Each jurisdiction will obviously be different — here we cover DC.
We have been contacted by several clients interested in obtaining tobacco licenses in the District of Columbia. The process can be a little confusing, but understanding the different categories goes a long way in ensuring compliance with the law.
Initially, the applicant must decide what type of establishment they are interested in opening. If this is a current business, then the question revolves around the nature of the current operations. All businesses in DC require a basic business license (BBL). Obtaining this is covered in a different article. However, the type of business license endorsement – i.e. what you may actual use the license for – varies based on the intent of operations. In terms of tobacco sales, there are two different types of BBLs — a tobacco retailer, and everyone else. To become a tobacco retailer, your gross sales of tobacco products must be over 25% of the annual business sales. Additionally, you must advertise yourself as a tobacco retailer. Examples are cigar shops, and cigarette sales boutiques. Also, you may need a vending license if you sell tobacco products from a vending machine (this is very rare; cigarette vending machines were outlawed many years ago).
The terms “tobacco product” is defined by DC Code 7-1702(7), and includes lit and unlit tobacco products, as well as electronic cigarettes. Interestingly, the term “retail store,” for which the licensing requirements apply, does not include wholesale establishments. Restaurants and cafés are covered under a different section (for further definitions on “retail establishment” and other tobacco related code issues, see DC Code 7-1702).
Retail stores that sell less than 25% of their gross annual revenue in tobacco product do not need a specific BBL endorsement as a tobacco seller. Provided, however, that they do no permit smoking on the premises or in the public spaces allocated for sales.
Restaurants and bars are slightly different story. Like retail establishments, a restaurant or bar (eating establishment) requires a BBL. However, if the eating establishment has DC Alcohol Beverage Regulation Agency (ABRA) endorsement for sidewalk seating, smoking is permitted outside at tables managed by the eating establishment. No smoking is permitted inside without special exception. Like retail stores, it is essential that sales of tobacco products, if any, do not exceed 25% of the gross revenue of the business. If they do, you need speak to a specialist on zoning and business licensing. Certain eating establishments are exempt from the 25% rule where they have been approved as a cigar bar, for example. However, these are highly technical definitions that are better left to the experts.
It is possible to seek an exemption from the DC Department of Health, to permit indoor smoking. To apply, you need to have a CPA certify that at least 10% of your annual sales will be from tobacco products, and that you have complied with indoor safety requirements. The form can be found on the DC Department of Health website here: https://dchealth.dc.gov/sites/default/files/dc/sites/doh/publication/attachments/Smoking%20Exemption%20Application%20%28Final%201%29.pdf.
Although the form is generally straight forward, there can be a few confusing aspects that cause problems. Any eating establishment that has already permitted indoor smoking, without the exemption, will be denied. Any location that cannot verify its 10% or greater sale of tobacco product, will be denied. A careful review of the form is needed – and it is highly recommended that you speak to a competent attorney prior to filing.