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When When RYO Machine Rental LLC debuted its roll-your-own (RYO) cigarette machine in 2008, it never planned on such machines garnering so much national attention so soon.
The Cincinnati-based company’s inaugural year was slow; it produced only 10 machines. But when the feds came in, so did the orders from retailers.
The State Children’s Health Insurance Program (SCHIP) took effect in 2009, and RYO tobacco taxes skyrocketed 2,400% from $1.01 per pound to $24.78 per pound. Meanwhile, pipe tobacco merely doubled, going from $1.09 per pound to $2.83 per pound.
To circumvent the crippling tax on RYO, some manufacturers allegedly began labeling RYO as tobacco, used in the machines as pipe tobacco.
And RYO Machine Rental was an unexpected beneficiary.
