A collection of identical silver metal gun parts sit on shelves — Gun parts at a Dark Storm manufacturing facility in Florida, on Aug. 9, 2022. *Photographer: Thomas Simonetti/Bloomberg*

Small Gunmakers Find State Weapons Bans Offer a Lucrative Niche

There are more gun manufacturers than ever. Some stand out by making AR-15-style rifles that outmaneuver regulators.

By Jason Grotto and Michael Smith
Graphics by Kyle Kim, Raeedah Wahid and Paul Murray

October 20, 2022, 12:01 AM EDT

Two friends from high school had just gone into business selling guns in New York when the Sandy Hook Elementary School massacre prompted state lawmakers there and elsewhere to try to ban so-called assault rifles.

For Edward Newman and Peter Morrisey and their company, Dark Storm Industries, the crackdown brought new opportunities.

Neither man had experience in the firearms business. They’d worked for years at a security company on Long Island. After developing the entrepreneurial itch, they explored going into organic cosmetics before settling on firearms. Soon, they learned the real money was in manufacturing, Newman recalls.

Now, after securing a nationwide distribution deal, Dark Storm plans to build a 26,000-square-foot factory in Florida and produce 25,000 firearms annually, up from 378 in 2014.

The company’s success helps show why US policymakers have been unable to stem a flood of semiautomatic weapons that the gun industry calls “modern sporting rifles.” Almost 2.8 million of them hit the American market in 2020, according to an estimate by the National Shooting Sports Foundation, an industry trade group. After mass shootings involving assault rifles this year in Buffalo, New York; Uvalde, Texas; and Highland Park, Illinois, Congress approved the first major US gun legislation in decades. The law devoted new funding to school safety and state-level programs aimed at keeping guns away from people who pose threats to themselves or others. But it did nothing to limit the kinds of weapons available to buyers.

Instead, state lawmakers have pursued assault-weapons bans in a piecemeal manner — 11 states moved to adopt or strengthen restrictions this year, with varying degrees of success. The result is a set of fragmented policies that advocates for tighter gun laws say are just too easy to get around.

“Gun manufacturers are very determined to flout the spirit of these laws, and they can do that because the laws are too technologically specific,” said Lindsay Nichols, federal policy director for the Giffords Law Center to Prevent Gun Violence. “We need legislation that is broadly written so that it’s harder to circumvent. State legislators are scared to death to pass that type of bill, which is why we need Congress to pursue restrictions that can stick.” The Democrat-controlled House passed broad legislation to ban assault weapons in July, but it hasn’t advanced in the Senate, where Republicans have enough votes to block it.

Photo of Dark Storm co-owner Edward Newman in Merritt Island, Florida. — Dark Storm co-owner Edward Newman in Merritt Island, Florida. *Photographer: Thomas Simonetti/Bloomberg*

A camouflage vest packed with rifle magazines hangs on the wall of Edward Newman’s office, just off Dark Storm’s factory floor. In a series of interviews, he was transparent about the firm’s origins.

“We found ways to provide a product that the consumers wanted and complied with state law,” he said. Newman credits booming demand for the AR-15 style rifle and what he calls an untapped market for firearms that comply with tougher state laws for making his company one of America’s fastest growing gunmakers.

Note: The definition of so-called assault weapons varies by state but generally covers certain types of semiautomatic handguns and rifles. High-capacity magazines are considered magazines that hold more than 10 or 15 rounds, depending on the state. Hawaii’s restrictions on assault weapons and high-capacity magazines cover handguns only.

Sources: Everytown for Gun Safety and Giffords Law Center to Prevent Gun Violence

Dark Storm is part of a wave of smaller manufacturers that are quicker and nimbler than large competitors when it comes to retooling operations and changing their firearms’ components. Between 2014 and 2020, the number of smaller makers — those producing fewer than 50,000 weapons a year — surged 70% to more than 4,700, according to a Bloomberg analysis of the most recent federal data. Even as larger companies make record numbers of guns, their smaller rivals have increased their market share, from 10% in 2014 to almost 14% in 2020, when they produced 1.5 million firearms.

Thousands more lone gunsmiths and small shops have also secured manufacturing licenses from the Bureau of Alcohol, Tobacco, Firearms and Explosives, or ATF, even though they don’t manufacture weapons from scratch. Instead, their licenses allow them to assemble guns from parts and resell them, another way to beat state restrictions.

