Bleecker Street Grocery is a classic New York City bodega: Clerk John Rani sells candy, beer and lottery tickets while a white cat named Debbie patrols the aisles.
But if you stopped in for a pack of Newports, you’d be out of luck.
“ I don't sell cigarettes. No vape. It's not worth it,” Rani said on a recent afternoon. “Only Zyn.”
The hockey puck-sized cans of nicotine pouches line the shop’s front counter and fill a converted cigar case. At $10.99 each, they’re about half the price of a typical pack of cigarettes sold there.
But New York Gov. Kathy Hochul is looking to change that. Her recent annual budget proposal would extend the state’s 75% tax on cigarettes to alternative nicotine products like Zyn — angering small business owners and Zyn’s fervent and growing fanbase. Such a tax would nearly double Bleecker Street Grocery’s price tag for Zyn up to more than $19.
“Everything, when you put a tax on it, goes to the black market, and the local business will lose its customer,” Rani said. “ That's the problem with the government.”
Zyn first came to the United States about 10 years ago after taking off in Sweden. The small white packets are full of nicotine salts that dissolve in the mouth and give the user a buzz like a cigarette.
They’ve since exploded in popularity. Tobacco giant Philip Morris International acquired Zyn's parent company for $16 billion in 2022 as part of its strategy to reposition itself as a “smoke-free” company. For the three months that ended Sept. 30, Philip Morris said it sold 204.9 million cans of Zyn, up nearly 40% from the same period last year.
Use of nicotine pouches is especially high — and rising — among men between the ages of 25 and 45.
Gothamist observed numerous young and middle-aged men buying cans of Zyn at eight bodegas across the city. But in a sign of how much social norms on tobacco use have changed, no one agreed to give their name for an interview.
The Hochul administration argues these nicotine products are harmful and addictive, and should be taxed like other tobacco products, like cigarettes, cigars and chewing tobacco.
“We see it as a distinction without a difference,” Budget Director Blake Washington told reporters following the budget announcement earlier this month. “I would say there’s an addictive property to both and that’s really the thrust behind it.”
State finance officials project the tax would bring in $18 million in revenue in its first year, scaling up to about $50 million once it's fully implemented.
Other states including Illinois and Washington have already started taxing alternative nicotine products similarly to tobacco. New Mexico lawmakers are considering expanding the state’s tobacco tax to other nicotine products in the upcoming legislative session.
Leaders in the New York Senate and Assembly have not yet come out with a position on Hochul’s tax proposal. State lawmakers will hold hearings on the governor’s budget plan through the end of February.
Hochul’s announcement, first laid out as part of her fiscal year 2027 budget, drew immediate opposition from business groups.
Philip Morris International criticized the move while saying the company appreciated Hochul’s commitment to “public health.”
“We share those goals and look forward to working with her administration and the Legislature on solutions that ensure adults looking to transition away from smoking are not discouraged from using better alternatives," a spokesperson said in a statement.
New York Association of Convenience Stores President Alison Ritchie said that “imposing a new tax on nicotine pouches will only expand criminal activity, drive street-level sales and make it harder for smokers to quit.”
The black market for cigarettes remains a persistent problem in the city. A report by the Tax Foundation, a pro-business think tank, found more than half of cigarettes consumed in New York in 2023 were brought in and sold illegally, resulting in over $812 million in lost revenue.
Some fear that taxing nicotine pouches will drive even more tobacco products out of the legal market.
“The only winners on this are the bad guys because they will in fact find ways to get the product to those people, and the city and the state will lose tax revenue,” former New York City Sheriff Edgar Domenech said in an interview.
Public health experts have argued that states should tax nicotine products in relation to how dangerous they are.
“ You make a grave mistake for public health if you don't differentially tax, if you don't keep cigarettes as much, much more expensive,” said University at Buffalo professor emeritus Lynn Kozlowski.
Early studies show nicotine pouches may increase the risk of cardiovascular disease. Experts also warn about the effects of nicotine addiction in teenagers and young adults.
But Kozlowski argues states should be doing everything they can to get people to stop smoking cigarettes — which remain the leading cause of preventable death in the United States.
“ It would be a major mistake if a product like Zyn got taxed to the same degree as cigarettes,” he said.
