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Roll Your Own

Roll Your Own

 


What is a Roll-Your-Own Cigarette?

 

A roll-your-own cigarette (RYO) is a cigarette that is made with loose tobacco and a rolling paper.  RYO products often include a bag of loose tobacco, and these pouches sometimes come with rolling papers as well.

Some smokers preferred RYO products because they were cheaper and it allowed them to receive more nicotine than manufactured products on the market.  However, the cost of these products has sky rocketed in since 2009 after President Obama signed a piece of legislation that provided tax exemptions for RYO products.  The president also signed a piece of legislation in 2012 that end tax exemptions for manufacturers of RYO cigarettes. 

 

Increased Taxes on Roll-Your-Own Products Since 2009

 

In 2009, Congress expanded the State Children’s Health Insurance Program, and the expansion partly possible because the program raised taxes on cigarettes by 158 percent.  The tax went from $19.50 per thousand cigarettes to $50.33 per thousand cigarettes.  Congress expected consumers, and especially teenagers, to switch to roll-your-own products after the tax hike, so they hiked taxes on RYO products as well. 

 

The taxes on RYO products increased from $1.10 per pound to $24.78 per pound, an increase of 2,159 percent.  Taxes on small cigars increased as well, from $1.83 per thousand to $50.33 per thousand—an increase of 2,653 percent.  The tax hikes were strongly supported by the Campaign for Tobacco-Free Kids, the American Medical Association, the American Cancer Society, and the American Lung Association.

 

Since the take hikes, RYO sales have decreased by as much as 74%, but pipe tobacco sales have increased by more than 10%.  Here’s why.  Taxes on pipe tobacco only increased by 158%, and taxes on large cigars only increased by 155%.

 

Many manufacturers of RYO products began to advertise their products as pipe tobacco to avoid the tax increase.  There has also been an increase in commercial RYO machines that allow consumers to purchase tobacco and then place it in the machine that can role about 200 cigarettes in only a couple minutes.  These initiatives have allowed RYO manufacturers to avoid increased taxes, but President Obama signed a bill in 2012 that redefined tobacco manufacturers. 

 

Numerous Roll-Your-Own Cigarettes Stores Going Out of Business

 

On July 6, 2012, President Obama made a small amendment in the Federal Transportation Bill that redefined a tobacco manufacturer.  The bill states that any business with a RYO cigarette machine now classifies as a tobacco manufacturer and is subject to the same taxes for packaged cigarettes. 

The bill was signed after the Government Accountability Office save a huge increase in pipe tobacco sales.  The increase was due to increased taxes on RYO tobacco, so many consumers started using pipe tobacco in their rolled cigarettes because pipe tobacco was taxed less. 

 

The bill has caused several businesses to close their doors because the RYO cigarettes machines were expensive and the investment never paid for itself in time.  Opponents of the bill claim that consumers will still find a way to find cheap tobacco. 

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