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.