Some 18,000 licensed gunmakers now operate nationwide, a number that’s almost doubled since 2014. The smaller ones work out of industrial buildings, strip-mall storefronts, warehouses, even the garages of single-family homes.

A photo showing a view of the exterior door to Dark Storm’s manufacturing facility. — Dark Storm plans to build a 26,000-square-foot factory in Florida. For now, it’s conducting some operations from a temporary space there. *Photographer: Thomas Simonetti/Bloomberg*

In Littleton, Massachusetts, a state with some of America’s toughest gun restrictions, 75 gunmakers operate from a warren of shared spaces inside a century-old mill building that once produced apple vinegar. Outside, signs advertise a children’s music school and a photography studio that specializes in portraits of families and pets. Inside is the nation’s largest concentration of licensed firearms manufacturers at a single address, including businesses named MAGA Arms and Forgotten Bastards. Some workers sit at cluttered workbenches, selling AR-15 components that buyers can easily assemble into functioning rifles, despite a Massachusetts ban on selling them whole that dates to 1998.

It’s hard to know how often small makers’ guns turn up at crime scenes; a 2003 federal law prevents public disclosure of such information. Yet officials in one state, Pennsylvania, defied the federal prohibition in 2019, releasing data that suggests criminals use small manufacturers’ products disproportionately: Between 2014 and 2019, small makers accounted for less than 13% of US firearms production, but they made about 30% of the US guns recovered at Pennsylvania crime scenes — some 12,400 weapons in all, a Bloomberg analysis found.

Thomas Abinanti
Photographer: Hans Pennink/AP Photo

In New York, Thomas Abinanti, an assemblyman who co-sponsored the state’s 2013 assault weapons ban, was shocked to learn how easily gun makers responded to it.

Abinanti and his colleagues envisioned saving lives by limiting the number of rounds a shooter could fire before having to pause and reload. That’s why they focused on banning removable magazines that could be preloaded and replaced quickly. But Dark Storm sells a $34.95 “re-loader” that’s made by another company; it can refill a fixed magazine in seconds.

The lawmaker said he plans to ask New York Attorney General Letitia James to investigate weapons designed around the state’s law and find ways to close any loopholes. He also might propose banning reloaders in New York state.

“This is a clear attempt to evade the intent of the legislation,” Abinanti, a Democrat from Mount Pleasant, said, referring to Dark Storm’s rifles. Newman says the firearms comply with the state’s restrictions. And banning reloaders wouldn’t stop mass shootings, he says. “It just becomes a slippery slope where they would desire to just ban everything.”

The NSSF, the largest US gun industry lobbying group, says Dark Storm and others are hardly skirting the law. “These are companies that are helping their customers to comply with the law,” said Mark Oliva, the group’s spokesman. “It appears to me the lawmakers that are displeased are expressing sentiment over poorly-drafted legislation or frustration that they cannot infringe on Constitutionally-protected rights.”

At the federal level, there are comparatively few restrictions on licensed manufacturers, and “the vast majority” comply with them, said John E. Ham, an ATF spokesman. Still, Ham said in an email, “a very small percentage of those in the firearms industry may attempt to work around federal regulations.”

Indeed, even if state or federal lawmakers pursue new limits, it’s hard to stop a large and growing group of entrepreneurial gunmakers from trying to innovate their way around them. And in America, starting a gun factory is easier than one might think.

Thousands More Manufacturers

Dark Storm started after Hurricane Sandy ravaged New York in October 2012. Reports of post-evacuation looting and break-ins led friends to tap Newman and Morrisey’s experience in security and ask them how to get guns for protection. (Morrisey declined to comment for this story.)

That sparked a business idea. Within months, the men founded their company in East Islip, a seaside hamlet on Long Island. They planned only to sell guns, not to make them, but a friend with a gun shop in Las Vegas encouraged them to get a manufacturing license, Newman recalls. There was no reason not to.

“ We’ve just got to a point where the average Joe, like building Legos or a kit, can build their own guns.

— Former ATF agent David Chipman

First, at $150, the initial manufacturer’s license fee is $50 cheaper than a dealer’s license. It would still allow Dark Storm to sell guns to retail customers — in addition to making firearms and assembling gun parts for resale. That flexibility, along with the smaller fee, helps explain why the US has 4,000 fewer licensed dealers today than it had five years ago but 6,000 more licensed manufacturers.

