Genesee County roll-your-own cigarette stores feel impact of federal state tobacco laws

Five customers walked out the door of Roll N’ Smokes unhappy and without their cigarettes. “Daily sales, we went from profiting probably close to $1,000 a day and now we are doing about $100 a day after overhead,” owner Rob Bitz said on Friday while sitting at one of the tables in the business, located near Corunna and Linden roads. “It’s probably 80 to 90 percent decrease in profit. “That’s why we are bringing in more things. We need to get it up more to 30 40 percent profit margin to stay in business.”

Bitz, who owns roll-your-own cigarette stores in Flint, Owosso and Lansing, is struggling to keep afloat following federal and state laws that first raised taxes and then criminalized machines that allowed smokers to make their own cigarettes. It was in June when the Gov. Rick Snyder signed a bill that forced tobacco products from the machines to comply with all taxes imposed on cigarettes. The state estimated cigarette manufacturers pay $35 more in taxes per carton of cigarettes. Less than a month later, a federal law banning the machines was signed by President Barak Obama.

Supporters of the law contended there was a loophole allowing the businesses to escape paying federal taxes on tobacco meant for cigarettes, not pipes. Loose pipe tobacco is taxed at a $2.83 a pound, while loose cigarette tobacco is taxed at a rate of $24.78 a pound. Eliminating the use of the machines has resulted in a severe drop in business, said Bitz, who opened his stores in 2010. “We’ve had to cut people’s jobs, we’ve had to cut hours, we’ve had to invest in a lot more inventory,” he said. Some of that new inventory includes home brewing kits and small electronic rollers that allow a smoker to make their cigarettes at home.

A pallet of the small rolling machines cost Bitz $20,000. The devices range from about $6 to $450 apiece. “We already spent $65,000 per store on two machines we can’t use now,” he said. “We don’t have that income anymore. For every person that came into the store, we used to make $10, $15 a person. When you are doing that 60 to 70 times a day, that’s like someone taking $5,000 to $500 out of your pocket.” In May, legislation was introduced to make the tax on all tobacco products the same as cigarettes. No action on the matter has been reported. “If they really want to force the rest of the people that are trying to stay open out of business, then they will probably do that,” Bitz said. Raising the tax on pipe tobacco could also have an impact on a long-standing Flint business, Paul’s Pipe Shop on Saginaw Street.

The family-owned business was started in 1928 by Paul Spaniola in Mount Morris and moved to Flint in 1944. “Been here ever since,” said Paul’s son, Daniel Spaniola, who now runs it for his 99-year-old father. The business deals mostly in pipes, tobacco, cigars and mini cigars. By Spaniola's own account, the store has thousands of different kinds of pipes in the store. “We make our own pipes,” Daniel said. “He’s more into the pipe and tobacco blending than he is into the cigars and the other stuff. We carry them just for our customers’ convenience.” Despite changing attitudes about smoking, the store has stayed open, but Daniel said times have changed. “It’s gotten a lot slower,” he said. “I can remember as a kid we were busy, busy, busy and I’m sure it’s because of the new anti-smoking laws and the tobacco tax.”