December 2011

This supplemental policy provision is intended to be incorporated into TALC’s Model California Ordinance Requiring a Tobacco Retailer License. It cannot be adopted independently.

Developed by ChangeLab Solutions

This material was made possible by funds received from the California Department of Public Health, under contract #09-11182.

www.changelabsolutions.org/tobacco-control

Model California Ordinance Requiring a Tobacco Retailer License

Plug-in:Minimum Pack Size for Cigars

Model Licensing Ordinance Plug-in: Minimum Pack Size for Cigars 2

ChangeLab Solutions is a nonprofit organization that provides legal information on matters relating to public health. The legal information provided in this document does not constitute legal advice or legal representation. For legal advice, readers should consult a lawyer in their state.

ChangeLab Solutions formerly existed under the name Public Health Law & Policy (PHLP), which included the Technical Assistance Legal Center (TALC). Any references to PHLP or TALC in this publication should now be understood to refer to ChangeLab Solutions.

© 2012 ChangeLab Solutions

Introduction

The Technical Assistance Legal Center (TALC) developed this Plug-in for TALC’s Model California Ordinance Requiring a Tobacco Retailer License to assist California cities and counties that want to limit the sale of cigar products that are designed to appeal to young people.

A tobacco retailer licensing ordinance allows a local jurisdiction to exercise more control over where tobacco products are sold and what types of products are available in their community. This Plug-in limits the sale of cigars sold individually and in small packages. These products are particularly appealing to youth due to their low prices and candy flavors, and though they are often similar to cigarettes, they are not subject to the same restrictions against selling the product individually or in small quantities. This Plug-in allows communities to close that loophole. It also allows for optional exemptions for certain “premium” cigars meeting a specific definition, cigars sold above a certain price point, or cigars sold in specialty shops. For more information on these exemptions, see “Limiting ‘Teen-Friendly’ Cigars: What Communities Can Do,” a fact sheet from TALC available at www.phlpnet.org/tobacco-control/products/cigars-minimum-pack-size.

This Plug-in is intended to be incorporated into TALC’s Model Licensing Ordinance. Alternatively, a community may adopt these restrictions as a stand-alone law with separate enforcement provisions. If you would like to do this, please contact our staff attorneys for assistance at www.phlpnet.org/tobaccoquestions.

Appendix A to this Plug-in summarizes our nonpartisan analysis, study, and research on minors’ use of tobacco products, specifically single cigars, and the rationale for a restriction on cigar sales as an effective policy intervention.

How to use this Plug-inWhen adding this Plug-in to TALC’s Model Licensing Ordinance, be sure to fill in any blanks that have been provided (e.g., [ ____ ] ) to customize the language. Additionally, in some cases, options are offered (e.g., [ option one / option two ] ). Some options are followed by comments describing the legal provisions in more detail. Some degree of customizing is always necessary to make an ordinance consistent with a community’s existing laws. Note that if a term is capitalized in the Plug-in, it is a term that is defined in TALC’s Model Licensing Ordinance.

After adding one or more Plug-ins to the basic retail licensing ordinance, please verify that all the internal references to other sections are correct. Your city attorney or county counsel will likely be the best person to accomplish this for you.

If you have questions about how to adapt this Plug-in for your community, please contact TALC at www.phlpnet.org/tobaccoquestions. TALC’s full Model Licensing Ordinance, as well as additional Plug-ins, can be found on our website at www.phlpnet.org.

Model Licensing Ordinance Plug-in: Minimum Pack Size for Cigars 3

Amendments to TALC’s Model Licensing Ordinance

A. In SECTION I. FINDINGS, add the following findings to the Model Ordinance prior to the clause beginning with “NOW THEREFORE”:

WHEREAS, “little cigars” look nearly identical to cigarettes;i and

WHEREAS, although the sale of flavored and individual cigarettes is banned by federal law, neither federal nor California law restrict the sale of flavored cigar products or the sale of individual cigar products;ii and

WHEREAS, cigarillos such as Swisher Sweets and Black & Mild can have up to four times as much nicotine as a cigarette;iii and

COMMENT: To underscore the need for the ordinance in your community, further findings should be added based on local surveys regarding the low price of little cigars and cigarillos in your community; the typical placement of cigars, little cigars, and cigarillos near candy or gum in local stores; or statistics about tobacco use among youth locally. For example, local data show that 86.7 percent of stores in Lynwood, Calif., sold single cigarillos.

If this restriction is being drafted as a stand-alone ordinance, and not used as a Plug-in to a tobacco retailer license, these Findings should be modified. Consult your city attorney or county counsel or PHLP for assistance.

