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ADOPT AN URGENCY ORDINANCE AMENDING TITLE 5, CHAPTER 5.104 OF THE STOCKTON MUNICIPAL CODE UPDATING TOBACCO RETAIL LICENSE REQUIREMENTS AND REGULATIONS
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RECOMMENDATION
It is recommended that the City Council:
1. Adopt an urgency ordinance amending Title 5, Chapter 5.104 of the Stockton Municipal Code relating to tobacco retailers.
2. Approve and issue the attached City Council Report pursuant to Government Code Section 65858(d).
3. Authorize the City Manager, or designee, to take all appropriate and necessary actions to carry out the purpose and intent of the ordinance.
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Summary
Staff is presenting extensive updates to the City’s existing Tobacco Retailer Ordinance (SMC 5.104). The purpose of the Tobacco Retailer Ordinance is to encourage responsible tobacco retailing and to discourage violations of tobacco-related laws, especially those that prohibit or discourage the sale or distribution of tobacco products to minors or prohibit the sale of flavored tobacco products, but not to expand or reduce the degree to which the acts regulated by Federal and State law are criminally proscribed or to alter the penalties provided by such laws. After adoption of the original Tobacco Retailer Ordinance in 2023, there remained a proliferation of tobacco retailer businesses, specifically smoke shops, and the harmful effects of tobacco, including flavored tobacco and other products sold at these establishments, continued to negatively impact the health, safety, and welfare of City residents, especially youth. Staff was directed to study the issue further and propose amendments to the Tobacco Retailer Ordinance which would address these issues.
Further, California Government Code Section 65858(d) requires the City Council to issue a written report ten (10) days before the earliest of either: the interim ordinance’s expiration; or prior to the adoption of an extension. The report shall describe the measures the City is taking to alleviate the condition(s) that led to the interim ordinance’s adoption. The approval and issuance of the attached City Council Report (Attachment B) will satisfy City Council’s requirements pursuant to California Government Code Section 65858(d).
DISCUSSION
Background
On June 20, 2023, the City Council adopted Ordinance No. 2023-06-20-1502 requiring all retailers who sell tobacco and tobacco products in the City to obtain a tobacco retail license. The ordinance also provided a process for the application, approval, and denial of a license application. The ordinance went into effect on September 18, 2023, and licensing began on a rolling basis for the approximately 272 tobacco retailers existing in the City at that time. The continued rise in smoke shop applications, particularly those offering flavored tobacco and vaping products that disproportionately appeal to youth, has prompted heightened concern from community members, neighborhood groups, and public health advocates. Recent data and anecdotal reports from school administrators and neighborhood leaders suggest a correlation between the presence of tobacco retailers and increased youth access to such products. Many existing retailers are clustered in low-income and underserved communities, raising environmental justice and equity concerns about disproportionate health impacts. Additionally, issues such as inadequate separation between smoke shops and sensitive uses (e.g., schools, daycare centers), inadequate operational standards, and limited enforcement tools have made it clear that a more robust policy framework is needed. While progress has been made during the enforcement of the current Tobacco Retailer Ordinance, including the successful revocation of four (4) existing tobacco retail licenses, the denial of ten (10) additional applications for new tobacco retail licenses, and the criminal prosecution of fifteen (15) individuals found guilty of selling flavored tobacco products, additional regulation is still necessary to adequately address the danger to public health, safety, and welfare presented by the proliferation of tobacco retailers, particularly those who continue to sell flavored tobacco products.
On March 4, 2025, the City Council adopted Urgency Ordinance No. 2025-03-04-1504, establishing a temporary 45-day moratorium on the establishment of new, and relocation or physical expansion of existing, tobacco retail businesses, commonly known as smoke shops, within the City of Stockton. The urgency ordinance was adopted pursuant to Government Code Section 65858 in response to the increasing concentration and proliferation of tobacco and vape retailers in specific neighborhoods, particularly in proximity to schools, parks, and youth-serving facilities.
Urgency Ordinance No. 2025-03-04-1504 was set to expire on April 18, 2025. On April 15, 2025, the Stockton City Council adopted Ordinance no. 2025-04-15-1601, extending Urgency Ordinance No. 2025-03-04-1504 for 10 months and 15 days pursuant to Government Code Section 65858(a). Ordinance No. 2025-04-15-1601 is set to expire on March 2, 2026.
The initial moratorium and subsequent extension were enacted to allow the City to assess the potential adverse impacts of tobacco retail businesses on public health, safety, youth exposure, land use compatibility, and neighborhood character, and to evaluate the effectiveness of existing regulations and prior amendments through observation and analysis.
Present Situation
Since the adoption of the moratorium, City staff have continued to study the issue. Specifically, the Administrative Services, Community Development, and Stockton Police Departments, have led efforts to revise the existing Tobacco Retailer Ordinance to further address the public health and safety threats created by smoke shops under the existing ordinance.
The following is a summary of the proposed revisions reflected in Attachment A:
1. Added express prohibition on the sale of flavored tobacco products, industrial hemp products containing intoxicating cannabinoids, and illegal cannabis.
2. Added numerous definitions to ensure that compliance and enforcement for Chapter violations are clear.
3. Replaced having one single tobacco retailer license type with 4 separate license types:
a. Tobacco retailer- Exempt,
b. Tobacco retailer- Ancillary,
c. Tobacco retailer- Smoke shop, and
d. Tobacco retailer- Smoking lounge.
