RYO Cigarette Stores Business End Soon

The “roll-your-own” machines at Holy Smokes in La Crosse will continue to crank out cigarettes for now, but their days likely are numbered. The $105 billion federal transportation bill that passed Friday included an amendment reclassifying businesses with the machines as tobacco manufacturers, which would require that they obtain permits, put health warnings on packs and pay taxes on the cigarettes made. “When it slipped in, no one even knew about it,” said Craig Squires, co-owner of La Crosse’s two Holy Smokes shops. “Shutting us down is one little paragraph.” It’s the latest attempt to stem the growing roll-your-own business, which opponents argue sidesteps both cigarette taxes and the higher prices designed to discourage smoking for health reasons. The tobacco industry, too, complained the roll-your-own vendors had an unfair advantage, as they could offer the equivalent of a carton of cigarettes at about half the price of major brands. Shops that have the machines sell pipe-style loose tobacco, papers and other supplies, and then charge a fee to use the machine. Holy Smokes customers pay about $30 to produce about 200 cigarettes in 10 minutes. Squires characterized the federal amendment as “big business trying to get us out.” It’s not the first time they’ve been threatened since opening the first store at 1103 Rose St. in April 2011. The state Department of Revenue in October had ordered the machines removed under an existing law that required manufacturing and distribution permits to make cigarettes. But that was put on hold pending a decision on a court challenge, allowing Squires and partner Josh Winrich to add the 4010 Mormon Coulee Road location that same month. Lon Chester, co-owner of eight Discount Smokes stores in the state, said they shut down their machines Saturday but will remain open for the next couple of weeks in the hope a similar restraining order can be secured against the federal law. “We figure in two weeks we’ll be back up and rolling,” he said. But Squires fears the federal action will be beyond such legal maneuvers. They’ll keeping their three machines going as long as they can, until the president signs the bill into law. While his stores have diversified enough to remain open, Squires wonders about other shops that rely heavily on sales generated by the machines, which cost about $32,500 each. Wayne Johnson, a Holy Smokes owner in Holmen, said he cut store hours “to ride the storm out for right now.” And Jeff Larsen, who owns Holy Smokes in Tomah, one of the first such stores to open in Wisconsin, said while he plans to keep his three stores open long enough to see whether the federal legislation will stand, he, too, knows of shops that will be forced out. “I really think it’s going to hurt us bad,” he said. “This is the best time of year for us.”