Enhancing Tobacco Control through Retailer Licensing Policies

July 19, 2024 | Ann Abraham

States and municipalities are adopting tobacco retailer licensing (TRL) laws, an evidence-based policy that requires stores to obtain a government-issued license to sell tobacco products. Such measures allow the state or municipality to regulate selling and distributing tobacco products by enforcing restrictions on density, type, and location of tobacco retail outlets. These policies can also enforce age restrictions that prevent those below the legal age from purchasing tobacco and prevent tobacco retailers from clustering near schools or youth-populated areas.

Marginalized communities and those of color are often heavily targeted by tobacco industry marketing and consequently face greater exposure to tobacco products. Implementing stronger licensing requirements, such as those limiting the number and location of tobacco retailers, can reduce the exposure to tobacco marketing.

Current State and Island TRL Programs

As of June 2024, 40 states, Washington, D.C, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands (CNMI), Puerto Rico, U.S. Virgin Islands (USVI), and Palau require tobacco retailers to have a state license. Currently, 34 states, USVI, CNMI, and Washington, D.C. require retailers to have a license to sell e-cigarettes or other tobacco products. Meanwhile, five states, American Samoa, Guam, and Puerto Rico require tobacco retail licensure to sell tobacco products other than e-cigarettes. The average licensing fee is $120; 23 states charge less than $100. License fees range from $6 in New Hampshire to $800 in Connecticut. Six states do not charge any licensing fee and four states with TRL requirements do not mandate license renewal.

Benefits and Impact of TRL Programs

Research shows that strong TRL policies can lower the density of tobacco retailers, decrease youth initiation and usage rates, and reduce the sale of tobacco products to underage persons. For instance, in 33 California communities, sales to underage youth dropped by an average of 26% after enacting a strong TRL law. Another study in Pennsylvania found that youth e-cigarette use significantly declined after e-cigarette retailers were required to have a license. Research in Missouri and New York showed that prohibiting tobacco retailers near schools could nearly eliminate income- and race-based disparities in retailer density. In Philadelphia, three years after implementing TRL policies, there was a 20% decline in the density of tobacco retailers, a modest reduction in the disparity between low- and high-income communities, and fewer retailer exposures within 500 feet of school property.

According to Public Health Law Center and American Heart Association, effective TRL policies include the following common elements:

• Licensure Program. The policy should specify the process by which a retailer applies for, receives, and maintains permission to sell tobacco products. This includes the types of forms to be filed, deadlines, the annual renewal process, filing fees, and the consequences of failing to meet these requirements.
• Robust Enforcement Options. Tobacco retailers must comply with all federal, state, and local laws. The TRL policy should clearly outline prohibited conduct, such as sales to those below the legal sales age, tax violations, and promotional restrictions. It should also mandate at least one compliance check per store per year to ensure adherence to the minimum legal sales age. 
• License Renewal Fees. The policy should require retailers to pay an annual fee to obtain or renew their license, which covers the costs of administration and enforcement.
• Reasonable Penalties. The TRL policy should detail the penalties for violations, including a graduated system of penalties, starting with fines and escalating to license suspension or revocation for repeated offenses.

Jurisdictions seeking to implement a TRL law or strengthen existing TRL programs can consider existing laws and model policies (e.g., PHLC’s Model Ordinance). State health officials, along with state health agency staff, and other public health stakeholders can educate lawmakers on the efficacy of TRL programs to reduce tobacco use and collaborate with legal experts to draft clear and comprehensive legislation that covers licensing requirements, enforcement procedures, and penalties for non-compliance. Incorporating evidence-based strategies such as age verification, sales restrictions, retailer education, and location limitations can also craft a strong TRL program.

Current Trends and Future Directions in TRL Policies

In 2023 and 2024, several jurisdictions enacted or considered legislation related to implementing or strengthening TRL requirements. 

In March 2024, Utah enacted SB 133, requiring retailers of electronic cigarette or nicotine products to purchase from distributors that are licensed within the state. Wisconsin enacted SB 268 in December 2023, which extended retail licensing requirements to electronic vaping devices, aligning them with regulations for cigarettes and other tobacco products. Nevada’s AB 53, enacted in May 2023, raised penalties for sales of certain tobacco products to individuals under 21, increasing the civil penalty for initial violations from $500 to $2,500. Indiana also enacted SB 149 making it a Class C misdemeanor for tobacco and vaping businesses to operate within 1,000 feet of school property.

In November 2023, Michigan introduced SB 651 to require the licensure and regulation of establishments that sell, give, and/or furnish tobacco products and to impose associated fees. New Jersey proposed A3992 to increase penalties for prohibited sales of tobacco and vapor products and A2388 to increase the frequency of inspections at cigarette and vapor product retailers. South Carolina’s S. 514, introduced in February 2023, would require tobacco retailers to obtain and display a tobacco retail sales license. The bill would also increase penalties for retailers who sell to underage persons and mandate a minimum of one random, unannounced inspection by the Department of Revenue at each tobacco sales location per year.

Local licensing policies are also crucial for effectively enforcing tobacco control measures. As of March 2024, laws in 17 states prevent local governments from passing ordinances relating to licensure of tobacco products—including both over-the-counter and vending machine sales. Additionally, 15 states specifically preempt local restrictions on retail licenses for over-the-counter sales of tobacco products only.

Alternative Tobacco Control Strategies and Stakeholder Involvement

Jurisdictions without a licensure program may use a variety of other tobacco control strategies to limit the availability of tobacco and tobacco marketing. These strategies include raising tobacco taxes, enforcing minimum prices below which tobacco products cannot be sold, restricting the sale of flavored tobacco products, prohibiting tobacco product sales in specific location such as pharmacies and healthcare facilities, and mandating clear and visible health warnings about the dangers of tobacco use in retail displays. Additional measures include prohibiting the redemption of tobacco discounts, coupons, and promotions, and raising the minimum legal sales age to 21. While the federal minimum age for sale of tobacco products was raised from 18 to 21 years in December 2019, eight states have yet to align their laws.

Tobacco retailer licensing strategies are an effective policy approach to reduce tobacco availability, especially to underage persons, reduce marketing and advertising, and decrease tobacco-related disparities in low socioeconomic communities. ASTHO will continue to track state and federal laws on this important policy topic and share updates as appropriate.