South Dakota Opens the Humidor: How HB 1215 Ended a 16-Year Freeze on Cigar Bars — and Why Washington Is Taking Notice
In the world of premium cigars, the wins are rarely loud. They don't happen on national stages or in sweeping federal legislation. They happen in state capitals — in committee rooms, on senate floors, and in the quiet stroke of a governor's pen. So when South Dakota Governor Larry Rhoden signed House Bill 1215 into law this past March, ending a 16-year prohibition on new cigar bar licenses in the state, the cigar industry noticed. Now, the Cigar Association of America is making sure the legislators behind that moment get their due credit.
The Cigar Association of America has awarded the first-ever Leadership in Commerce Awards to Governor Larry Rhoden and former District 24 Representative Will Mortenson of Fort Pierre. The recognition, announced out of Washington, D.C. on July 13, 2026, marks the debut of what promises to be an annual acknowledgment of state-level political courage in the face of a regulatory landscape that has, for decades, tilted against the premium tobacco industry.
The Bill That Started It All: Understanding HB 1215
To understand why this award matters, you have to understand the wall South Dakota cigar enthusiasts had been staring at since 2010. South Dakota's existing law stems from the state's 2009 smoking ban, which generally prohibits smoking tobacco products in public places but includes a limited number of grandfathered exemptions for existing cigar bars. That handful of establishments — just three, by most counts — were allowed to stay open. Everything else was shut out. No new licenses. No new venues. No new social spaces for men who wanted to sit down, light up a quality stick, and spend an evening the way it was meant to be spent.
HB 1215 allows for new cigar bars — businesses that can sell cigars and alcohol to consumers to enjoy on premises. Previously, the state's 2008 Clean Air Act had grandfathered just three cigar bars and prohibited the issuing of any new licenses. For sixteen years, that was that. The grandfathered three carried on; aspiring owners had no legal avenue to compete.
Mortenson changed that calculus. He was the prime House sponsor of House Bill 1215, to allow for the limited licensing of cigar bars across the state. He framed his bill not as a rollback of public health measures, but as a question of local control — letting communities decide for themselves what they want within their borders. He said the bill puts the choice of offering a cigar bar license in the hands of local governments.
What the Law Actually Requires
HB 1215 isn't a blank check for anyone who wants to slap a "Cigar Bar" sign on the door. The bill allows for counties and municipalities to issue licenses for new cigar bars, so long as the businesses meet certain requirements: have a humidor on the premises; operate within a fully-enclosed space; have proper ventilation installed; and generate at least 10 percent of annual gross income from the sale of cigars. These aren't arbitrary hurdles — they're the kind of standards that separate a legitimate cigar lounge from a bar that just wants to get around the smoking ban with a box of Cohibas behind the counter.
Municipalities or county commissioners will need to issue the cigar bar license, which will require a public hearing with at least 30 days of notice and at least a seven-day notice in a newspaper. If approved, the business can only allow for the smoking of cigars on premise. The framework keeps oversight at the local level, where neighbors and business owners actually have a voice. There are also restrictions on how many licenses municipalities can issue, which are directly tied to population size. Larger cities can accommodate more establishments; smaller towns won't get flooded with applications they can't meaningfully process.
HB 1215 expands upon the existing framework by allowing local governments to issue licenses for new cigar bars. Under the bill, counties and municipalities have the authority to determine whether to permit such establishments within their jurisdictions and to administer the licensing process. This is a critical design choice. It means Pierre isn't dictating to Sioux Falls, and Rapid City isn't being lumped in with a rural township of eight hundred people. Every community makes its own call.
A Clear Road to Market
For entrepreneurs and existing tobacconists, the practical effect is immediate. With Rhoden's signature, H.B. 1215 is now in effect, meaning businesses can start applying for new licenses. That means the fifteen months since the signing have been, for some South Dakotans, a period of scouting locations, drawing up business plans, and sitting across tables from county commissioners. For the premium cigar community, HB 1215 represents an important development because it creates a legal pathway for new cigar bars to operate in South Dakota. Under the existing framework, opportunities for such establishments had been limited largely to locations that qualified under earlier exemptions. The grandfathers had the market to themselves for sixteen years. That era is over.
The Award and What It Signals
The Cigar Association of America isn't handing out participation trophies. The Leadership in Commerce Award is new, deliberate, and strategic. The CAA is building a record of which politicians show up for the industry — and which ones don't — at a moment when the legislative fight over premium cigars is playing out simultaneously in dozens of state capitals.
CAA President Scott Pearce said, "Leader Mortenson was pivotal in the South Dakota Legislature this year in working to license cigar bars." And "Gov. Rhoden signing the bill (HB 1215) into law made a huge difference."
