US Pipe Tobacco Companies ?

[NookersTheCat]

I'm paraphrasing the gist of what I remember of the 5 minutes that I watched, but in the USA, if you get whole leaf and are a commercial business, you need a separate room to store it that's bonded to something like $1 million, and you have to meticulously record everything in and out with only licensed people going in and be subject to monthly inspections from the FDA or something.

Great source. And yeah wow, even I didn't know about the bonding requirements... that adds a whole other level of BS. My family's business is commercial/industrial union electrical contracting.. so I'm actually pretty familiar with the qualifications required to secure a surety bond... it's significantly harder than just a loan or regular insurance.

Furthermore, incorporation does not offer you financial liability protection when it comes to bonding. Example, we are an S-corp. So that means if we (our business) went bankrupt, or one of our guys wired a nursing home wrong and burnt it down and killed 15 people, my father (founder and president) is not personally responsible for that mistake... the corp legally protects him from a liability standpoint... but not when it comes to bonding!

When we win the bid for a public project for.. say $150k... the bonding company does not look at our company's financials. The bonding company does not care about our companies financials. They look at my father's, PERSONALLY. He must show them his personal financial statements, his personal credit score, and PERSONALLY sign his name to the bond assuming full PERSONAL financial responsibility for that $150k out of his and my mom's joint checking account.

If the project goes bad, hell, even if the whole business tanks... doesn't matter. Even though our NET30 material suppliers or Bank of America (credit cards, etc.) may be out their money.. the bonding company will PERSONALLY come after him for that $150k and ruin his credit for the rest of his natural life if need be... Required Bonding is an enormous barrier to entry. That's why most construction companies like us can't even bid public projects until you've already been in business at least a decade... and have the personal collateral... there's just way too much at stake.

TLDR: So that means if you need a room bonded to $1M just to work with whole leaf, someone in your company/organization must be able to (forgetting all the rest of the costs of doing business and setting up the company) have >$1 Million in personal assets and good credit and be willing to personally risk forfeiture of those assets (most likely their own home), just to operate that one room. That's gotta be alottttttt of pipe tobacco sales to justify that kinda risk.

 

[dd57chevy]

Well, a lot of people talk and don't know what they're talking about or oversimplify things..

So yeah, the idea that any individual could just start up a business in their basement for getting/importing whole leaf is kind of stupid.

1. I never said it could start in someone's basement . It would take a person or outfit with a lot of money '
There are a lot of slightly eccentric really wealthy pipe smokers .

2. You apparently didn't get Kevin's memo :

" Sarcastic, rhetorical, or disrespectful responses"

 

[sablebrush52]

The most salient comments regarding the difficulties in “replacing” Sutliff as a supplier to retail clients comes from Nooker’s experience.
Still, there are brokers who sold to Sutliff, who was a retail supplier, so maybe, and I stress MAYBE, they could offer a similar service if it made financial sense. There might, and I stress MIGHT, be a way to qualify under the Substantial Equivalency definition. When the Deeming Regs were first published they stated that the regulations applied to finished products, not to components.

 

[NookersTheCat]

The most salient comments regarding the difficulties in “replacing” Sutliff as a supplier to retail clients comes from Nooker’s experience.
Still, there are brokers who sold to Sutliff, who was a retail supplier, so maybe, and I stress MAYBE, they could offer a similar service if it made financial sense. There might, and I stress MIGHT, be a way to qualify under the Substantial Equivalency definition. When the Deeming Regs were first published they stated that the regulations applied to finished products, not to components.

Yeah I swear to God I'm not trying to be a wet blanket or disrespectful to Dave or anyone else... I just have personal experience with how this world was set up BY wet blankets and it tends to make those of us who learn how the game works sound very wet-blankety ourselves when just trying to explain it to others

 

[dd57chevy]

Yeah I swear to God I'm not trying to be a wet blanket or disrespectful to Dave or anyone else... I just have personal experience with how this world was set up BY wet blankets and it tends to make those of us who learn how the game works sound very wet-blankety ourselves when just trying to explain it to others

I understand where you're coming from , and agree . Replacing Sutliff wouldn't be simple or easy . I also admit I don't at all fully grasp the tobacco industry as a whole .

I'm just not convinced this story is over .

 

[Briarcutter]

I can just see the gears turning at SP.

 

[sardonicus87]

1. I never said it could start in someone's basement . It would take a person or outfit with a lot of money '
There are a lot of slightly eccentric really wealthy pipe smokers .

2. You apparently didn't get Kevin's memo :

" Sarcastic, rhetorical, or disrespectful responses"

My post wasn't in any way remotely sarcastic, rhetorical or disrespectful, nor was it necessarily pointed specifically at you personally (I just quoted your post because it was relevant, especially in regard to the last line in particular "*Please don't give me the shallow "Well , why don't you do it ?" All I know about tobacco is how to load a bowl & light it").

It wasn't going against what you said, it was supporting/reiterating what you said.

 

[ThermionicScott]

Great source. And yeah wow, even I didn't know about the bonding requirements... that adds a whole other level of BS. My family's business is commercial/industrial union electrical contracting.. so I'm actually pretty familiar with the qualifications required to secure a surety bond... it's significantly harder than just a loan or regular insurance.

TLDR: So that means if you need a room bonded to $1M just to work with whole leaf, someone in your company/organization must be able to (forgetting all the rest of the costs of doing business and setting up the company) have >$1 Million in personal assets and good credit and be willing to personally risk forfeiture of those assets (most likely their own home), just to operate that one room. That's gotta be alottttttt of pipe tobacco sales to justify that kinda risk.

Barbara Hahn's "Making Tobacco Bright" is a good introduction to the history of the tobacco industry. Onerous regulations go waaayyy back.