The separate license types allow for application requirements, locational criteria, operational mandates, and enforcement efforts to be tailored to the different types of business operations and their unique community impacts.
4. The license type “Tobacco retailer- Exempt” creates an exemption from the license requirement to incentivize fresh and healthy food sales for City residents.
Retail (e.g. grocery) stores have to apply for a license but are exempt from locational and operational requirements if they use less than 5% of their retail sales space for tobacco and more than 10% or more of their retail sales space for the sale and display of fresh food, including agricultural products like fresh fruits and vegetables; nuts; minimally processed prepared foods; fresh meat, fish, or poultry; juice and dairy products; and fresh baked goods, breads, and cereals.
5. New application requirements:
a. In addition to existing Chapter 5.104 requirements, applicants for all four (4) license types must submit a layout of the premises showing where tobacco retailing will take place and areas where tobacco will be stored.
b. Smoke shop applicants will additionally have to submit a security plan for review and approval by the Police Department that includes video surveillance, physical security, and a uniformed security personnel deployment plan.
c. Smoke shop applicants will also be subject to background checks. If, in the Chief of Police’s opinion, an applicant’s background renders them unsuitable to operate a smoke shop, then the application will be denied.
6. Requires Tobacco retail licensees to maintain a valid business license that identifies tobacco retail sales on the business license. If a license is revoked, the business license shall be updated promptly.
7. Strengthened locational criteria:
a. New Smoke shops, General tobacco retailers, and Smoking lounges cannot be within 1,000 feet of sensitive receptors or other General tobacco retailers or Smoke shops.
b. Sensitive receptors include residential zones or uses, K-12 schools, childcare facilities, public parks and youth facilities, religious facilities, and drug or alcohol recovery/treatment facilities.
8. Added express ability for law enforcement to conduct scheduled or unannounced inspections of tobacco retail licensees’ premises.
a. Refusal to allow an inspection is a violation of the revised ordinance.
b. A fee shall be charged for such inspections to ensure cost recovery of staff time.
9. Expanded the grounds for suspension and revocation of licenses to include the sale of tobacco to minors or selling flavored tobacco and knowingly concealing any flavored tobacco or intoxicating products with the intent to evade or avoid compliance with the revised ordinance.
a. First violation for such actions shall result in suspension for 30 days;
b. Second violation shall result in suspension for 60 days; and
c. Third violation shall result in revocation.
10. Added operational requirements for all tobacco retailers:
a. Tobacco retailing can only occur within the approved premises, not in the parking lot, vehicle, or storage container;
b. Clerks selling tobacco products shall be at least 21 years of age; and
c. Tobacco products must be displayed in one contiguous area of the store, as shown on the approved site plan, not throughout a retail shop.
11. In addition, smoke shops must also operate:
a. Only pursuant to their Police Department approved security plan; and
b. Only between 6:00 a.m. and 10:00 p.m.
12. Added requirement that neither Smoke shops nor Smoking lounges may operate as part of, or in the same business space, where alcoholic beverages are sold.
13. All tobacco retailers are banned from selling flavored tobacco; however, the new ordinance added an exception that allows licensed Smoking lounges to sell flavored premium cigars with a wholesale price of $12 each or more, flavored loose-leaf pipe tobacco, and flavored shisha/hookah tobacco for onsite consumption only.
14. Expressly prohibits tobacco retailers from displaying or selling items for the purpose of intoxication, including cannabis, psilocybin, mushrooms, nitrous, kratom, and aerosols.
a. Revisions prohibit the sale of items for consumption that contain hemp-derived THC or intoxicating cannabinoids.
15. Penalties for Violations have been revised to clarify allowed penalties for violations and to increase the number of violations that may be charged during an inspection.
16. The Police Department is now expressly allowed to seize any tobacco product that violates the revised ordinance.
Effective Date of the Ordinance
The proposed urgency ordinance will go into effect immediately upon adoption by a four-fifths (4/5) vote. Adoption of the urgency ordinance is necessary for the immediate preservation of the public health, safety, and welfare based on the City’s determination that the facts presented in the urgency ordinance still exist and constitute a current and immediate threat to the public health, safety, or welfare. Because the current moratorium on the establishment, relocation, or physical expansion of tobacco retailers is set to expire on March 2, 2026, there is a need for this ordinance to go into effect immediately so that there is not a period of time after the expiration of the moratorium but before the ordinance amending the current Tobacco Retailer Ordinance goes into effect, which would allow for the continued proliferation of smoke shops within the City in contrast to the purpose of the moratorium.
Due to the upcoming expiration of the moratorium, staff has separately agendized an extension of the moratorium under the public hearing section of the February 17, 2026 City Council agenda. In the event the City Council requires additional revisions to this ordinance, staff will recommend adoption of the moratorium extension under that item. If this ordinance is adopted, the public hearing item will be removed from the agenda.
FINANCIAL SUMMARY
Projected tobacco retail related revenue is anticipated to decrease from pre-moratorium levels. This reduction reflects enhanced regulatory requirements that are expected to limit the number of new tobacco retail business openings. Any revenue impacts are not anticipated to materially affect the City’s General Fund.
Attachment A - Proposed TRL Ordinance (Redline)
Attachment B - City Council Report Pursuant to Government Code Section 65858(d)