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Archive for Saturday, March 24, 2012

State shuts down roll-your-own cigarette machines

Safety issues cited, but some suspect that tax revenue may also be an issue

March 24, 2012

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Agents with the Kansas Department of Revenue have shut down the operations of about 20 businesses across the state that offer “roll your own cigarette” services, after state regulators determined the sites were operating as unlicensed manufacturers of tobacco products.

Two Lawrence businesses — UCF Half Price Smokes at 2540 Iowa and also at 601 Kasold — have closed after regulators said the businesses could face up to a $10,000 per day fine if they continued to allow customers to use an in-store machine that rolls up to 200 cigarettes in about eight minutes. Operators in Wichita, Salina, Manhattan and several other Kansas cities also were ordered to shut down the machines.

“Our problem is we don’t know what is coming out of those machines,” said Seth Valerius, general counsel for the Kansas State Fire Marshal’s Office. “We don’t know if unsafe cigarettes are coming out of them.”

Specifically, the fire marshal’s office is concerned the cigarettes are being made with a rolling paper that does not meet safety standards designed to ensure a cigarette will extinguish itself if left unsmoked for an extended period. State law requires cigarettes sold in the state to use such paper to cut down on the amount of smoking-related fires.

But there is another twist to the issue. People who use the in-store machines to roll their own cigarettes pay significantly less in state cigarette taxes than do people who buy cigarettes from a traditional retailer. The state charges about $8 in cigarette taxes for a carton of 200 cigarettes. Customers who use the machine, do not pay the cigarette tax because they are not technically purchasing cigarettes. Instead, the businesses argue, customers are purchasing loose leaf tobacco, rolling papers and are renting the services of the machine. Store employees don’t do any of the rolling of the cigarettes. Customers are required to operate the machine on their own.

But Valerius said the state’s crackdown on the roll-your-own operators was motivated by fire safety issues, not tax issues. The Kansas Department of Revenue and the office of the Kansas Attorney General, however, also were involved in the decision to take action against the businesses.

But RYO Machines — the Ohio based company that makes the in-store rolling machines — isn’t convinced fire safety is the only issue at play. That’s because the state is making no effort to stop individuals from using smaller home-based machines to roll their own cigarettes. Those home-rolled cigarettes have the same fire safety issues as the cigarettes produced by the in-store machines.

“If these machines are shut down, there is still a very clear market of folks who will roll their own cigarettes at home,” said Bea Gonzalez, a spokeswoman for RYO Machines. “If fire safety is the concern, what’s the difference if they are rolled at home or at a store.”

Bob Peckinpaugh, owner of the two Lawrence stores, said he’s simply been left dazed by the whole matter. He said he spent $30,000 apiece for the two machines — which are computerized and about the size of a vending machine. Unlike some other owners of the machines in the state, his entire business was built around the roll-your-own concept. Some other owners had machines in convenience stores or in their broader tobacco shops.

“I thought the state was trying to create small businesses,” said Peckinpaugh. “It doesn’t look like they try very hard to support them once they’re created.”

Valerius insists the state is not trying to run the companies out of business. He said the machines can continue to be used if the owners receive a cigarette manufacturing license, and submit the various varieties of cigarettes produced by the machine to an industry-approved testing group.

Gonzalez said the state’s actions, however, amounts to a de facto ban on use of the machines in the state. That’s because the specialty-rolling paper the state is insisting upon isn’t available for purchase. The major tobacco companies hold patents on the specialized paper. Gonzalez said she hopes the state can be persuaded to give the company up to two years to find a manufacturer who could supply the paper for commercial sale.

But she said the requirement that each business be licensed as a manufacturer of cigarettes is problematic. That would require a federal permit, but currently there is a moratorium on such permits. The manufacturer’s license also would require the retailers to start charging the state’s cigarette tax, which likely would cut into the businesses’ appeal.

“People like the product, but they really like the price,” said Peckinpaugh, who said his customers were able to roll a carton of 200 cigarettes for about $26.

Valerius said he wasn’t aware of potential hurdles for the businesses to obtain a manufacturer’s license, but he said he thinks the public safety issue involved with the roll-your-own movement is significant.

“Back in the old days, a cigarette would keep burning even after you stopped puffing on it,” Valerius said. “Basically, people would fall asleep smoking, burn their house down and often die in the process. That is what we’re trying to prevent.”

Comments

Ron Holzwarth 2 years, 9 months ago

Sure, the unsmoked ones! You can leave them around your house for years, and there is no risk at all.

smokefree 2 years, 8 months ago

Well, the word 'safe' and 'cigarettes' are oxymorons since if used as directed, smoking cigarettes will eventually kill the user and those that they live with - so it is definitely not safe.

However, there is such a thing as a fire-safe cigarette which was passed by the Kansas state legislature and became effective on 7/1/09. It requires all manufactured packs of cigarettes that are sold in Kansas be certified they are fire-safe cigarettes - in other words, the cancer stick that is lit will extinguish itself if not inhaled after a short period of time. This has been proven to prevent numerous fires caused by careless smoking, thereby saving many lives and property damage.

With Roll-Your-Own cigarettes, the purchaser is not buying firesafe cigarettes. So the purchaser, their family and anyone else that may live adjacent to their home or apartment could go up in smoke if there is a careless smoker and a fire results.

Although this lifesaving law has been on the books for nearly three years, the tobacco industry was well aware and capable to produce firesafe cigarettes many years ago, but chose to resist and fight lawmakers on doing so because of their greed. You see, before firesafe cigarettes became the law, once you lit a cigarette it would continue to burn to the end whether it was smoked or not. But now, if a cigarette is not smoked it will go out. The smoker then can relight the same cigarette and therefore take longer to use up a pack - in the eyes of the tobacco industry that means less cigarettes sold regardless if casualties or property damage is prevented.

ljwhirled 2 years, 9 months ago

They are using a loophole in the law to shut down a business that is using a loophole in the law to evade taxes.