Source: US Bureau of Alcohol, Tobacco, Firearms and Explosives

Advances in computerized machining technology mean that just about anyone with a workable design can make gun parts from a block of aluminum — it’s no longer the work of skilled gunsmiths, says David Chipman, a former ATF agent who was nominated last year by President Joe Biden to become the agency’s director. His nomination was ultimately withdrawn for lack of Republican support, due to his involvement with groups that favor more gun restrictions.

David Chipman
Photographer: Andrew Harnik/AP Photo

“We’ve just got to a point where the average Joe, like building Legos or a kit, can build their own guns, and people are there helping them do it,” Chipman says. “And it’s all lawful.”

There are few legal or regulatory barriers to entry in the gun-making business. Licensees don’t have to have any experience at it, and most states cede licensing to the federal government.

The ATF has drawn criticism for inspecting relatively few gun dealers each year, and now, after a spike in the number of licensed manufacturers, it’s failing to meet its own internal goal of visiting each maker once every three years. Fixing the problem isn’t easy: The agency said in May that it would need to more than double its inspector ranks, from about 650 to 1,509, to meet its goals.

“ATF continues to use all of the tools at our disposal to focus our inspections on those most at risk of adversely impacting public safety,” said Ham, the agency spokesman.

In May, in its first comprehensive examination of the firearms market in more than 20 years, ATF included one statistic that suggests the danger that infrequent inspections can present: More than 84,000 firearms went missing or were lost by dealers and manufacturers between 2016 and 2020 — and those are only the missing guns flagged during ATF inspections. Consistent inspections would find far more missing weapons, Chipman says.

Dark Storm’s Newman says his company complies with all federal and state rules: No one can buy one of his guns without passing the required FBI background check. The company keeps track of every rifle it makes and sells, stamping each with a traceable serial number. Newman says he has the paperwork to prove this if any ATF agent decides to audit his books.

Yet he says no ATF inspector has ever visited Dark Storm’s New York factory, located at the back of what used to be a sign and awning shop in an old strip mall.

When the fledgling company opened, Newman recalls, it focused first on offering individual components of firearms. Then the Sandy Hook school shooting “put the entire industry into chaos,” he says. Newman said the shooting was horrific, but he’s convinced that banning firearms wouldn’t prevent similar atrocities and would violate the constitutional right to bear arms. “I hate to sound like so many other people, but you know, there is evil in this world, and no matter what we do, there will be.”

After Sandy Hook, the threat of potential bans on AR-15s “resulted in panic buying in an industry that was already struggling to keep up with demand,” he says. “The thought process was, ‘Let’s see if we can get the parts to help you build one.’”

They were tapping into a do-it-yourself market that’s been growing for years.

Note: Number of firearm background checks are a proxy for, but do not represent, the number of firearms sold. According to Everytown, there have been 281 mass shootings since 2009. Only a select few are depicted above.

Sources: FBI’s National Instant Criminal Background Check System, Everytown Research & Policy

The AR-15 rifle was developed more than six decades ago by a company called Armalite, which sold the patent to Colt’s Manufacturing Co. in 1959. After the patent expired in 1977, rifles of similar design became the widely available commodities they are today.

Gun buyers prize them for their ability to fire multiple rounds quickly and for their accuracy — the product of such features as muzzle compensators and buffer weights, which lessen recoil and “muzzle rise.” Those elements also contribute to the guns’ lethality. Assault rifles or high-capacity magazines were used in 18% of mass shootings since 2009, but they accounted for more than 30% of people killed and 79% of those wounded, according to data compiled by the group Everytown for Gun Safety. (Michael Bloomberg, the majority owner of Bloomberg LP, the parent company of Bloomberg News, founded and helps fund the group, a nonprofit that advocates for universal background checks and other gun violence prevention measures.)

Another part of the AR-15’s appeal isn’t as well publicized — except among devotees: It can be easily assembled, modified, or upgraded with components, allowing owners to differentiate their weapon from others, like car enthusiasts who customize their rides.

This hobbyist fascination feeds a rapidly growing market for an assault rifle’s basic frame, called the lower receiver. Located above the pistol grip, the lower receiver houses the key components of a gun, including the trigger and firing pin, and the slot for the magazine. It also has openings that allow it to “receive” other components, such as the barrel and stock.

