DATE: March 26, 2025
TO: Honorable Mayor and City Councilmembers
FROM: Development Services Department
TITLE: UPDATE ON THE CITY’S TOBACCO RETAILER LICENSE PROGRAM
RECOMMENDATION
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Staff recommends that the City Council receive an update on the City’s Tobacco Retailer License (TRL) program.
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BACKGROUND AND ANALYSIS
The City’s TRL program was initiated following requests from community health advocates concerned about youth access to tobacco products. Statewide statistics citing 2018 data showed that 1 in 8 high school students had used a tobacco product, and nearly 85 percent of the tobacco products used by high school students were electronic smoking devices, or “vapes.” Vista Community Clinic (VCC) conducted its own research on teen access to tobacco products in Oceanside, which included underage buy operations. The results found that despite existing State law prohibitions on these sales, persons under the age of 21 were frequently able to purchase tobacco products. VCC recommended the creation of a TRL program as an additional tool to reduce youth tobacco use, citing the successful implementation of similar TRL programs in other North County cities. On August 19, 2020, the City Council unanimously voted in favor of adopting Oceanside’s own TRL ordinance. Upon adoption of the ordinance, Council directed staff to return to Council with a future update on how the program is operating. The purpose of this agenda item is to present such information.
Since adoption of the City’s TRL ordinance, additional State assembly bills, senate bills, and ballot propositions have been passed to further restrict access to flavored tobacco products. Senate Bill 793, the first legislation to prohibit flavored tobacco products in the State, was immediately challenged by referendum, eventually making its way to the November 2022 General Election ballot as Proposition 31. The proposition supported the State’s ban on flavored tobacco products; it passed with the support of over 63 percent of California voters and became effective December 22, 2022. Since that date it has been illegal statewide to sell flavored tobacco products to anyone, regardless of their age.
Since 2022, the City has made significant progress towards ensuring TRL ordinance compliance on the part of local tobacco retailers, including enforcing the current prohibition of flavored tobacco products. All businesses within the City are required to obtain a TRL if they sell any type of tobacco products, including cigarettes, vape devices, vape liquids, chewing tobacco, or cigars. Although the number of licenses varies as businesses open and close, there are currently 100 known businesses within the City meeting this requirement. An annual fee of $319.63 was established in 2020 and based on the staff time necessary to charge each retailer in order to obtain a TRL. It is assumed that retailers pass this cost onto tobacco product consumers. There have been no increases to the fee since its inception. The cumulative total amount of licensing fees is approximately $32,000 annually, and that revenue is split between three departments for administrative and enforcement purposes. The TRL license fee is similar to fees charged by other cities in the County. A breakdown of TRL staff costs includes:
|
Administration/Enforcement Element - Costs to City |
Cost per Licensee |
|
Finance - Administration of Each License |
$ 144.74 |
|
Code Enforcement - Inspection of Each Retailer |
$ 127.52 |
|
OPD - Undercover Buy Operations |
$ 47.37 |
|
TOTAL |
$319.63 |
The City’s TRL fee includes cost recovery funding for several administrative and enforcement elements. The Finance Department, Code Enforcement Division, and Oceanside Police Department (OPD) all fulfill a specific role in the issuance and maintenance of TRLs. First, an application similar to a business license application is submitted to the Finance Department. A background check of the operator is then conducted to ensure the applicant has not been convicted of selling tobacco or alcohol to underage persons within the past five years. Next, using a checklist (Attachment 2), the Code Enforcement Division conducts an inspection of the business to ensure that, for example, tobacco products are kept out of customers’ direct reach, state-required STAKE Act point of sale labeling is placed near cash registers, and flavored tobacco products are not offered for sale. Finally, Code Enforcement and OPD work together to conduct undercover buy operations at businesses suspected of selling to underage individuals, selling prohibited tobacco products, or other significant State law violations.
While conducting Code Enforcement TRL inspections in calendar year 2024, staff discovered 21 percent of retailers were out of compliance with State and local regulations, thereby failing their initial inspection. Many of these businesses were compliant on subsequent inspection visits, however, the same inspection using the same criteria was previously performed in 2023. Code Enforcement staff also discovered that many of the businesses that failed an inspection would simply remove the prohibited products in order to pass the inspection then return the prohibited products to the shelves for sale once the inspection was completed. Other businesses were found to be concealing prohibited products that were discovered through additional enforcement action. Subsequent undercover operations revealed six of the six businesses visited by OPD detectives in September 2024 possessed prohibited tobacco products. One business was found to offer for-sale synthetic psychoactive compounds (prohibited since 2016), which could constitute a significant health and safety risk to the public.
Although regular annual inspections likely cannot prevent every youth sale or prohibited product, the TRL process continues to expose violations that may otherwise go undetected. Detection and enforcement efforts have proven to reduce youth accessibility to tobacco products as intended by a variety of federal, state, and local programs. For example, statistics show a statewide decrease in youth tobacco use from 12.2 percent in 2018 to 7.3 percent in 2023; this data includes Oceanside’s own TRL and inspection process.
As noted by the information provided above, staff believes the TRL program is effectively achieving its primary goal of ensuring local business compliance with various tobacco related laws while significantly restricting youth access to such products.
FISCAL IMPACT
No fiscal impact.
CITY ATTORNEY’S ANALYSIS
City Attorney’s analysis does not apply.
end
Prepared by: Kirk Mundt, Code Enforcement Division Manager
Reviewed by: Darlene Nicandro, Development Services Director
Submitted by: Jonathan Borrego, City Manager
ATTACHMENTS:
1. Staff Report
2. TRL Inspection Form