Lawyers. Can't live with them, can't kill them fast enough to not need one.

Ron Holzwarth 2 years, 9 months ago

What a riot! Right above the comments at the moment, there is an ad. I'll clip and paste:

Cigarette Rolling Machine
10+ Rolling Machines Shop, Compare and Save at Pronto.
RollingMachine.Pronto.com

deec 2 years, 9 months ago

It's not about the money...sure it's not. And I have a bridge in Brooklyn I'll be happy to sell you.

ljwhirled 2 years, 9 months ago

Taxes on cigarettes (a social cost) = good.

Taxes on wages ( a social revenue source) = bad

Taxes on pollution (a social cost) = good

Taxes on telecommunicaions services (a social revenue source) = bad

You got to pay taxes on something if you want roads, schools, cops and fire protection.

I'd rather it be on a behavior that costs our society money than a behavior that benefits society.

deec 2 years, 9 months ago

What if the use of the machine was free, and he sold prepaid electricity minutes to the nearby outlet? :)

Ron Holzwarth 2 years, 9 months ago

Or maybe the usage of the machine could be rented by the minute.

MarcoPogo 2 years, 9 months ago

The one-handed rollers didn't give a crap before this happened so who cares what's amusing them now?

classclown 2 years, 9 months ago

How long before we start seeing these machines hanging out in alleys clinging to the shadows?

Or perhaps in a couple of years there will be a big story in the paper. After months of stakeouts, police will raid a house on the fringes of the city limits taking down an operation where 'several' of these machines were in use.

Ron Holzwarth 2 years, 9 months ago

That's a very good use for the taxpayer's dollars, instead of apprehending the perpetrators of violent crimes, or paying off the national deficit!

I believe I was complaining about that subject quite loudly not very long ago.

tyson travis 2 years, 9 months ago

I'm a non-smoker. Didn't see this metioned in the article or comments, but is there any problem with customers bringing in weed to either mix with tobacco, or roll straight joints using these machines? I'd be more concerned about this than about the presence of self-extinguishing paper. Hope these places use some supervision on this.

Shane Garrett 2 years, 9 months ago

wow! anybody got enough weed for 200 fatties? LOL

JackMcKee 2 years, 9 months ago

what an excellent concern. potheads have such a hard time rolling joints.

John Hamm 2 years, 9 months ago

“Our problem is we don’t know what is coming out of those machines,” said Seth Valerius, general counsel for the Kansas State Fire Marshal’s Office. “We don’t know if unsafe cigarettes are coming out of them.” Brahahahahahahahahahaha But what they do know is $8.00 a carton in Kansas Cigarette taxes aren't coming out of them either...........

speckleddog 2 years, 8 months ago

The State Fire Marshal does not enforce tax laws.

sr80 2 years, 9 months ago

Big Brother is concerned for my safety, isn't that a sweet thing. I don't know how i have survived without him. Pffftttt!!!!

ljwhirled 2 years, 9 months ago

Big brother doesn't want to pay the healthcare costs associated with your smoking habit.

Neither do I.

Quit smoking or advocate to opt out of medicare and medicaid. I don't want to have to pay for your bad behavior.

Jimo 2 years, 9 months ago

Can't shut them down on Indian reservations. (Hint)

JackMcKee 2 years, 9 months ago

shouldn't the state be dealing with the unsafe paper directly instead of totally unrelated rolling machines? The people in Topeka are either really dumb or they think we are. I'm getting a little fed up with the nonsense coming out of that place.

Ron Holzwarth 2 years, 9 months ago

It seems to me that they're not that bright in Washington, DC these days either.

But that's just my opinion, of course. I could be wrong, maybe wars, inflation, and running up the national deficit are good things.

JackMcKee 2 years, 9 months ago

Washington D.C. at least has a semblance of bipartisanship. In Kansas we're currently living under a dictator. And one that is apparently none too bright.

JackMcKee 2 years, 9 months ago

This should also lead to more pointless and unnecessary litigation courtesy of #heblowsalot. This guy is going to end up costing the state millions in attorney fees. What a buffoon.

notorious_agenda 2 years, 9 months ago

The paper that self extinguishes makes me physically ill so i can only smoke 2/3 of a ciggarette. It makes my stomach sour and tastes like a chemical. Yes i'm addicted, Yes it's my choice to smoke, but why do all of you people get to tell me I that have to smoke an additional sickening chemical if I smoke.

ljwhirled 2 years, 9 months ago

If you smoke, the paper is the least of your worries.

Quit. Quit now. Invest the money you save in an S&P 500 mutual fund and get an extra $500,000 in retirement.

You can quit. I did and so did tens of millions of other Americans.

Smoking is the single worst thing you can do to your health. Quit now, you can't buy health.

lunacydetector 2 years, 9 months ago

Zig zags are safe from competition. Thank you zig zag lobby

RolBUTTS 2 years, 8 months ago

Just follow the money trail and there within lies your correct answer. Big tobacco and big government washing one another hands. Be careful, Big Bro is tyring to get after you for going to McDonalds to often; what's next Dairy Queen raids becasue they make hot fudge sundaes that can't be healthy for you? "OK" send the milkman they've been unemployed for many years.

motor 2 years, 6 months ago

The cigarette production its monopoly by government ...now the competition is on the way (roll-your-own cigarette) for under $3 ...what is the problem ??? ...where is our rights ??? now the cigarette is $5-8 per pack .... what is gonna be next $ 10 may be $20 ??? how many taxes we have to pay ....when you get payed you have to pay taxes ...when you buy something you pay taxes again ....property taxes ..... little too much, i think !!!

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