SS August 2016

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44 SMOKESHOP August 2016 M y ordeal began on the dark and stormy morning of July 14th, 2015, when five government agents burst into our offices, threatening and frightening my two girls who handle our packaging and shipping. The agents asked if they could enter as they pushed their way into the office. One of my girls bravely told them through her tears that it was polite to ask before entering—but it was already too late to ask while shoving her to the side. After eight months of lost revenue, arguing, debating, and fighting to protect all that my wife, my employees, and I had built, my company received its tobacco manufacturing license. After our initial manufacturer's audit by the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), I sat lis- tening to the U.S. Department of the Trea- sury's Alcohol and Tobacco Tax & Trade Bureau (TTB) agent tell me that his agency "really does not have enough auditors or agents" to enforce the 1953 tax act upon the other retailers in the country that he had just enforced upon my business. Further, he said that his agency does not really want to create another four or five thousand new tobacco manufacturers out of the current retail store community. As he left our offices, he said that I would do a great service to my retail brethren were I to be an ambassador to the retail tobacco industry on behalf of the TTB by telling them that their businesses were all illegal if they blended, packaged, or repackaged tobacco unless it was done in front of the customer and only upon demand. A retail tobacconist cannot prepack- age two ounce or half pound bags of to- bacco from the five pound bags that pipe tobacco normally is shipped in. Under the TTB's interpretation of the 1953 IRS Tax Act there is no way that a tobacconist can ship tobacco to customers in anything oth- er than the five pound package in which the tobacco was received from the manu- facturer or distributor. In a footnote which was an exception to some of the language in the tax law he enforced upon us, the re- tail tobacconist is performing the actions only allowed to those who hold manufac- turers licenses when repackaging tobacco. It is a violation to repackage—even with- out the action of blending. It is illegal to prepackage two ounce bags of your most popular tobaccos, making them ready for sale prior to being requested to do so by the final user. During slow times in the store, it is not legal to package tobacco to get ready for upcoming busier periods. It is not legal to package tobacco off-site from the retail store. Now, with the addition of new regu- lations through the U.S. Food and Drug Administration (FDA)'s issuance of the provisions of its "deeming regulations," it becomes even less clear as to where blend- ing and manufacturing differ. With both the "deeming regulations" and the TTB's interpretation of its own IRS regulations, it is really not possible to be a retail tobac- conist anymore. The contortion of the English language and circular arguments made by the smug, unregulated regulators of the FDA who participated in the May 25th webi- nar unveiling the new regulations would make any Orwellian debate coach proud. In government doublespeak, the chunk of briar and vulcanite stem which makes up a pipe is now classified as a tobacco prod- uct, and via such pronouncement could be taxed by weight as if it were made from tobacco. It was not long ago that I had to defend my business when the govern- ment was cracking down on glass pipes, which we do not carry, by saying that our wooden Dunhills, Nordings, Petersons, and Savinellis were fine collectibles and tobacco smoking pipes. Now to ward off the attacks on my products, need I defend my pipes by professing that they are tru- ly made for "dope smoking" in the states where recreational drugs are legal? REGULATION VIEWPOINT > A Warning to Fellow Pipe Tobacco Retailers: Meet the TTB Even without the FDA's new deeming regulations on pipe tobacco that appear to shut down in-store blending, few retailers are aware that the TTB already bans the practice—as well as merely repacking bulk blends—unless a manufacturing license in place. >BY IRA LAPIDES

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