Tobacco Retail Licensing Fact Sheet
Why California Needs Tobacco Licensing

It has been well established in numerous studies since the 1980’s that active enforcement of state and
local tobacco sales to minors laws reduces the percentage of retailers who illegally sell tobacco to
minors.1,2,3,4,5,6,7 While education has been shown to be useful in decreasing the percentage of retailers
who sell tobacco to minors, education without active enforcement loses its effectiveness over time.1,4

Illegal sales of tobacco to teens has risen over the past two years from 12.8% in 2000 to 17.1% in
2001 and 19.3% in 2002. Non-traditional tobacco retailers such as donut shops, gift stores and
“dollar” stores account for the highest rates of illegal tobacco sales with rates of 30% or more. 8

As a result of Public Health Service Act Public Health Service Act 398 (42 U.S.C. 300x-26) enacted
in 1992 by the federal government and the subsequent Tobacco Regulation for the Substance Abuse
Prevention and Treatment Block Grant (45 CFR Part 96) enacted in 1996, block grants to states from
the Substance Abuse and Mental Health Services Administration (SAMSHA) are contingent on states
enforcing laws prohibiting the sale or distribution of tobacco products to persons under 18 years of
age in a manner sufficient to ensure that the rate of illegal tobacco sales does not exceed 20%. A
penalty of up to 40% of the SAMSHA block grant may be withheld from states for failing to meet
this minimum standard.9,10,11 In California, such a penalty would result in the loss of more than $100
million to the Department of Alcohol and Drug Programs for alcohol and substance abuse prevention
and treatment activities.
Consumer/Public Support for Tobacco Licensing

80% of California adults think a license should be required to sell tobacco. 12

96% of California adults agree that communities should enforce laws to prevent selling cigarettes to
minors.12
Key Opinion Leader Support for Tobacco Licensing and their Partners

69% of California key opinion leaders believe that businesses should be licensed to sell tobacco.13

93% of California key opinion leaders believe that community leaders should take a public stand
against businesses that consistently violate laws that prohibit selling tobacco to minors. 13

98% of California key opinion leaders believe that businesses that illegally sell tobacco to minors
should be fined. 13

Over 90% of enforcement agencies rate suspension or revocation as an effective strategy to reduce
youth access to tobacco after repeated violations.14
Tobacco Licensing Legislation Enacted by Other Governments

32 communities in California require retailers to obtain a license or permit to sell tobacco.

34 states, which represents 84% of the U.S. population excluding California, have statutes requiring
retailers to obtain a license before selling tobacco products some of which include provisions for
license suspension or revocation. Florida ($50), New York ($100), Washington ($93), and Texas
($180) are among the states with such a requirement for an annual license fee. States not having
licensing include Virginia, North Carolina, South Carolina, Tennessee, Kentucky and California.
Tobacco Education Research Oversight Committee Master Plan – Toward a
Tobacco Free California 2003-2005 – the Myth of Victory

Objective 6: Promote legislation to license retailers of tobacco products, and enforce the
consequences of violations. Licensing legislation should adhere to the following standards:
o
Local control is not preempted, and licensing provisions do not limit or render inapplicable
any other current tobacco control regulations or prohibitions;
o
A fee is charged to cover program administration and enforcement and is annually renewed;
o
Effective enforcement is built in;
o
Penalties for violation are meaningful, graduated, and result in suspension and revocation of
license;
o
Violations of any tobacco control laws, not only Penal Code 308, are included in
enforcement; and
o The licensing process is administered by the California Department of Health Services.15
Institute of Medicine, Growing Up Tobacco Free Recommendations

States should establish a licensing system requiring merchants to obtain a license to sell tobacco
products, which may be suspended or revoked if the merchant sells tobacco to minors or violates
other state and local laws designed to reduce youth access.16

Licensing fees should be earmarked for the enforcement of youth access legislation and should be set
high enough to cover those costs. If possible, responsibility for operating the licensing system should
be assigned to a public health agency. However, each state should assess existing regulatory
structures to determine which agency is best able to effectively administer the licensing program.
The agency selected should retain the authority both to administer the licensing program and to
receive the licensing fee.16
Working Group of State Attorneys General

State laws should create or require a licensing system for tobacco sales. To be effective and
meaningful, laws must hold the store accountable for these sales, just as stores are held accountable
for illegal sales of alcohol, or for failure to comply with labor laws, environmental laws, zoning laws,
health and safety codes, and other laws. In fact, laws that leave stores free of consequences for their
illegal tobacco sales are an anomaly. In virtually every other area, society holds businesses
accountable for their employees’ compliance with law.17
Healthy People 2010 Objectives
National health objectives set forth in Healthy People 2010 specifically focus on reducing illegal tobacco
sales to minors and preemption.18

27-14. Reduce the illegal sales rate to minors through enforcement of laws prohibiting the sale of
tobacco products to minors.

27-15 Increase the number of States and the District of Columbia that suspend or revoke State retail
licenses for violations of laws prohibiting the sale of tobacco to minors.

