New York Governor Kathy Hochul's recent budget proposal has sparked outrage among small business owners and fans of nicotine pouches, with many fearing that taxing these alternative products will fuel the black market.
Under Hochul's plan, Zyn – a popular nicotine pouch brand – would face a 75% tax rate, nearly doubling its current price tag. The increased cost would make it less competitive to traditional tobacco products like cigarettes, cigars, and chewing tobacco. As a result, some bodega owners are already reporting a lack of demand for Zyn.
"This is a problem with the government," said John Rani, a clerk at Bleecker Street Grocery, where Zyn is sold. "If you put a tax on it, everything goes to the black market, and local businesses will lose their customers."
Zyn's popularity has been rising rapidly since its introduction in the US around 10 years ago. Tobacco giant Philip Morris International acquired the brand's parent company for $16 billion in 2022 as part of its strategy to transition into a "smoke-free" company.
However, experts argue that nicotine pouches are just as addictive and pose similar health risks as cigarettes. The Centers for Disease Control and Prevention (CDC) has warned about the dangers of nicotine addiction, particularly among teenagers and young adults.
State finance officials project the tax would bring in $18 million in revenue in its first year, scaling up to around $50 million once fully implemented. However, opponents argue that this could drive even more tobacco products out of the legal market, ultimately benefiting the black market.
"This is a grave mistake for public health if you don't differentially tax," said University of Buffalo professor emeritus Lynn Kozlowski. "You make a mistake by keeping cigarettes much more expensive while taxing nicotine pouches similarly to other tobacco products."
While some states like Illinois and Washington have already started taxing alternative nicotine products, others are taking a more cautious approach. New Mexico lawmakers are considering expanding the state's tobacco tax to other nicotine products in the upcoming legislative session.
For now, leaders in the New York Senate and Assembly have yet to come out with a position on Hochul's tax proposal, which will be debated through a series of hearings until February.
Under Hochul's plan, Zyn – a popular nicotine pouch brand – would face a 75% tax rate, nearly doubling its current price tag. The increased cost would make it less competitive to traditional tobacco products like cigarettes, cigars, and chewing tobacco. As a result, some bodega owners are already reporting a lack of demand for Zyn.
"This is a problem with the government," said John Rani, a clerk at Bleecker Street Grocery, where Zyn is sold. "If you put a tax on it, everything goes to the black market, and local businesses will lose their customers."
Zyn's popularity has been rising rapidly since its introduction in the US around 10 years ago. Tobacco giant Philip Morris International acquired the brand's parent company for $16 billion in 2022 as part of its strategy to transition into a "smoke-free" company.
However, experts argue that nicotine pouches are just as addictive and pose similar health risks as cigarettes. The Centers for Disease Control and Prevention (CDC) has warned about the dangers of nicotine addiction, particularly among teenagers and young adults.
State finance officials project the tax would bring in $18 million in revenue in its first year, scaling up to around $50 million once fully implemented. However, opponents argue that this could drive even more tobacco products out of the legal market, ultimately benefiting the black market.
"This is a grave mistake for public health if you don't differentially tax," said University of Buffalo professor emeritus Lynn Kozlowski. "You make a mistake by keeping cigarettes much more expensive while taxing nicotine pouches similarly to other tobacco products."
While some states like Illinois and Washington have already started taxing alternative nicotine products, others are taking a more cautious approach. New Mexico lawmakers are considering expanding the state's tobacco tax to other nicotine products in the upcoming legislative session.
For now, leaders in the New York Senate and Assembly have yet to come out with a position on Hochul's tax proposal, which will be debated through a series of hearings until February.
This is the age of paradox. You cut the nose to spite your face 
. I mean, what even is the plan here? You're gonna tax these nicotine pouches, but not cigarettes or cigars? It just doesn't add up 
. And now small business owners like John Rani are having to deal with it too... his bodega is already losing customers because of the price hike 
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. I mean, who wants to pay 75% more for a nicotine pouch when you can get one from some shady dude on the street? It's like trying to put a price tag on freedom or something... freedom to choose how and where we consume our vices 
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anyway, $18m in revenue is a tiny price to pay for the livelihoods of small business owners who are just trying to make ends meet
. I'm all for public health and all, but do we really need to be playin' around with this tax thing? I mean, cigarettes are still out there, right? Why bother with Zyn if we're just gonna make it more expensive? 
. I mean, who doesn't love the idea of taxing something just because it's "nicotine-related" and then watching as black markets and local businesses go up in flames? It's not like those nicotine pouches are gonna disappear or anything... they'll just be sold on the streets, making life more interesting for everyone 
. And what's with the 75% tax rate tho? Are we really that desperate to drive tobacco products into the black market? Like, isn't that basically how we got here in the first place? 
it's like the gov is gonna push them outta business just to save some cash $18 mil might not sound like much but for small biz owners that's like a death sentence 
and what's really annoying is the gov is still profiting off cigarettes while hitting other products with this harsh tax lol good luck with that 
my friend has been using them to quit smoking and now they have to break the bank 
i heard that bodega owners are already reporting a lack of demand for zyn because of the tax 
it's just so frustrating when politics gets in the way of helping ppl 
We all know how addictive nicotine can be, especially for young folks. It's not like taxing these pouches is gonna help people quit smoking or anything... that's a whole different conversation 
John Rani is right, if they tax Zyn everyone will just buy from the black market and local businesses will suffer 
and btw, I don't even smoke or vape but I know that nicotine pouches are bad for you 
this is a total mess 
. We get it, nicotine pouches are not the healthiest option, but taxing them 75% is just gonna push more people to the black market 
! It'll push these products straight into the black market where they can't be regulated