According to the Associated Press, the new law affecting roll-your-own shops will generate nearly $100 million annually in government revenue.
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It's all about money.
“This law is not designed for people to comply with,” said Phil Acordino, president of RYO Machines, which began manufacturing roll-your-own cigarette machines in 2008.
“It’s designed to put these people out of business," he said. "They couldn’t get a manufacturer’s permit if they wanted to.”
The tax difference led to a flood of mom-and-pops that started selling loose tobacco, instead of major cigarette brands. Around 1,000 stores in 42 states installed roughly 2,000 roll-your-own machines, according to RYO Machines.
According to the Associated Press, the new law affecting roll-your-own shops will generate nearly $100 million annually in government revenue.
“It’s quite clear that this is politicians and big tobacco working against small businesses,” Smith said.
It’s true the Altria-owned tobacco giant Philip Morris USA has been a strong backer of the federal legislation.
Liggett Group says it’s losing sales to the roll-your-own upstarts. The discount tobacco maker and Altria Group Inc. (MO) are fighting alongside health advocates -- after decades at odds -- to press Congress and the Food and Drug Administration to equalize tax payments on various forms of tobacco and to enforce the same health rules imposed on major producers.