B. In SECTION II:

In Sec. [ ____ (*1) ]. DEFINITIONS, add the following definitions in alphabetical order:

(__) “Cigar” means any roll of tobacco wrapped entirely or in part in tobacco or in any substance containing tobacco, and all of the component parts of the Cigar (including but not limited to tobacco, filters, or wrapping). For purposes of this [ Chapter / Article ], “Cigar” includes, but is not limited to, Tobacco Products labeled “cigar,” “cigarillo,” “tiparillo,” “little cigar,” “blunt,” or “blunt wrap.”

COMMENT: This definition is written broadly to include all tobacco products that might be considered cigars, particularly those that are often flavored and may appeal to youth or new smokers. The second sentence may be omitted without changing the meaning, but it helps clarify what products are prohibited by the ordinance. Additional examples may be added.

Model Licensing Ordinance Plug-in: Minimum Pack Size for Cigars 4

Communities that don’t wish to ban blunt wraps should omit the portion of the first sentence following “substance containing tobacco” including the language in parentheses, and the words “blunt” and “blunt wrap” at the end of the definition.

In Sec. [ ____ (*2) ]. REQUIREMENTS AND PROHIBITIONS, add the following subsection:

(XX) MINIMUM PACK SIZE FOR SINGLE CIGARS.

COMMENT: This subsection is designated with the variable “XX” for purposes of the internal references in this Plug-in. When adding this provision to your licensing ordinance, use the appropriate letter to identify this subsection sequentially.

(1) Notwithstanding any other provision of this chapter, no Tobacco Retailer shall sell, offer for sale, or exchange for any form of consideration:

(a) any single Cigar, whether or not packaged for individual sale;

(b) any number of Cigars fewer than the number contained in the manufacturer’s original consumer packaging designed for retail sale to a consumer;

(c) any package of Cigars containing fewer than [ six ] Cigars.

COMMENT: This is the main provision of the Plug-in. The minimum number of Cigars in a pack can be set as high or low as a community desires to ban small packages of cigar products, such as two-packs, three-packs, and five-packs.

EXEMPTIONS FOR “PREMIUM” CIGARS:

COMMENT: Subparagraph (1), above, applies to all cigars, whether flavored or not, including so-called “premium” cigars. Some communities, for policy or political reasons, may want to create an exemption to allow sales of individual “premium” cigars.

The following four options are different approaches to creating an exemption for “premium” cigars, which are less often smoked by youth. Such an exemption is optional—a community could ban the sale of all single cigars and include no exemptions. In order to avoid accidentally exempting too many cigar products, a community may want to use more than one of these exemptions simultaneously. Our staff attorneys can help you think through which exemptions would work best for your local community.

Model Licensing Ordinance Plug-in: Minimum Pack Size for Cigars 5

OPTION 1: EXEMPTION FOR CIGARS WRAPPED IN WHOLE LEAF TOBACCO

(2) This section does not apply to the sale or offer for sale of Cigars which are [ wrapped in whole leaf tobacco ]. 

COMMENT: This option exempts certain kinds of premium cigars by describing how the cigars are wrapped. This option would prohibit the sale of cheap “little cigars” because they are not wrapped in whole leaf tobacco. This option may be a good one if a community can create and consistently update a comprehensive list of banned (or exempted) products so that enforcing the law is simplified. If so, this option would retain the complete ban on sales of little cigars and cigarillos unless those products were wrapped entirely in whole leaf tobacco. Another description of premium cigars may be substituted for the above suggested language.

OR

OPTION 2: EXEMPTION FOR TOBACCO RETAILER AT WHICH THE ONLY TOBACCO PRODUCT SOLD IS CIGARS

(2) This section does not apply to the sale or offer for sale of Cigars by [ a Tobacco Retailer who or which sells Cigars and no other Tobacco Products. ]

COMMENT: This option exempts stores that sell only cigars. For communities whose Codes contain a defined term for Tobacco Retailers that primarily or only sell cigars, such as “Cigar Bar” or “Tobacco Lounge,” that term may be used in place of the phrase in brackets. The term “Significant Tobacco Retailer” could also be used, if that term is defined in the city or county tobacco retailer licensing law. A definition of the term can be found in the Plug-in “No New Significant Tobacco Retailers.”

The phrase in brackets may also be replaced with descriptive language that best describes the businesses the city or county desires to exempt from the ordinance. Or, the language could require that tobacco products constitute a certain percentage of a retailer’s sales in order for the retailer to be exempted from the ban.

This exemption may be best suited for communities that have a small number of cigar bar–type businesses that depend largely or entirely on cigar sales.

This type of exemption may be the easiest to enforce because it is clear which types of businesses can sell single cigars. However, if the retailers that are exempted from the law sell little cigars and cigarillos in addition to “premium” cigars, this exemption may still allow youth to obtain individual flavored little cigars.

