New law cripples roll-your-own cigarette shops

Two local roll-your-own cigarette shops are precariously close to being snuffed out by a new federal law. Save on pall mall Cigarettes owner Nick Patel, who has one shop in Racine and one in Mount Pleasant, said his sales were slashed by at least 90 percent when the Federal Transportation Funding Act was signed into law July 6. The act essentially defines retail shops with roll-your-own technology as manufacturers, requiring them to obtain a manufacturing permit to operate. Until July 6, Patel and other Wisconsin roll-your-own shops had been operating under a temporary injunction in a Dane County Circuit Court lawsuit expected to be decided later this year.

The Wisconsin Department of Revenue had been cracking down on the shops, maintaining they were evading taxes by claiming they were not manufacturers — even though cigarettes are made on site. But the federal law may make the lawsuit a moot point. RYO Machine of Girard, Ohio, which makes the machines used by Save on Cigarettes, has shut down its reload system, effectively idling its machines. RYO also warned its machine owners they are contractually obligated to obey all laws in operating its machines. Patel has reacted to the plunge in sales by dropping the hours at his 5201 Washington Ave. store from 74 a week to 30.

His store at 3745 Douglas Ave. had slightly shorter hours, but they have also been reduced to 30. Assuming the federal law stays as is, Patel said his chances of staying in business are “slight to none” unless sales of his other products increase significantly. Phil Accordino, president of RYO Machine, had no doubt Friday about his fate. “It was absolutely brilliant on the part of the cigarette companies,” he said. “No one saw this coming, and no one could stop it. “So I’m out of business,” along with his 45 employees. Accordino said that indirectly, manufacturing the machines supported more than 300 U.S. jobs. “There’s no chance, absolutely none, of this being reversed,” he said.

“And that’s the way it is.” For numerous reasons, Accordino said, calling roll-your-own shops manufacturers guarantees they will never get the very expensive permits. “The real travesty,” he said, “is that Congress decided who gets to win and who gets to lose in the marketplace.” Patel said some customers have been using his table-top rolling machines or buying one for home use. He still sells the pipe tobacco they roll cigarettes with and calls it a less dangerous product than what’s in a commercial cigarette.