Eric Schneiderman Takes On Small Tobacco; AG's Office Suing Two Roll-Your-Own Cigarette Businesses

Bad news, hipsters...

Apparently out of bigger fish to fry, New York Attorney General Eric Schneiderman -- in cahoots with New York City Corporation Counsel Michael Cordoza -- has set his sights on small tobacco; he's filed lawsuits against two roll-your-own cigarette businesses in New York City for allegedly evading state cigarette taxes.

Additionally, Schneiderman says, the two businesses -- BB's Corner, at 8415 18th Avenue in Brooklyn, and Nitecap Entertainment, at 690 Gulf Avenue in Staten Island -- sold cigarettes that weren't rolled with "fire safe" rolling papers, which violates New York's Cigarette Fire Safety Act.

The businesses, it seems, thought they found a loophole in the state's cigarette tax code -- but they screwed it up, and brought on the wrath of Schneiderman (more on that below).

Here's how their operations worked: rather than selling tobacco, the businesses claimed to essentially be renting the equipment needed to roll your own cigarettes. If you happen to find some tobacco and rolling papers kickin' around the store (which you will), lucky you.

By claiming to not technically be selling tobacco, the two businesses avoided paying state cigarette taxes.

However, they were done in by advertising -- according to Schneiderman, the businesses advertised their cigarette factories with promises of "200 count cartons" of "smokes" for "$29.95 per carton," which is less than half of the amount the tax would be on a regular carton of cigarettes.

"Rather than playing by the rules, these stores and others like them are cheating the State and City of New York out of millions of dollars per year in legitimate tax revenue and endangering public health and safety while they're doing it," Schneiderman says.

But it's not just the money that has Schneiderman's panties in a bunch, he's also concerned about the health risks of selling smokes on the cheap.

"The illegally low prices these businesses are charging for their store-made machine-rolled cigarettes have been shown time and again to encourage people to take up smoking and to discourage smokers from quitting," he says.

Both businesses have been forced to shut their doors thanks to Schneiderman's lawsuit.

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