Model Licensing Ordinance Plug-in: Minimum Pack Size for Cigars 6

OR

OPTION 3: EXEMPTION FOR CIGARS ABOVE A MINIMUM WHOLESALE PRICE POINT

(2) This section does not apply to the sale or offer for sale of a Cigar for which the actual price paid by the retailer to the distributor for a single Cigar exceeds either [ three dollars ($3.00) ] or the dollar amount adopted by resolution of the [ City Council / Board of Supervisors ] and adjusted from time to time, whichever is higher. The public shall be given notice of any such resolution in the manner notice is given of ordinances of the [ City / County ].

(3) Every Tobacco Retailer shall maintain on its premises records, including legible invoices of Cigar purchases, as may be necessary to determine the wholesale price paid for Cigars, for a period of [ one ] year following each purchase. The [ Department ] shall have the right to inspect, examine, and copy such records at any time during normal business hours. Refusal to allow full inspection, examination or copying of such records constitutes a violation of this [ Chapter / Article]. If a Tobacco Retailer does not maintain the necessary records or fails to produce such records during normal business hours, the [ Department ] may determine the wholesale price for Cigars based upon the records provided by similarly situated businesses in [ City / County ]. Such determination shall be prima facie evidence of the wholesale price paid by the Tobacco Retailer in any subsequent administrative or judicial proceeding.

COMMENT: Because the wholesale price is not set by the retailer, using it as the benchmark prevents a retailer from merely marking up the cigar prices to meet the minimum dollar amount set in the ordinance (as would be the case if retail price were the standard). For an enforcement officer to know what the wholesale price is to determine compliance, retailers will need to maintain records. The Board of Equalization already requires retailers to maintain these records for tobacco tax enforcement purposes, so this provision imposes no additional burden on retailers.

The dollar amount listed in the ordinance can be adjusted as desired. Allowing an increase in this dollar amount by resolution simplifies the process of amending the ordinance to account for inflation.

The number of years the invoice records must be maintained on site can be adjusted as desired.

Model Licensing Ordinance Plug-in: Minimum Pack Size for Cigars 7

OR

OPTION 4: EXEMPTION FOR CIGARS ABOVE A MINIMUM RETAIL PRICE POINT

(2) This section does not apply to the sale or offer for sale of a single Cigar for which the retail price exceeds either [ three dollars ($3.00) ] or the dollar amount adopted by resolution of the [ City Council / Board of Supervisors ] and adjusted from time to time, whichever is higher. The public shall be given notice of any such resolution in the manner notice is given of ordinances of the [ City / County ].

COMMENT: This option uses the retail price of the cigar rather than the wholesale price used in option 3. Using this option, enforcement would be straightforward—if any tobacco product labeled "cigar" (or meeting the definition of Cigar) is sold individually for less than the minimum retail price, there is a violation. The ease of enforcement makes this option attractive, but an exemption based on retail pricing wouldn’t ban the sale of individual little cigars or cigarillos—it would only set a price floor for those products. Since the average retail price of a single little cigar or cigarillo is typically under $1, setting the price this high would probably remove much of the demand for such products, however they may still be legally sold. Retailers may opt to increase the retail price to above the minimum set by the law and, if there is any market remaining for such products at that price point, continue selling individual little cigars and cigarillos. In that scenario, retailers could make considerably more money per cigar product sold, potentially making up the profits lost by the reduced sales volume.

The dollar amount listed in the ordinance can be adjusted as desired. Allowing the city council or board of supervisors to increase this dollar amount in the future by resolution simplifies the process of amending the ordinance to account for inflation.

Model Licensing Ordinance Plug-in: Minimum Pack Size for Cigars 8

APPENDIX A

This Plug-in requiring a minimum pack size for cigars is based on extensive legal research and analysis, as well as on the evidence linking use of tobacco products to disease, and research on the use of tobacco products by minors. This Plug-in is intended to be used as one potential policy intervention designed to prevent minors from becoming addicted to nicotine and tobacco products.

This Appendix summarizes our nonpartisan analysis, study, and research on the use of tobacco products by minors, specifically single cigars, and the rationale for a restriction on sales of single cigars as an effective policy intervention. It is intended for broad distribution to the public. The presentation of this Plug-in, including this Appendix, is based on an independent and objective analysis of the relevant law, evidence, and available data, and should enable readers to draw their own conclusions about the merits of this Plug-in.

Numerous studies show that nicotine is addictiveiv and that the majority of adult tobacco users started as minors.v Therefore, California and the federal government have recognized the need to reduce the youth smoking uptake rate by adopting laws that limit access to tobacco products by those under the age of 18.vi Although little cigars are labeled “cigars,” they are functionally cigarettes—alike in every way except color.vii The sale of single cigarettes is already illegal under both federal and California law.viii This Plug-in aims to limit youth consumption of little cigars and cigarillos by creating a similar restriction on the sale of single cigars.

