In a recent “Notice to Cigarette Distributors Selling in New Mexico,” the New Mexico Attorney General announced that “effective immediately” all distributors must stop selling any product marked as a “small” or “little” cigar unless the product listed is in the state cigarette directory. Since no little cigars are currently listed in the Attorney General’s directory, the notice is an immediate, de facto ban on the product. The notice also purports to require that all little cigars must bear state excise stamps in the same manner as cigarettes.
Although the Attorney General’s notice does not outline his alleged authority for regulating little cigars as cigarettes, one could assume that it is based on the tobacco escrow statute’s definition of a cigarette, which includes “tobacco, in any form, that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette.” Apparently the Attorney General has now determined, by administrative fiat, that all little cigars are actually cigarettes under this definition.
The Attorney General’s notice also imposes new requirements for products labeled as large cigars. For any large cigars that “look like a cigarette,” the distributor must provide the Attorney General with the brand and manufacturer name in order for the Attorney General “to make a determination as to the correct size.” The notice indicates that the Attorney General is working with the manufacturers of these products “to assist them to become compliant as quickly as possible.”
Although the notice does not specify the consequences of this new and unprecedented regulatory review procedure, it would appear that the Attorney General contemplates redefining certain large cigars (perhaps including those with filters and/or wrapped in reconstituted tobacco) as cigarettes, with attendant requirements, including cigarette excise stamps and listing in the state tobacco directory.
Please contact a member of the Troutman Sanders Tobacco practice if you have any questions about the Attorney General’s notice.