10/27/2025
Monday Night Football and FREE Pizza!
Kickoff @ 5:15
Cigar Inventory and the UTL Explained
You most likely have noticed our inventory levels have been less than optimal lately. We have been holding off on ordering as the Premium Cigar industry is currently under attack by Governor Newsom and Attorney General Bonta.
FLAVOR BAN: The State banned flavored to***co products but gave an exemption to flavored Premium Ci**rs (as we have proven at the Federal level that Premium Ci**rs are NOT purchased, consumed or marketed to children and pose no health risks for casual cigar smokers). The State claimed confusion regarding what constitutes a "Premium Cigar", although the Federal government, specifically the FDA, has recognized our definition by court order.
FDA: Premium Cigar Definition (https://www.fda.gov/media/176810/download)
BY THE NUMBERS: For comparison, the number of Premium Ci**rs sold in the U.S. in ONE YEAR is less than the number of ci******es sold in the U.S. in ONE DAY! The number of Premium Flavored Ci**rs sold (does NOT include machine made, no filter, no non-to***co tip like Swisher Sweets, Black & Mild, Philly Blunts, etc.) is about 12% of all Premium Ci**rs. That is a microscopic amount of all to***co products sold...about the number of ci******es sold in less than 3 hours!
THROWN UNDER THE BUS: Rather than the State request manufacturers submit a SMALL list of Premium Flavored Ci**rs for approval, they required ALL cigar manufacturers be included in a much larger Unflavored To***co List (UTL). This requires ALL manufacturers to:
1) Pay a $300 application fee for the first year. A $150 annual renewal fee will be required to remain on the list.
2) Submit a sample of the product (complete box of ci**rs) to the California Attorney General’s office.
3) Provide the California Attorney General’s office with basic details about the product, such as length, ring gauge, weight, quantity, etc.
4) Certify that the product meets California’s law that bans most products from having characterizing flavors other than to***co.
COMPLIANCE NIGHTMARE: The above submissions are required for EVERY BLEND and EVERY SIZE in that blend! Let's say a manufacturer has 10 blends and 5 sizes in each of those blends...that's $15k in fees, 50 boxes of ci**rs shipped to the AG's office and completion of 50 separate certifications. Most manufacturers we carry offer many more blends than this example so actual compliance is even more expensive and cumbersome.
TIMEFRAME(S) & LAWSUITS:
1) Jan1, 2021, California banned flavored to***co which included an exemption for "Premium Ci**rs" (whew!), but required a $12 wholesale price (UH-OH!). Our industry filed lawsuits citing government overreach and their inability to impose pricing on non-essential products. Not only were we concerned about government overreach, but also the State's history of clawing in additional products to existing regulations. Our great concern is the State at any time in the future could say, "Since Premium FLAVORED Ci**rs are already $12 wholesale, we'll mandate ALL Premium Ci**rs are now $12 wholesale". For the consumer, that translates into $24 MINIMUM RETAIL PER CIGAR! These common-sense lawsuits to remove the $12 minimum wholesale price agitated the AG and Governor.
2) September 2024 - Newsom signed into law AB 3218, which established the UTL. Our industry was expecting regulations requiring FLAVORED cigar registration. This was the first time we heard about an UNFLAVORED list and the onerous requirements to be included on that list. Our industry filed lawsuits stating, "These regulations set up the Attorney General as its own, state-run U.S. Food and Drug Administration, demanding piles of paper and massive fees from to***co manufacturers in order to conduct a review of each to***co product..." and "...set up a State official—frankly with no medical or public health expertise—as a parallel U.S. Food and Drug Administration, augmenting the FDA’s laboratory testing and data submission process for approving the marketing of to***co products.” The Governor and the AG were so scared of losing this battle in court, they decided to launch a desperate counter-attack.
3) August 25, 2025 - The California Office Of Administrative Law and AG Bonta approved an EMERGENCY HEALTH & SAFETY ORDER under the guise of, "public health, safety, and welfare". Yes, similar administrative law under which the State's COVID regulations were imposed! No vote. No public input. No discussion. Just...done. This required ALL manufacturers to comply by October 9th, 2025 or they would not be included in the UTL list to be released Dec 31, 2025. This order stated that if you did not comply, your products were subject to seizure at the retail site, fines to the retailer and possible forfeiture of the retail to***co license.
4) October 9, 2025 - A Temporary Restraining Order (TRO) was filed against the State by our industry. The Cigar Rights of America (CRA) stated California, "...arbitrarily and capriciously violated the California Administrative Procedure Act (APA) by abusing their emergency rule-making authority. That process was the basis for bypassing procedural safeguards designed to ensure transparency, public participation and sound policy-making. As a result, the state has created a regulatory scheme that imposes disproportionate and extraordinary burdens on premium cigar manufacturers." The TRO was denied by a Federal judge based on jurisdictional grounds and not on the merits of our argument.
5) October 9, 2025 - Manufacturers were forced to comply or risk having their products banned for sale in CA.
6) Current (October 27, 2025) - The lawsuits are ongoing...
WHO'S IN vs WHO'S OUT?: Most manufacturers we offer have now decided to comply with these draconian regulations, but have limited the number of blends and sizes available...a sort of "California Menu". Fortunately, these are many of the popular blends and sizes we carry.
Dumbarton has decided to not submit ANY products to be include in the UTL. We fully support their decision as inclusion in the UTL also forces manufacturers into a quagmire of ongoing regulation and compliance issues.
Drew Estate will no longer be selling their Acid line in CA.
Foundation will no longer be selling their Upsetters line in CA.
Perdomo will only offer their products through a specific distributor in California, which will raise retail prices effective Jan 1, 2025 by approximately $3-$5 per cigar.
Some manufacturers have stated they will no longer offer Limited Edition or Seasonal blends as this could make these ci**rs non-compliant with the UTL regulations. For us, that means no Tatuaje Monsters this year and we are awaiting announcements for Fuente Opus X rarities as well as other seasonal and rare blends from others.
SHOULD I BUY ONLINE? The UTL bans the sale of ALL FLAVORED to***co into CA, including via the Internet. Because Internet retailers reside out of state, it would be difficult for CA to levy fines or bring charges against them in a CA court. The charges are easier to levy against an individual buyer residing inside CA. Not only could you be subject to all the regulations of the UTL, you could also be liable for any CA To***co Taxes (currently 54.27%) not paid on all of your internet purchases.
MOVING FORWARD: Although we have heard from many manufacturers that they have submitted their products for inclusion on the UTL, this list will not be released until Jan 1, 2025. We are hoping that all manufacturers that have submitted their products will be approved. Approvals are completely up to the State and they have not provided their criteria for this approval as of this date. If for some reason a product is NOT approved, there are no clear guidelines as to an appeals process or resubmission consideration. We are also hoping for a successful State court ruling on our favor for overturning the UTL requirements. Until then, we are being cautious about what products we offer as the State can enact devastating actions directly against us by seizure, fines and suspension/revocation of our license.
This is a difficult time and we greatly appreciate your patience, understanding and continued patronage and support of Perfecto Lounge!
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