Pearce continued: "Both Gov. Rhoden and Leader Mortenson demonstrated vital leadership to support small businesses in South Dakota. And it is exactly this type of leadership we are recognizing with our inaugural Leadership in Commerce Awards."
Those aren't throwaway lines from a press release. The CAA is mapping the terrain for future fights. By publicly honoring legislators who move the needle, the association creates a template — one that other state-level politicians can look at and think about the next time a cigar bar bill lands on their desk.
South Dakota Isn't Alone
The awards to Rhoden and Mortenson were announced just days after the CAA recognized a lawmaker across the country for similar work. The Cigar Association of America named North Carolina state Rep. Kyle Hall (R-91) as a recipient of its inaugural Leadership in Commerce Award, recognizing his role in establishing the North Carolina General Assembly's bipartisan Cigar Caucus.
CAA President Scott Pearce said, "Chairman Hall deserves all the credit for establishing the North Carolina Cigar Caucus, which includes members of both chambers of the state's General Assembly." "This caucus is an important link to North Carolina's tobacco heritage, connecting agriculture, manufacturing and specialty retailers with legislators in the state," Pearce added.
The pattern is clear. With registered lobbyists in 47 states, CAA has seen a wave of successes in state capitals during the 2026 legislative sessions, and additional awards will be announced in the coming weeks. This is a coordinated nationwide campaign, and South Dakota's HB 1215 is one of its most concrete victories so far. When a state that had effectively shut the door on new cigar bars for over a decade reverses course by codifying local licensing authority — and does so with bipartisan structural logic rather than pure industry lobbying — it becomes a model worth replicating.
The Men Behind the Law
Will Mortenson: The Legislator Who Did the Work
Mortenson, a Republican from Fort Pierre who served as House Majority Leader, represents the kind of state legislator who actually reads bills before he introduces them. His push for HB 1215 was not the act of a tobacco industry stooge — it was a principled argument about economic freedom and local governance. He had been one of the more intellectually active members of the South Dakota House, frequently writing publicly about the connection between economic policy, education funding, and state revenue, and his cigar bar bill fit neatly into a broader philosophy: government should open doors where it can, and let communities decide what walks through them.
CAA President Scott Pearce says Mortenson was pivotal in the legislature for working to license cigar bars, and that Mortenson and Rhoden demonstrated vital leadership to support small businesses in South Dakota — leadership that is exactly what the new award is meant to recognize. The bill moved efficiently. Introduced in January, it passed quite easily in both the state House and Senate. That kind of smooth passage through a state legislature doesn't happen by accident. It requires a sponsor who can sell the idea to colleagues, neutralize opposition, and keep the bill from dying in committee — the fate of most niche-industry legislation.
Governor Larry Rhoden: Signing It Into Principle
Rhoden didn't just sign HB 1215 because it landed on his desk. He actively embraced it. The bill was brought by Republican Rep. Will Mortenson, who said the bill puts the choice of offering a cigar bar license in the hands of local governments. Rhoden publicly described the bill as an "Open for Opportunity" measure — language that tells you something about how he wanted it understood. This wasn't about cigars specifically. It was about the state government getting out of the way of entrepreneurs who want to build something.
Rhoden received the award for signing HB 1215 into law. His willingness to attach his name and political capital to a piece of legislation that critics would inevitably frame as a rollback of public health protections — critics said it weakens the state's smoking ban — reflects a governor comfortable making decisions on principle rather than optics. In today's political environment, where every bill gets filtered through a media lens looking for the most alarming possible framing, that's rarer than it should be.
The Historical Context: Sixteen Years of Locked Humidor Doors
The story of South Dakota's cigar bar freeze is a familiar one to anyone who has followed premium tobacco regulation at the state level. In 2002, a smoking ban was passed in South Dakota which included many indoor businesses, but bars, casinos, and restaurants were exempt from that ban. Then in 2009, South Dakota legislators passed a law to extend the smoking ban to the bars, restaurants, and casinos. The 2009 extension, which went into effect in 2010, meant smoking was no longer allowed in bars, video lottery establishments, restaurants, and casinos.
For cigar bars, the 2010 implementation date became the dividing line between those who survived and those who never got the chance to open. Previously, the state's 2008 Clean Air Act had grandfathered just three cigar bars and prohibited the issuing of any new licenses. Those three establishments — wherever they sit in South Dakota — have had an involuntary monopoly for over a decade and a half. New competition, new concepts, new venues: all legally blocked. The market was frozen in amber.
