With the holidays fast approaching, Capitol Hill smoke shops are getting ready for the annual winter slowdown, culminating in the New Year’s resolution drop in sales. But after 17 years in the business Choice Tobacco shop owner Aswad Janoo knows his customers well. “It only lasts about a month,” he said.
Weathering the annual ebbs and flows of tobacco users is easy, but the independent smoke shop owners on Capitol Hill tell CHS that staying afloat amid changing habits and rising taxes has made the business tougher than ever. And while most of the shop owners say their businesses have become increasingly less profitable in recent years, there seem to be more shops than ever.
Tobacco Leaf, which is currently under construction at the former Massai African imports shop, will be the sixth smoke shop to enter the mix on the Hill. Just two store fronts away, inside the Broadway Alley building, is one of the longest standing smoke shops in the neighborhood. Mustafa Choudhari, known to most as Harry, has run the Broadway Smoke Shop from his off-street location since 1997.
“It was a very happening place then, it was bustling,” he said. “All the small neighborhood shops were still around.”
Back in 1997, when cigarettes were $2 a pack, Choudhari said about 75% of his sales were in cigarettes. Today, cigarettes only account for about 40% of sales at the shop. Many shop owners reported similar numbers. In addition to the rise of e-cigarettes, they say tobacco taxes have squeezed the profit margin out of paper cigarettes and have forced customers to seek out other products.
A few blocks north on Broadway, Janoo is helping a customer decide between two types of vaporizer pens. Janoo bought Choice Tobacco in 2001, although he’s worked at the shop since 1996. Three years ago vaporizers and e-cigarettes were barely on the market — now they account for about 30% of sales at Choice
Janoo said the taxes work much more in favor of electronic devices, and he’s able to sell the new products with a bigger mark-up. He used to take a 20% profit on cigarettes 10 years ago — today it’s down to 8%. “E -cigarettes are definitely taking the place,” he said.
Glass pipe sales have also slowed down due to vaporizers. Janoo said many of those partial to paper cigarettes have moved over to roll-your-own tobacco. More than half of the Choice walk-in humidor is now stocked with rolling tobacco.
Price increases on cigarettes are essentially out of the hands of the smaller shop owners. Many of the small smoke shops have a license to purchase their cigarette stock through bulk retailers like Costco or Sam’s Club. The rest of the inventory is usually purchased through head shop catalogs, like Price Kutter for tobacco products and BUDK for knives and novelty items.
Stiffer regulations on the tobacco industry have also had a ripple effect in retail. Choice Tobacco used to stock a wide variety of imported cigarettes. But once fire safe cigarette regulations took hold around 2010, that wiped out much of the luxury import market.
Janoo said cigarette companies used to pay shops to put out their displays, revenue that has now gone by the wayside. Not too many years ago, cigarette companies also used to give smoke shops bags full of free matches. That stopped following stricter regulations against cigarette advertising. Since smokers began to expect free packs of matches, Janoo said he has to purchase them himself. “It’s cheap, but everything adds up,” he said.
If you’re in the market for cigars, Seattle Cigar & Tobacco at Broadway and Republican has by far the best selection in Capitol Hill. The long glass case humidors in the back of the shop store hundreds of cigars, including a few $30 and over imports dating back to the 1920s.
Holy Smoke on E Olive Way stands out among the Hill’s other smoke shops for having the most unique and widest selection of hand blown glass. The 10-year-old shop also offers the standard selection of cigarettes and smoking accessories, as well as some gift items, like t-shirts. The clerks at Holy Smoke declined to speak with CHS for this story.
For six years Capitol Hill Tobacco was E Olive Way’s other staple smoke shop. Earlier this year the shop moved to Broadway-ish, in the parking lot behind Moti Mahal just north of Pike. The shop stocks the standard selection of cigarette, hookah, and machine rolled cigars. The humidor doesn’t quite reach the level of Seattle Cigar and Tobacco, but it’s fairly extensive with dozens of hand-rolled cigar options. The shop also stocks a large selection of glassware and hookahs.
Janoo and Harry, the Capitol Hill smoke shop veterans, both admitted the selection at most shops was about the same. What makes one stand out over others, they said, is a core of loyal customers.