Written by: Niko San Pedro
Instagram: @nikosanpedro

Starting a cigar business is an exciting venture, but like any business, it requires understanding the legal requirements and regulatory hurdles that come with it. Whether you’re looking to sell cigars online or through a physical store, there are several key steps you need to follow to ensure you operate legally and successfully in your state. In this guide, I’ll walk you through the necessary steps to start selling cigars in your state while providing valuable insights into how FarmhouseBlends.com can help you build and grow your cigar brand.

Step 1: Obtain Your Federal Tobacco License

Before selling cigars anywhere in the United States, the first thing you need is a federal tobacco license from the Alcohol and Tobacco Tax and Trade Bureau (TTB). This license is required by anyone involved in the tobacco business, including manufacturers, wholesalers, and retailers.

The specific type of federal license you need will depend on your role in the tobacco industry. If you’re planning to manufacture cigars, you’ll need a Tobacco Manufacturer’s License. If you’re going to wholesale cigars, a Wholesale Dealer’s License is required. Retailers selling cigars directly to consumers need a Tobacco Retailer License.

The application process for these licenses can be done through the TTB website. Once you’ve submitted the application, you’ll need to wait for approval, which typically takes a few months.

Step 2: Apply for Your State Tobacco License

Once you’ve secured your federal tobacco license, you need to apply for a state tobacco license. This license is issued by each state’s respective governing body, and each state has different requirements for selling cigars. For example, in some states, you’ll need a license to sell cigars at retail or wholesale levels, while other states may have additional permits for things like tobacco distribution or age verification.

To find out what specific licenses you need in your state, visit your state’s government website or the state’s tobacco control agency. Many states, such as California, Texas, and New York, have dedicated tobacco-related licenses and regulations. It's essential to carefully read the state’s rules to ensure you’re applying for the correct licenses and permits.

Step 3: Understand Your State’s Tobacco Taxes

Tobacco taxes vary greatly by state, and these taxes can have a significant impact on your pricing and profit margins. Most states impose taxes on cigars either by the number of cigars in a pack or by their wholesale price. For example, some states might charge a flat tax per pack, while others tax cigars as a percentage of the wholesale price.

As a cigar business owner, it’s crucial to understand your state’s tobacco tax rates and how they’ll impact your pricing structure. Many states require you to collect and remit tobacco taxes to the state’s revenue department regularly.

To find out the specific tax rates for cigars in your state, check with the state’s Department of Revenue or Tobacco Tax Division. This will help you ensure that you stay compliant and avoid penalties for tax-related issues.

Step 4: Implement an Age Verification System

Cigars are a regulated product, and selling them to minors is illegal in every state. The legal age to purchase tobacco products varies by state, but it’s generally 18 or 21 years old. To stay compliant, it’s essential to implement a reliable age verification system for both in-person and online sales.

For physical stores, this means training your staff to check IDs from any customer who looks under a certain age, typically 30. If you're selling cigars online, you’ll need to ensure that customers are verified as being above the legal age before completing any transaction.

Having a foolproof age verification process not only keeps you compliant but also helps build a trustworthy reputation for your business.

Step 5: Packaging and Labeling Compliance

In addition to licenses and taxes, your cigars must also comply with federal and state packaging and labeling regulations. The FDA mandates that all tobacco products carry a specific health warning label. Whether you're selling cigars in bulk or individual packages, they must be properly labeled with a warning about the health risks of tobacco use.

Some states may have additional requirements for labeling, especially if you’re selling flavored cigars or products intended for specific niches. Be sure to consult both federal and state regulations to ensure that your cigars are packaged and labeled correctly.

How FarmhouseBlends.com Can Help You Build Your Cigar Business

At FarmhouseBlends.com, we specialize in helping entrepreneurs across the U.S. navigate the complex world of cigars. Whether you’re just starting your cigar business or looking to grow an existing brand, we provide the support and expertise you need to succeed.

From obtaining the necessary licenses to offering advice on packaging, tax compliance, and marketing strategies, we work alongside you every step of the way. Our team of experts is dedicated to ensuring that you stay compliant with all the legal requirements while building a brand that resonates with cigar enthusiasts.

Checklist for Selling Cigars in Your State:

1. Obtain your federal tobacco license from the Alcohol and Tobacco Tax and Trade Bureau (TTB).

2. Apply for your state tobacco license through the appropriate state agency.

3. Understand your state’s tobacco tax rates and comply with filing requirements.

4. Implement a reliable age verification system for both in-person and online sales.

5. Ensure your cigars are properly labeled and packaged in accordance with both federal and state laws.

Join Our FREE Online Cigar Community

Starting a cigar business can be overwhelming, but it doesn’t have to be. Our FREE online cigar community is a great place to connect with other cigar business owners, share experiences, and learn from one another. We also offer valuable resources and tips on how to grow your cigar brand and succeed in this industry.

Join our FREE online cigar community today!

Final Thoughts

Building a cigar business is both challenging and rewarding, but with the right knowledge and resources, you can succeed in any state. By following the steps outlined in this guide, you’ll be on your way to legally and successfully selling cigars, whether you’re selling them in person or online.

At FarmhouseBlends.com, we specialize in helping cigar entrepreneurs like you navigate the licensing process, taxes, and other complexities that come with starting a cigar business. Let us be your guide as you build your brand and take your business to new heights.