By eliminating the sale of individual cigars, proponents believe that the availability of tobacco to young people, including minors, will be reduced and that the rate of youth smoking will decrease. There is ample evidence that youth are attracted to little cigar and cigarillo products, which are often candy or fruit flavored.ix These products are sold at very low prices, which makes them affordable for young smokers, and often placed immediately adjacent to candy or other youth-oriented items in stores.x If such tobacco products may no longer be purchased individually but only in packages, which usually contain five or more cigars, it will be more difficult for young people to obtain them due to the increased cost.xi

Opponents of restrictions on the sale of individual cigars have argued, among other things, that cigars would still be available in packages containing multiple cigars (so the restriction does not entirely remove cigars from the marketplace); that youth will travel to neighboring cities to buy these products, hurting local small businesses; that there are many types of tobacco products that appeal to youth beyond single cigars, and the law unfairly singles out one tobacco product; that there already are age restrictions for the purchase of tobacco products, so this law is unnecessary; and that banning the sale of individual cigars would not significantly reduce the rate of youth smoking.xii However, in spite of these existing tobacco control measures, minors are still able to buy tobacco products in California, as evidenced by the statewide youth purchase rate of up to 11.6% in certain retailersxiii

Model Licensing Ordinance Plug-in: Minimum Pack Size for Cigars 9

and even higher youth purchase rates in specific California cities and counties.xiv

Additional arguments for and against specific provisions of this Plug-in can be found throughout the text of the ordinance, prefaced with the word “Comment.” Based on all available research and evidence, we have concluded that youth access to tobacco products, particularly those products that are attractive to youth because of their flavoring or very low price, remains a serious problem that often leads to addiction as an adult, and a multipronged set of policy interventions is necessary.

Model Licensing Ordinance Plug-in: Minimum Pack Size for Cigars 10

i Answers About Black & Milds, Swisher Sweets, and Other Little Cigars and Cigarillos. Available at: http://smokefree.gov/tob-

cigarillo.aspx. ii 21 C.F.R. § 1140.14(d).iii Health Effects and Trends. Smoking and Tobacco Control Monograph No. 9. NIH Pub. No. 98-4302, February 1998.

Chapter 3, Table 4a. Available at: http://cancercontrol.cancer.gov/tcrb/monographs/9/m9_3.PDF.iv U.S. Department of Health and Human Services, Public Health Service, Centers for Disease Control, Center for Health

Promotion and Education, Office on Smoking and Health. The Consequences of Smoking: Nicotine Addiction, a Report of the Surgeon General. 1988. Available at: http://profiles.nlm.nih.gov/ps/access/NNBBZD.pdf.

v Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Office of Applied Studies. 2003 National Survey on Drug Use and Health: Results. 2003. Available at: www.oas.samhsa.gov/nhsda/2k3nsduh/2k3Results.htm#ch5.

vi Tobacco Laws Affecting California. Oakland, CA: Technical Assistance Legal Center, 2009. Available at: www.phlpnet.org/tobacco-control/products/tobaccolawsca.

vii Smokefree.gov. Answers About Black & Milds, Swisher Sweets, and Other Little Cigars and Cigarillos. Available at: http://smokefree.gov/tob-cigarillo.aspx.

viii Family Smoking Prevention and Tobacco Control Act, Pub. L. No. 111-31, § 102, 123 Stat. 1776 (codified as amended in scattered sections of 5 U.S.C., 15 U.S.C., and 21 U.S.C.); 21 U.S.C. § 387a-1 (2009) and California Penal Code section 308.3.

ix Kathleen Dachille, Tobacco Control Legal Consortium, Pick Your Poison: Responses to the Marketing and Sale of Flavored Tobacco Products (2009). Available at: www.publichealthlawcenter.org/sites/default/files/resources/tclc-syn-flavored-2009.pdf.

x Feighery, E, et al., “Cigarette advertising and promotional strategies in retail outlets: results of a statewide survey in California,” Tobacco Control 10L:184-188, 2001.

xi Hana Ross and Frank Chaloupka. The Effect of Cigarette Prices on Youth Smoking. Reports on Industry Activity from Outside UCSF, Center for Tobacco Control Research and Education, UC San Francisco. 2001. Available at: http://escholarship.org/uc/item/8004m9n5;jsessionid=8CCACCF826DD1A51CE0C4451B5CBF445?display=all.

xii PHLP staff were unable to locate any studies supporting any of these potential arguments.xiii California Department of Public Health, California Tobacco Control Program. Youth Tobacco Purchase Survey, 2011.

July 2011. Available at: www.cdph.ca.gov/services/boards/teroc/Documents/California%20YTPS%202011_Ok%20for%20Media%20Use.pdf. xiv Tobacco Control and Prevention Program. Los Angeles County Department of Public Health, April 2010. Available at:

http://publichealth.lacounty.gov/phcommon/public/aboutus/aboutdisplay.cfm?ou=ph.