied to premium cigars and that it chills their speech. The district court found neither claim likely to succeed, and the Ninth Circuit agreed.

The preservation sandwich, and the slice the court left alone

The Tobacco Control Act's preemption provision, 21 U.S.C. § 387p, has three layers, which the Ninth Circuit has called a "preservation sandwich." The Preservation Clause lets states regulate tobacco more strictly than federal law. The Preemption Clause then forbids state requirements "different from, or in addition to" federal requirements on specified subjects, including premarket review and product standards. The Savings Clause then rescues state requirements "relating to the sale, distribution, possession, information reporting to the State, exposure to, access to, the advertising and promotion of, or use of" tobacco products.

The industry's strongest argument was that the list is a state premarket review system, a subject Congress gave to FDA, and that FDA has exempted premium cigars from premarket review. The court did not reject that argument. It assumed, without deciding, that the list is a requirement relating to premarket review, and held that it is saved anyway because it relates to sale. Two points in that reasoning deserve attention.

First, the court read "relating to" as broadly as possible. Relying on the Supreme Court's 2026 decision in Chevron USA Inc. v. Plaquemines Parish, it held that even an indirect connection to sales is enough unless the connection is "tenuous, remote, or peripheral." Because no product can be sold in California without being listed, the connection was direct.

Second, the court rejected each limit the industry proposed. The Savings Clause is not confined to rules aimed at retailers; it says nothing about who in the chain it covers, and several of its subjects, such as distribution and information reporting, happen outside stores. It does not require a historical twin; a new method of enforcing a sales ban is still an exercise of the states' traditional police power. And the ban on possessing unlisted products is saved because, as the Attorney General described it, it reaches only retailers and wholesalers holding product for sale.

What survives is the line between selling and making. A state may decline to allow a product on its shelves, or require proof before allowing it. A state may not set a product standard, directly or through a sales ban that in practice tells manufacturers how to make their products. The court said the industry lost on this point because it never alleged that the list requires any change in how premium cigars are manufactured. That is a roadmap. A future challenge that shows a state list effectively dictating ingredients, processes or blend specifications would present a different case. A challenge that only shows cost and paperwork will not.

The promise on the record

The First Amendment claim focused on the statute's presumption. Under section 104559.1(d), the Attorney General must presume a product is flavored if its maker has made a statement to consumers or the public that it has a characterizing flavor, "including, but not limited to, any text, color, or images on the product's labeling or packaging" that communicates flavor "explicitly or implicitly." The industry argued that this would make cigar companies stop describing the leather, cocoa, fruit and herbal notes that premium smokers look for.

The court did not hold that the presumption is harmless in general. It held that, for premium cigars, the burden is minimal because of how the Attorney General said he would apply it. A cigar that meets FDA's premium definition cannot, by definition, contain a characterizing flavor other than tobacco, so a certification that the cigar is exempt under 21 C.F.R. § 1114.1(d) and § 1114.3 "automatically and immediately rebuts" the presumption. The Attorney General told the court the process "literally is checking a box," and that anything a manufacturer has said about the product "doesn't come into play."

The sentence to keep in your California file. After accepting the Attorney General's description of the process, the court added: "should the Attorney General's representations turn out to be incorrect, that would require a different analysis."

In practical terms, the industry's First Amendment protection in California is now a representation made by the state's lawyers to win an appeal. That has value. A party that persuades a court to accept a position generally cannot reverse course later to gain an advantage, and the panel has signaled how it would view a denial based on tasting notes. But a representation is not a statute or a regulation, and it lasts only as long as the office honors it. The sensible response is documentation. Every premium cigar application should include the federal certification in clear terms, and every approval, request for more information and denial should be kept. If the Attorney General ever denies or removes a certified premium cigar because of its marketing, that record is the as-applied case the court described.

Who gets the shortcut, and who does not

The box-checking process is available only to cigars that satisfy FDA's definition of a premium cigar in 21 C.F.R. § 1114.3. Among other requirements, a qualifying cigar must be hand-made, have no characterizing flavor other than tobacco and contain only tobacco, water and vegetable gum. That definition matches the one Judge Mehta reaffirmed in April, discussed in The Line Holds, and it excludes infused cigars, sweet-tipped cigars and anything with an ingredient beyond those three.

