Thousands of liquor stores and smoke shops are approved retailers under the Supplemental Nutrition Assistance Program (SNAP), raising questions about potential misuse of federal funds.
A recent analysis by the Foundation for Government Accountability (FGA) found more than 5,000 such establishments can accept food stamps, creating opportunities for fraud and diverting assistance from the program’s intended recipients.
The longest government shutdown in U.S. history, lasting 43 days, previously exposed weaknesses in SNAP, leaving millions of recipients without benefits and highlighting gaps in oversight.
Before the shutdown, the Trump administration sought to tighten eligibility standards and ensure assistance was directed toward nutritional foods rather than alcohol, tobacco or other non-food items.
Legislative changes under the One Big Beautiful Bill Act refined eligibility rules and clarified allowable purchases, Just the News reports.
According to FGA, over 4,000 approved stores include “alcohol” in their name, while roughly 1,000 reference tobacco products.
Researchers caution that these numbers may underrepresent the issue, as only retailers explicitly mentioning such products were counted.
Kristi Stahr, senior data analyst at FGA, described these outlets as “hotbeds of fraud,” noting that benefit cards may be exchanged for prohibited items.
Michael Greibrok, senior research fellow at FGA, stressed SNAP’s intended purpose: to supplement nutrition for low-income children, the elderly, and people with disabilities.
He warned that allowing liquor and smoke shops to participate diverts resources from those most in need. FGA notes that most of these retailers were approved in the last five years, with half added under the Biden administration.
Federal law prohibits SNAP funds from being used to purchase alcohol or tobacco.
Historical cases demonstrate that both recipients and store owners have participated in fraud schemes, exchanging benefits for cash or ineligible items.
In 2018, a North Carolina grocery store was implicated in a $200,000 fraud case, and in 2019, a Virginia store owner was sentenced to 20 years for trafficking over $1.5 million in SNAP benefits.
SNAP traces its origins to 1939, when the program was first created during the Great Depression to prevent starvation.
The modern program, established under the Food Stamp Act of 1964, limits funds strictly to food for human consumption, excluding alcohol, tobacco, pet supplies and cosmetics.
Over the decades, the program has expanded to serve millions of low-income Americans nationwide.
Beyond fraud concerns, the nutritional value of items sold at liquor and smoke shops is minimal.
Greibrok observed that stores focused on alcohol and vaping products provide little meaningful nutrition and may be particularly vulnerable to fraudulent activity.
SNAP expenditures have surged, reaching over $100 billion in 2025 from $17.1 billion in 2000, according to USDA data analyzed by FGA.
USDA Secretary Brooke Rollins has proposed reforms to enhance access to staple foods, tighten retailer oversight and request detailed state-level SNAP data to detect fraud.
Some states, including California, have resisted, citing privacy concerns and filed lawsuits to block program cuts tied to noncompliance.
Nearly half of liquor and smoke shop retailers approved for SNAP are located in California.
The Trump administration recently required all recipients to reapply for benefits to ensure eligibility, though timelines for implementation remain unclear.
Lawmakers and USDA officials are exploring additional measures, including stricter vetting of high-risk retailers, increased audits, expanded penalties for fraud and incentives for grocery stores selling fresh produce to participate in SNAP.
These reforms aim to protect federal funds and ensure benefits reach low-income families for their intended purpose.