Between 2016 and 2020, federal data show, US production of rifles fell 35%, as lower receivers increased 60%. Some 700 factories reported making 1.3 million lower receivers in 2020; all but 12 were small manufacturers, according to a Bloomberg analysis of federal data. Their products serve as building blocks for assault rifles, making them attractive to hobbyists but also creating a way to circumvent state restrictions. Since 2010, sales increases for lower receivers — as reflected in rising numbers of FBI background checks on their buyers — have been particularly steep in states with tough gun laws. Connecticut has seen a 10-fold increase; New York and New Jersey had increases of 400%.

America’s largest maker of lower receivers, Hebron, Kentucky-based Anderson Manufacturing, shows how the industry has changed. In 2016, the company produced 453,763 finished rifles and no lower receivers. By 2020, it made 440,000 lower receivers and only 22,500 rifles, federal data show. The company didn’t respond to repeated requests for comment.

Fresh Challenges

When Dark Storm began making firearms in 2014, it teamed up with six other gunmakers to buy a used CNC machine — technology that has made it vastly easier to become a gunmaker. The name stands for computer numerical control; the device uses a microcomputer to control a machine tool that cuts metal into parts. Each partner kicked in $7,000 for it, Newman said.

The CNC machine produced batches of custom-made lower receivers, emblazoned with each partner’s logo and a serial number. That first year, Dark Storm made 197 rifles and 180 lower receivers.

Clockwise from top: A Dark Storm worker finishes a part by hand; one of the company’s CNC machines tools a hand guard; finished parts await further action; metal shavings collect from components being tooled. *Photographer Thomas Simonetti/Bloomberg*

Soon, the company moved into a strip mall in Oakdale, NY, where it built out a retail store and shooting range, with its own CNC machine in the back. As business boomed, the company expanded its manufacturing operation into a vacant shop a few doors down and eventually had six CNC machines, each the size of a small SUV. By 2019, Dark Storm was making nearly 10,000 firearms a year, and Newman was searching for ways to boost production further.

Over the years, he’d gotten involved in the NSSF’s advocacy on federal gun policy, fighting certain gun restrictions while supporting improved background checks, among other issues. In 2020, during a meeting in Representative Matt Gaetz’s office, the Florida Republican urged Newman to relocate. “He said, ‘What are you doing in New York? You should come to Florida,’” Newman recalled.

After considering an array of local tax breaks from around the country, Dark Storm settled on Titusville, on part of Florida’s Space Coast that’s home to multiple gun makers. There, plans call for building a $5 million factory — roughly five times bigger than the New York plant. The company has said it will employ 50 workers over two shifts.

Photo of Cody Wilson in a workshop holding a white plastic-looking 3D printed gun — Cody Wilson holds a 3D-printed gun called the Liberator at his shop in Austin, on Aug. 1, 2018. *Photographer: Eric Gay/AP Photo*

But even as Dark Storm reaches new heights, others are pursuing edgier innovations that promise fresh challenges for policymakers and additional disruption for the industry.

With an eye toward foiling regulators, some manufacturers began making unfinished lower receivers — often called “80% receivers” — which meant they didn’t have to have serial numbers, as finished versions must. In August, the ATF responded with new rules aimed at this potential explosion of “ghost guns”: Going forward, 80% receivers would have to have serial numbers, and buyers would have to go through background checks.

But the controversial gun-rights activist Cody Wilson was already years ahead of regulators. Wilson first gained notoriety after publishing plans for a 3D-printed gun in 2013. A year later, he started ghostgunner.net, which takes the do-it-yourself approach to the limit. It sells a mini-CNC machine called the Ghost Gunner 3 and software that’s suitable for home use. The device can convert a block of aluminum into a lower receiver in about four hours — a process that Wilson says isn’t covered by the ATF’s new rules. Gun-control advocates argue that such products, known as 0% receivers, are indeed covered. The question, like the rest of ATF’s new ghost gun rules, may wind up in litigation.

For now, Wilson says the ATF’s new regulations helped his business, with almost 600 back orders waiting to be filled, at $2,500 apiece.

“This product was engineered to fall outside the regulations, and the ATF generously used language that says blocks of metal can never be regulated,” he said in an interview. “So, they actually created a foothold in the market for our company.”

Small Gunmakers Find State Weapons Bans Offer a Lucrative Niche

There are more gun manufacturers than ever. Some stand out by making AR-15-style rifles that outmaneuver regulators.

Where Guns Are Restricted

Thousands More Manufacturers

Where Gun Manufacturers Are Licensed

Demand for Guns Grows

Shifting Trends in Gun Manufacturing

Fresh Challenges