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Video: Smoke Shop Makes a Killing With Roll-Your-Own

The Fix visits a controversial store that allows smokers to bypass New York cigarette taxes.

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A customer rolls his own at Island Smokes.

By Luke Walker

12/15/11

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By 10:00 am, a ragtag posse of nicotine addicts has gathered outside Island Smokes, a tobacco shop in Chinatown, waiting for it to open. They don’t seem to mind the delay, although they're getting fidgety. “You know how much a carton of Bloomberg smokes costs?” shouts one raspy-voiced man. “$120 dollas! This is the only way man, the only way!” The company's two stores, in Manhattan and Staten Island, have found a creative way to bypass New York's sky-high cigarette tax, which has pushed a pack of smokes above $14. Here, you pay a sticker price circa 1993. The novel approach is selling organic, loose tobacco, and letting clients use 11 in-house electronic rolling machines to make perfect, out-of-the-box cigarettes with filters. State law requires packaged cigarettes to carry a minimum of $5.85 tax, on top of $1.01 federal tax. When added to state and federal minimum retail price guidelines, the expense is a powerful deterrent to smokers. But loose tobacco can be sold with only standard sales tax added on.

The brainchild of retired NYPD Officer Pat Donnelly, Island Smokes is controversial. The city accuses it of manufacturing—a legal violation—and has filed suit. And city attorneys accuse it of tax evasion for not imposing the packaged cigs taxes. "No one would claim that Ikea is not selling furniture just because the clients have to assemble that," says city attorney Eric Proshansky. But for now, Island Smokes rolls on, and the low prices pull in customers. Francesco del Core, an Italian exchange student who travels from Brooklyn to buy his cigarettes from Island Smokes, likes the tobacco taste there, but admits cost is the biggest factor: “It’s so much cheaper than buying a pack from the store­—it only takes me three minutes to make a pack using their machines, so it’s worth the trip.”

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