Thousands of Liquor and Smoke Shops Approved for Food Stamps, Raising New Fraud Concerns

A new analysis finds over 5,000 alcohol and tobacco retailers authorized for SNAP, prompting scrutiny of oversight and billions in taxpayer exposure.

By yourNEWS Media Newsroom

Thousands of liquor and smoke shops across the United States have been approved to accept food stamps under the federal Supplemental Nutrition Assistance Program (SNAP), according to a report by Just the News. Data reviewed by the Foundation for Government Accountability (FGA) show that more than 5,000 of these retailers were authorized to process Electronic Benefit Transfer (EBT) cards — despite the program’s strict prohibition on alcohol, tobacco, and other non-food items.

The FGA’s analysis found that roughly 4,000 stores with “liquor” in their name and about 1,000 referencing tobacco were listed as approved SNAP retailers. Researchers said the actual number could be higher, given that many stores selling these products do not include those terms in their business names. “These stores become hotbeds of fraud,” FGA Senior Data Analyst Kristi Stahr told Just the News, noting that benefit cards are frequently exchanged for alcohol or cigarettes.

Food stamps, first issued in 1939, were designed to combat hunger during the Great Depression. The modern program, established by the Food Stamp Act of 1964, expressly bars using benefits for alcohol, tobacco, pet food, or cosmetics. But the latest data reveal a growing overlap between SNAP authorization and stores specializing in products outside those limits.

According to FGA Senior Research Fellow Michael Greibrok, “Food stamps are meant to provide supplemental nutrition for vulnerable populations: low-income kids, the elderly, and people with disabilities. Letting smoke shops and liquor stores cash in on the program is not the safety net taxpayers envisioned.”

The report found that more than half of all liquor and smoke shop approvals occurred during the Biden administration, with nearly half located in California. The FGA warned that these stores, which rarely sell staple foods, present high risks for trafficking and misuse. Past prosecutions support that concern: in 2018, a North Carolina grocer was convicted in a $200,000 SNAP fraud scheme; in 2019, a Virginia store owner received 20 years in prison for trafficking $1.5 million in benefits; and in 2020, a California man was fined and sentenced for selling food stamps for cash.

Program costs have also surged. Federal spending on SNAP is projected to exceed $100 billion in 2025, compared to $17.1 billion in 2000, according to FGA’s review of Department of Agriculture data. Agriculture Secretary Brooke Rollins said her department is working on reforms to eliminate waste and tighten eligibility, citing “massive fraud” uncovered in preliminary data.

Rollins has requested that all states share detailed program records with the USDA to identify misuse, but more than 20 states have refused. Several, including California, New York, Michigan, and Illinois, sued the Trump administration to block enforcement of data-sharing requirements, arguing privacy violations. A federal judge in California later issued a temporary restraining order preventing the administration from cutting funding to noncompliant states.

The Agriculture Department has since required that all current SNAP recipients reapply to verify eligibility, though a timeline for implementing the rule has not been finalized. In the meantime, the presence of thousands of liquor and smoke shops on the federal vendor list continues to raise questions about oversight, accountability, and how closely the program’s spending aligns with its original purpose — ensuring nutrition for those most in need.