Nationally, the patchwork of cigar bar regulations has always been complicated. Many states exempt or do not cover casinos, private clubs, cigar bars, or certain small workplaces from their general smoking bans. South Dakota's pre-HB 1215 approach was more restrictive than most, since even the grandfathered exemptions were never intended to grow. What Mortenson and Rhoden did was move South Dakota into alignment with a more nuanced regulatory posture — one that distinguishes between a sports bar where someone lights a cigarette and a purpose-built premium cigar lounge with ventilation systems, humidors, and a clientele that knows exactly what it's walking into.
The parallel with Connecticut is instructive. Connecticut has been trending in a more cigar-friendly direction; in 2024, it passed a bill allowing for new cigar bars for the first time in 20 years. South Dakota followed a similar trajectory, just two years later. The message in both cases is the same: total prohibition of new cigar bars is a policy that even heavily regulated states are beginning to reconsider.
What This Means for the Premium Cigar Industry Writ Large
Premium cigar culture in America has always been more resilient than its critics expected. The market didn't collapse when federal regulations tightened. It didn't disappear when indoor smoking bans swept through state after state in the 2000s and 2010s. It adapted, went private in some cases, leaned harder into mail-order and online retail in others, and waited for the regulatory tide to shift. In 2026, that tide is showing signs of movement.
South Dakota's HB 1215 matters not because it will suddenly transform Pierre into Havana. The state's population limits how many establishments can realistically open. What it matters for is precedent. Every state where the cigar bar licensing framework is frozen in place has legislators looking at what their neighbors do. When South Dakota passes a clean, locally-controlled, business-friendly bill and a governor signs it without political drama, that becomes a data point in every other statehouse conversation.
The CAA's decision to formalize that acknowledgment with a named award — and to announce multiple recipients in the same legislative season — tells you the organization is building a deliberate infrastructure of political relationships. CAA President Scott Pearce said the North Carolina caucus strengthens ties between lawmakers and the state's tobacco agriculture, manufacturing, and premium cigar retail sectors, and the association, which is backed by registered lobbyists in 47 states, said additional Leadership in Commerce Award recipients will be announced following the 2026 legislative sessions. That's not a trade group handing out crystal plaques at a banquet. That's an organization systematically cultivating allies, state by state, and making those allies visible to one another.
The Broader Debate: Liberty, Local Control, and the Limits of Public Health Regulation
No honest accounting of this story can ignore the fact that HB 1215 had critics. Critics said it weakens the state's smoking ban. That's a legitimate argument, not a fringe position. The public health case against indoor smoking is well-established, and any exemption to a smoking ban can be framed as an erosion of the broader standard. The question is whether that framing accounts for the meaningful difference between, say, a restaurant where a customer lights up uninvited next to a family eating dinner, and a purpose-built cigar bar where every adult who walks through the door does so knowing exactly what the atmosphere will be.
Mortenson's argument — that local governments are best positioned to make that call for their own communities — is not a dismissal of public health. It's a recognition that regulatory frameworks should be precise enough to distinguish between different kinds of venues and different levels of voluntary exposure. The bill's requirements for ventilation, enclosed spaces, and meaningful cigar-sales revenue thresholds are the legislative equivalent of drawing that line. You can't just hang a "Cigar Bar" sign and call it done.
For men who value both freedom and responsibility, that kind of nuanced approach to regulation is exactly what good governance looks like. It doesn't tell you what you can enjoy. It sets the conditions under which businesses can offer that enjoyment, ensures communities have a meaningful say in whether they want such establishments, and gets out of the way. HB 1215, whatever its critics say, is a model of that approach done competently.
Looking Ahead: Cigar Bars as Small Business Incubators
There's a version of this story that's purely about cigars — about lounges and humidors and the right to enjoy a well-made premium stick in a comfortable room with a decent pour of whiskey. That version is true, and it matters. But there's also a business story here that doesn't get told often enough.
Cigar bars are, almost by definition, small businesses. They are independent, locally owned, high-touch retail and hospitality operations that generate sales tax revenue, employ staff, attract foot traffic, and anchor neighborhoods. The grandfathered three that survived South Dakota's 2010 freeze have had sixteen years to demonstrate exactly that. HB 1215 opens the door for new entrepreneurs to make the same case in cities and counties that now have the legal tools to grant them a license.
That's what the CAA means when it describes Rhoden and Mortenson as leaders who supported small businesses in South Dakota. The cigar bar isn't just a lifestyle venue — it's a local economy node that had been legislated out of existence for over a decade. Bringing it back, carefully and with local control baked in, is a genuine economic development move, not just an industry handout.
For everyone who has driven past a shuttered storefront in a downtown South Dakota block and wondered what it would take to get something interesting in there: the answer, at least in part, just got a little clearer. The humidor light is back on. The governor signed it. The legislature passed it easily. And Washington just handed out its first-ever awards to the people who made it happen.
