Smoke Show: The Big-Money Fight Over Cohiba Cigars

Lifted sanctions could be a drag on at least one major American producer.

It was always going to get worse before it got better. As the Cuba situation improves, a lot of volatile, chaotic stuff is going to happen to the U.S. cigar market, which has long allowed large companies to sell legal stogies under “illegal” brand names. That’s changing right now and the first company to feel the burn, General Cigar Co., which produces Cohibas, is a big one.

General Cigar is currently waiting on the Trademark Trial and Appeal Board to decide whether it’s legal for them to continue producing Cohibas as Cubatabaco, Cuba’s state-run cigar company, enters the market. The Cubans say that, if they can’t sell in the U.S., no one should be given free reign to use a label they created.

Why This Is Interesting:

Shortly before the embargo began in the early sixties, many of Cuba’s wealthy brand owners fled the country with a handful of their best workers and some tobacco seeds. They setup shop in Nicaragua, the Dominican Republic, and other locations, and began to rebuild. The Cuban government kept their brand names, facilities, and produced the same cigars for state profit.

Because the embargo was signed into law, a lot of those private owners were able to get their new businesses off the ground with limited competition. In the decades since, a secondary set of trademarks has been established. While the rest of the world smokes, for instance, Cuban Romeo y Julietas, what we buy are often Dominican and Nicaraguan products—made by a separate company.

Here’s where it gets confusing: The parent company that owns the U.S. company with some Cuban brands also owns a stake in Cuba’s cigar market. So when the embargo is fully lifted, there won’t be a conflict with Montecristo, for instance.

However, the other company (which owns Bolivar, Punch, Cohiba and others) does not have a tie to the blood lines in its ancestry. In a sense they’re using Cuban trademarks illegally for decades. In a more accurate sense, Cuba has been using stolen trademarks illegally for decades.

It’s likely that when the embargo comes down, these brands—whose owners are now long dead but whose descendants deserve some sort of compensation—will be tied up in legal battles.

Except for Cohiba.

See, while all the others owned by General Cigar Co. (Punch, Partagas, Bolivar) are pre-embargo brands, Cohiba is actually an original product of the Cuban state: a private label developed for Castro in the late sixties.

Now Cohiba may be in trouble. Last week the Supreme Court refused to hear arguments in the long-standing legal feud, essentially saying that parent company Cubatabaco is now free to challenge the trademark—and they have facts on their side. So, even though Cuba can’t make or sell Cohiba in the U.S., they might have their first legal win, prohibiting someone else to do so.

What This Means For You:

Those Cohibas you see in your smoke shop might not be here forever. They could either come back under a different name or disappear altogether. It’s entirely possible that this cash cow has been milked dry.

That said, General makes good cigars under the brand name, so it’s likely that even if the bands change, the blends will still be around. In recent years the company has brought in a lot of new blends under the name. So, as this thing gets parsed out, stock up. Go straight for the Cohiba Commadors produced for last year’s limited-edition Jay-Z partnership.