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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

motor 1 year, 10 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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RolBUTTS 2 years 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.

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lunacydetector 2 years ago

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

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notorious_agenda 2 years 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.

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JackMcKee 2 years 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.

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Jimo 2 years ago

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

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sr80 2 years 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!!!!

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OonlyBonly 2 years 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...........

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jazzttt 2 years 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.

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classclown 2 years 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.

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its_just_math 2 years ago

Legendary one-handed rollers are laughing at this.

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grammaddy 2 years ago

Roll 'em yourself, or stop smoking.

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deec 2 years ago

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

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FalseHopeNoChange 2 years ago

The governments tax "take" is down from straights sold at stores. All of the "anti-smoking" ferver from the emotional "Liberaltines" has hurt government (which btw are people too) pocket book. Government ain't making the "green" like they used to. "Ban smoking!" screams is decreasing the government's take of sales tax. Government pimps need their straights to make more money.

Of course they have to "shut" down roll your own shops. They are cutting even more into to their tax stealing operation.

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Flap Doodle 2 years ago

Smoke 'em if you got 'em.

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irvan moore 2 years ago

seth is not a rocket scientist is he

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deec 2 years 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.

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Ron Holzwarth 2 years 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
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Roland Gunslinger 2 years ago

So if you roll it by hand and burn down your house you're cool. Use an automated machine to roll it and you're in violation of the law.

Stupid. Where's the Office of the Repealer when you need it?

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overthemoon 2 years ago

Ummm...are there 'safe' cigarettes?

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