For a cigar outside that definition, the opinion offers no comfort. The presumption applies in full, and the manufacturer must rebut it with evidence. California's own premium cigar definition, with its $12 wholesale price floor, is a separate test that governs a different question and should not be confused with the federal definition that unlocks the box-check. A product line that sits near the boundary, for example a handmade cigar with a sweetened tip or a flavored wrapper, should be reviewed against the federal text before anyone assumes it qualifies.

Brand names and trade dress are now regulatory facts

This is the part of the opinion that matters most to brand owners, and it has received the least attention. The statutory presumption is triggered by "text, color, or images" on labeling or packaging that communicate flavor "explicitly or implicitly." A brand name is text on the label. A band color scheme is color. A box illustration is an image.

In my view, that turns trademark and packaging decisions into California regulatory facts for any cigar that cannot use the federal premium certification. A mark that evokes a dessert, a fruit, a liqueur or a coffee drink, a band in the colors associated with a flavor, or packaging art showing beans, berries or a pastry can each support the presumption, even if the product contains nothing but tobacco and the name was chosen for reasons that have nothing to do with taste. The same is true of statements "directed to consumers or to the public," which can include website descriptions and promotional copy, not just the box.

For a cigar that meets the federal definition, the Attorney General's representation should neutralize these concerns, subject to the caveats above. For everything else, brand clearance for a product that will be sold in California should include a review for flavor signals under section 104559.1(d), alongside the usual likelihood-of-confusion analysis. It is far cheaper to choose a name and trade dress with this in mind than to rebut a presumption, or to rebrand a product the state has removed from the list.

The cost of proving a negative

The opinion records the economics in unusual detail. The statute authorizes fees of up to $1,000 per product or variant application. Current regulations set $300 for an original application and $150 for each variant or annual renewal. Because premium cigars are made in many sizes and blends change, the application count adds up quickly. Rocky Patel estimated it had paid nearly $50,000 in initial fees, expected about $35,000 a year in renewals and projected that it would stop selling about half its products in California because of compliance costs.

The court never weighed those burdens. Because the industry failed to show a likely success on the merits, the panel did not reach irreparable harm, the balance of equities or the public interest. The costs are real, but the opinion confirms they are not a legal argument by themselves. For many companies, the practical answer will be portfolio decisions: which sizes and limited releases are worth listing in California at all, and how to schedule renewals and new releases to control fees.

A template, not an outlier

Because the opinion is published, it is binding precedent in every federal court in the Ninth Circuit. A state in that circuit that wants to adopt a flavor list now has an appellate opinion approving the method, along with the Attorney General's comparisons that the court found persuasive: the directories states keep under the 1998 Master Settlement Agreement, and fire-safe cigarette laws that require manufacturers to certify compliance before sale. The opinion also confirms that a list may impose its duties on manufacturers and importers, not just retailers, and that a new enforcement method needs no historical precedent.

Outside the Ninth Circuit, the opinion is not binding, but it is the most detailed appellate treatment of a state flavor list to date and will be cited in any challenge to a similar law.

For manufacturers and importers

If you sell into California, or into a state that may follow it, the opinion suggests a few concrete steps:

Confirm, product by product, whether each cigar meets every element of 21 C.F.R. § 1114.3, and state the federal exemption plainly in every application.
Keep a complete record of each application and the Attorney General's response, including any request for more information or any removal.
For any product outside the federal definition, review the brand name, band, box art, website copy and tasting notes against section 104559.1(d) before launch.
Decide which sizes and releases are worth listing, and plan renewals and new launches around the fee structure.
Watch for copycat list statutes in other western states, where this opinion will be binding.

What to watch

The preliminary injunction stage is over, but the case is not. The litigation returns to the district court on the merits unless the plaintiffs seek further appellate review, and the plaintiffs also filed a parallel suit in state court. The most important development to watch is not in either courtroom. It is whether the Attorney General's office continues to list every certified premium cigar, as it told the Ninth Circuit it would. If it does, the industry has a workable, if expensive, system. If it does not, the opinion itself says the analysis changes.