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Columbia tobacco store struggles after change in tobacco rolling law

Friday, November 9, 2012 | 6:00 a.m. CST; updated 1:43 p.m. CST, Saturday, November 10, 2012
Bruce Hendren stands in front of his $32,000 cigarette rolling machine at Roll On on Tuesday. The machine is capable of rolling a carton of cigarettes with fresh tobacco in about 10 minutes. A July 2012 Highway bill had a small amendment attached that labeled Hendren a cigarette manufacturer, so he has ceased use of the machine.

COLUMBIA — June 28 marked the one-year anniversary for downtown tobacco store Roll On, which caters to customers who like to customize their cigarettes.

Owner Bruce Hendren’s excitement ended that day when he answered his phone.   

He learned that tobacco rolling machines, the basis of his business, had to be turned off within the week. 

“I went from being the happiest person I knew, to devastated in just eight hours,” Hendren said. “I felt like I got kicked in the teeth.”

Until about four months ago, Roll On’s main attraction was the RYO Filling Station, a machine that allowed customers to make 10 packs of cigarettes for less than half the price of large tobacco brands. Customers could roll 200 cigarettes in eight minutes for $24.95. 

New law curbed use of rolling machines

Then in July, President Barack Obama signed a bill that required retail shops to comply with the same rules as tobacco companies. That meant these shops could not produce cigarettes in bulk and sell them without obtaining permits, accepting a higher tax rate and other requirements tobacco manufacturers must adhere to.

Once Hendren turned the machine off, he said Roll On's sales were cut by more than half. Now he said he is still in debt for the money he owes on the idle, $30,000 machine and must borrow money to keep his doors open.

“People used to be coming and going,” Hendren said, as he looked around his empty store. “It was almost like a social club.”

Hendren said he laid off all of his employees.

“In June, there were 240 hours on the payroll,” Hendren said. “This month, there will be zero.”

Hendren, who grew up in Columbia, modeled Roll On after a tobacco store he stumbled upon in Florida a few years ago. He said he was astounded by the concept  of a shop where one could roll cigarettes cheaply and quickly. 

“It was one of those things that just seemed too good to be true,” he said.

Initially, owner saw minimal risk

Hendren knew Missouri had one of the lowest taxes on tobacco products and thought after seeing the success of the shop in Florida, one would do well in Columbia. He had formulas to show people how to create tobacco blends similar to name-brand cigarettes.

There seemed to be no downside, he said. “Good market, good product, great value. From there it was just about treating people right when they walked into your store so they would come back. I could do that.”

When Hendren's store opened in June 2011, he said it was profitable within six months.

“More people rolled their own cigarettes than I thought,” he said.

He was aware that a similar tobacco retailer in Ohio had gone to court after the federal government sued him in 2010 for producing cigarettes with rolling machines.

The court ultimately decided that retailers were not to be treated as manufacturers. Because the retailer won the legal battle, Hendren decided his risk was minimal.

“I had been told that the government acted slowly,” he said. “The window of opportunity seemed large enough that I could get the machine paid off before any legal action was taken. Because of the success against the law in Ohio, I thought it would uphold well if it went to court.”

Retailers cannot produce and sell in bulk

When Obama signed the law in July, it adopted the government's stance that tobacco shops could not be both manufacturers and retailers.

During the grace period after the bill was signed, Hendren told his customers they had one week to use the machine.

“We had our greatest sales that last week,” he said.  “The next weeks were tough though. People kept asking ‘what’s going on?’ and they still are.”

Roll On still sells loose tobacco, handheld rolling machines and other tobacco-related products. 

Chris Sinclair, public relations agent for tobacco retailers, thinks the intent of the law was to put small tobacco retailers out of business.

“It’s not right,” Sinclair said. “It is the quintessential David-and-Goliath story." 

He said retailers like Hendren are suffering around the country.

“The rug was pulled out from under them at the 11th hour — they are strong though, and they are going to keep fighting,” he said.

Proposition B posed another problem

Hendren was also worried that Proposition B, the initiative on Tuesday's ballot to levy higher taxes on tobacco, would hurt his business further. The proposition failed, with 51 percent of Missouri voters rejecting it.

Misty Snodgrass, Show-Me A Brighter Future spokeswoman and legislative and government affairs director of the American Cancer Society Cancer Action Network, worked hard for passage of Proposition B.

In a press release after the election, Snodgrass said, "This is a sad day for Missouri. While we respect the will of voters, we do not respect the last-ditch scare tactics tobacco companies used to confuse voters and thus preserve their profits from selling deadly, addictive products."

Although Proposition B did not pass, Hendren said he is just scraping by. Even if Roll On can stay open, his debt is daunting.

“We are really struggling,” he said. “It really is that bad.”

Supervising editor is Jeanne Abbott.


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Comments

Fritz Otweiler November 9, 2012 | 9:05 a.m.

"It seemed to be one of those things that was too good to be true."

(Report Comment)
L. F. November 9, 2012 | 10:08 a.m.

Isn't it interesting that the liberal town that we live in voted to re-elect a President that continues to take away the very liberties they enjoy. Mr. Hendren, please ask who your customers voted for...then ask them why? Then again, a President that said you did not build your business without the government's help, should have a right to sign laws that destroy it....no? It is indeed sad to see another small business that created jobs destroyed in a "free" market economy by government regulation.

(Report Comment)
Christopher Foote November 9, 2012 | 2:51 p.m.

@Larry,

The provision to label Mr. Hernden's business a cigarette manufacturer was tucked into the Highway Bill that passed this past summer. It was inserted on behalf of Philip Morris. The bill had to pass the Republican controlled house before the President can sign it. The provision in question, Section 100122 of the Highway Bill, was inserted by ...Representative Eric Cantor, the House Majority Leader. Note he is from Virginia and quite familiar with receiving checks from Altria (Philip Morris's parent company). Perhaps your opprobrium should be directed at those directly responsible for this assault on Liberty, the Republican House leadership.

(Report Comment)
hank ottinger November 9, 2012 | 3:55 p.m.

Informative post, Mr. Foote. I suspected there was more to it than President Obama's presumed ferocious attack on small businesses. Bless those corporations, eh?

(Report Comment)
Richard Saunders November 9, 2012 | 4:45 p.m.

Remember, it's not what drug you're on that's important, but whose!

As always, government is merely THE most organized form of crime. Pay your tribute, or get kicked to the curb.

(Report Comment)
L. F. November 13, 2012 | 2:39 p.m.

@Christopher,

Once again the educated are selective in their posts. The Democrat majority in the Senate had something to do with this approval as well and ultimately the President signed the Bill.

"WASHINGTON, D.C. -- A Senate-House conference committee last night approved legislation that would classify retailers who operate roll-your-own (RYO) cigarette machines as cigarette manufacturers. The provision is part of the bipartisan highway funding bill conference report HR 4348, which is expected to receive approval from both the Senate and the House of Representatives during its scheduled vote tomorrow. The current highway funding bill is set to expire June 30."

Perhaps your "opprobrium" should be directed at those directly responsible for this assault on Liberty, the Congress and the leadership of both parties. Please don't place the blame partially, only when it favors your side of the isle.

(Report Comment)

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