California Unveils Proposed Plan for Approved Tobacco Products List

In the summer of 2020, California passed a law that would ban most types of flavored tobacco and vaping products. Five years later, the state is still finalizing how to enforce the law but yesterday, it provided a draft of some of the biggest impacts of the flavored tobacco law.

Spoiler alert: it’s going to affect a lot more than flavored tobacco and vaping products.

The legislature tasked the California attorney general with creating a list of products that were approved to sell, something known as the unflavored tobacco list (UTL). For more than a year, various industries affected by the law have been waiting to see how all of this would work. Yesterday, the Attorney General’s office provided a draft of the UTL process.

As of now, this remains a draft, but given that the UTL is supposed to be published by the end of this year, it’s unclear how many details will change. In short, companies will need to provide the attorney general’s office with details about the proudcts—such as the length, ring gauge, weight, quantity in a package, etc.—as well as information about whether the product has a flavor other than tobacco, including all decisions made by other governments about whether a particular product is flavored. In addition, the manufacturer will need to send a package, i.e. box, to the attorney general’s office.

Each product will be subject to a $300 application fee—reduced from the up to $1,000 originally proposed—and $150 for annual renewals.

Some more expensive cigars will avoid this process. The 2020 law included an exemption for “premium cigars,” though part of that definition stipulates that the cigars must cost at least $12 wholesale:

“Premium cigar” means any cigar that is handmade, is not mass produced by use of mechanization, has a wrapper that is made entirely from whole tobacco leaf, and has a wholesale price of no less than twelve dollars ($12). A premium cigar does not have a filter, tip, or nontobacco mouthpiece and is capped by hand.

In a weird quirk, the law currently allows cigar shops to sell flavored “premium cigars,” but the $12 wholesale price still applies.

As halfwheel noted last year, the UTL will cause many companies to stop selling products in California because of the registration process. Many might choose not to sell limited edition cigars in California because of the added paperwork. Furthermore, because companies will need prior authorization to sell the products, it might mean that California retailers will receive delayed shipments of new items as cigar companies wait for the attorney general’s office to approve a product for the UTL.

It’s not just a problem for California-based retailers; this would apply to all shipments going to California, meaning that a retailer in Florida would run the risk of fines if they were to ship a product not on the UTL to a consumer in California.

The law says that companies will have 45 days to submit applications after the finalized UTL rule is published, which could happen in the next five days. In the meantime, comments can be sent to the department.

Many questions remain about the law, including whether there will be a grace period after Dec. 31, 2025 for retailers will be able to sell products not on the UTL. The way the proposal is written, the attorney general’s office needs to publish the UTL by Dec. 31, meaning that retailers could, in theory, have as little as one day to learn about which products that are in their stores have suddenly become illegal to sell. It’s also unclear what happens if the attorney general’s office cannot meet its self-imposed turnaround time of 90 days for an application that does not need more information.

Perhaps most importantly, it’s unclear whether the UTL will survive an inevitable court challenge. In an email sent out today, the Cigar Rights of America (CRA)—an industry trade group—hinted at challenging the proposal via “all available avenues.” The CRA took special exception to the emergency action status that has been used by California to justify the enactment of this law.

There is at least some evidence that a legal challenge on other grounds would be successful. During the last year, Republican-controlled state governments have been aggressively enacting ENDS directory/PMTA registry laws. These bills, which are supported by Big Tobacco, are described as targeting “illegal Chinese-made vapes” using a somewhat similar process. In short, the laws say that the only vaping products that are allowed to be sold are the ones that have been authorized by the U.S. Food & Drug Administration. As of today, there are just 39 products that have received FDA approval, all of which are owned by Big Tobacco companies. Any product other than 39 is considered illegal.

There have been a variety of lawsuits to these laws, with federal courts split on the legality of them. However, the U.S. District Court for the Southern District of Iowa found that Iowa’s registry law was likely preempted by federal laws that grant the FDA the exclusive authority to determine which tobacco and vaping products are legal and illegal. Presumably, California’s UTL is going to run into similar scrutiny about how it avoids any preemption concerns.

You can view the proposal and the economic analysis here.