27-19. Eliminate laws that preempt stronger tobacco control laws.
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In Their Own Words: Quotes from the Tobacco Industry and Their Partners

“We may try to use ‘It’s the Law’ spokespeople in Alabama to combat proposed retail fees which will
be used to hire more enforcement personnel for a crackdown on sales to minors.”
Jim Overstreet, Cohn & Wolfe Public Relations in memo sent to David Laufer, Philip
Morris Regional Director 19

“The important point, we believe, is to avoid placing licensing authority in any state agency with an
antismoking agenda.”
Covington & Burling, January 9, 1990 20

Tobacco industry strategy to address a comprehensive legislative proposal that includes tobacco retail
licensing:
“At its May 9, 1992 meeting, the Scope & Agenda subcommittee will discuss a measure
submitted by the Coalition on Smoking OR Health: “Youth Access to Tobacco Products Control
Act.” Our job is to knock this measure off the agenda.”
Walter N. Woodson, Tobacco Institute, April 14, 1992 21

Retailers have detailed information on tobacco consumers, but public health and enforcement
agencies don’t have information on who sells tobacco in California.
“Not only are the retailers complying with the law by carding, but at the same time they have
compliance, they’re also building a database of information. That way, say in the future there’s a
Marlboro buydown or a Winston buydown, they know who all their customers are that are buying
those products and they can send them a postcard saying, ‘Hey we’ve got a buydown for this
particular product. ‘So not only can the retailer get information regarding the type of products
each individual customer buys, but they can get some age-related demographics which might say,
‘Between these ages, here’s the products the customers are buying.’”
David Thomas, Intellink Services, Inc. President, June 2002 22
References
1. US Department of Health and Human Services. Preventing tobacco use among young people. A
Report of the Surgeon General, 1994. Atlanta, Georgia: Public Health Service, Centers for Disease
Control and Prevention, Office on Smoking and Health, 1994. (US Government Printing Office
Publication No S/N 017-001-00491-0).
2. Altman DG, Whellis AY, McFarlane M, et al. The relationship between tobacco access and use
among adolescents: a four-community study. Social Science Medicine 1999; 48:759-775.
3. Rigotti NA, DiFranza JR, Chang Y, et al. The effect of enforcing tobacco-sales laws on adolescents’
access to tobacco and smoking behavior. New England Journal of Medicine 1997; 337:1044-1051.
4. US Department of Health and Human Services. Reducing tobacco use: a report of the Surgeon
General. Atlanta, Georgia: Centers for Disease Control and Prevention; 2000.
5. Institute of Medicine. Growing up tobacco free: preventing nicotine addiction in children and youths.
Washington DC: National Academy Press; 1994.
6. Cummings KM, Hyland A, Saunders-Martin T, et al. Evaluation of an enforcement program to reduce
tobacco sales to minors. American Journal of Public Health 1998; 88:932-936.
7. Gemson DH, Moats HL, Watkins BX, et al. Laying down the law: reducing illegal tobacco sales to
minors in central Harlem. American Journal of Public Health 1998; 88:936-939.
8. California Department of Health Services, Tobacco Control Section. California Youth Purchase
Survey, 1994-2002. September 2002.
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9. Federal Law Regarding Sale of Tobacco Products to Individuals Under Age of 18, 42 U.S.C. 300X26 (1992).
10. Tobacco Regulation for the Substance Abuse Prevention and Treatment Block Grant (45 CFR Part
96).
11. http://prevention.samhsa.gov/tobacco/fctsheet.asp
12. California Department of Health Services, Tobacco Control Section. California Adult Tobacco
Survey, 2001.
13. Harder + Company Community Research. American Lung Association of California Key Opinion
Leader Survey Year One Report. June 2000.
14. Independent Evaluation Consortium. Final Report. Independent Evaluation of the California Tobacco
Control Prevention and Education Program: Waves 1, 2 and 3 (1999-2000). Rockville: Maryland: The
Gallup Organization, 2002.
15. Tobacco Education Research Oversight Committee. Toward a Tobacco-Free California 2003-2005:
The Myth of Victory. California, 2003.
16. Lynch BS and Bonnie RJ (eds.) Growing Up Tobacco Free: Preventing Nicotine Addiction in
Children and Youths. Institute of Medicine; National Academy Press: Washington, D.C., 1994.
17. Working Group of State Attorneys General. No Sale: Youth, Tobacco and Responsible Retailing.
1994.
18. http://www.healthypeople.gov
19. Jim Overstreet, Cohn & Wolfe Public Relations. Memorandum sent to David Laufer, Philip Morris
Regional Director. April 27, 1995. http://tobaccodocuments.org/landman/2044270319-0320.html.
20. Remes DH, Covington & Burling. Memorandum regarding model youth access legislation drafted by
a tobacco industry law firm. January 9, 1990.
21. Woodson WN. Tobacco Institute Memorandum to Regional Vice Presidents. April 14, 1992.
22. Wiederer D. Answering age-old questions: age-verification systems help retailers stay on the right
side of the law. Tobacco Retailer. 2002 Adams Business Media, Inc.
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