What is a “moratorium ordinance,” and how can it affect tobacco sales in your community?

A moratorium ordinance is a local law that takes immediate effect to temporarily prohibit a particular land use so that a locality can have the time it needs to study the potential effects of the proposed use and establish new, permanent regulations of that use. Several California municipalities have enacted moratorium ordinances to temporarily stop business licenses, building permits, or use permits from being issued to new smoke shops, hookah lounges, and other tobacco retailers pending development of new tobacco control standards.

Requirements

Under California Government Code section 65858, a city or a county may adopt an interim ordinance to temporarily prohibit certain land uses, including particular types of businesses, in the community. This type of ordinance is commonly referred to as a “moratorium ordinance.” The purpose of a moratorium ordinance is to give the locality time to study the potential impact of particular activities and figure out whether and how these activities should be regulated. Several municipalities without existing laws regarding smoking lounges, hookah bars, or electronic cigarette retailers have adopted urgency ordinances after receiving inquiries from individuals interested in opening these businesses. The rationale for an urgency ordinance that takes immediate effect is to prevent a “land rush” of applications to establish new uses before standards can be put in place. The delay in permits allows the city or county to subject all new uses to the new standards.

A locality can adopt an urgency ordinance without following the typical procedures that it would use to amend its municipal code, which require two approvals (called “readings”) by the City Council or Board of Supervisors and a 30-day delay between the second reading and the effective date of the new law. As a result, an urgency ordinance can be passed without advance notice to the public and can be immediately effective. California law requires that an urgency ordinance be approved by a four-fifths vote of the local legislative body.

An urgency ordinance may remain in effect for only 45 days, unless it is extended by another four-fifths vote. After notice and a hearing, a local government can extend the ordinance for either ten months and 15 days, with the option of an additional one-year extension, or 22 months and 15 days. In other words, an urgency ordinance can be extended so that its full duration is up to two years. Any extension requires a four-fifths vote of the local legislative body.

California law requires that a moratorium ordinance contain findings stating why the ordinance is needed to address a current and immediate threat to public health, safety, or welfare. 

Tobacco retailers, hookah lounges, and electronic cigarette lounges

Several municipalities have used moratorium ordinances to temporarily stop business licenses, building permits, or use permits from being issued to new retailers who will sell tobacco products and tobacco paraphernalia. Some communities also have enacted temporary moratoria on new electronic cigarette retailers, hookah bars, smokers’ lounges, and head shops. Examples of municipalities that have enacted moratoria related to tobacco retailing include the cities of Alhambra, Bellflower, Buellton, Carpinteria, Cerritos, Duarte, Monrovia, Norwalk, Richmond, Rohnert Park, San Jacinto, Seal Beach, and South Gate. 

Local governments have provided a variety of reasons for enacting urgency ordinances that temporarily ban certain tobacco retailers. These reasons include sales to minors by existing tobacco retailers; a current overconcentration of tobacco retailers in the community; the risk of increased public nuisance complaints and criminal activity surrounding smoke shops; and incompatibility of these retailers with existing businesses.

In the case of urgency ordinances that regulate electronic cigarette retailers, municipalities have cited the lack of federal and state regulation of electronic cigarettes and the potential health risks that are not yet fully understood by the general population, especially youth.

Urgency ordinances pertaining to hookah lounges and smokers’ lounges have included findings regarding the health risks of secondhand smoke exposure to employees, passers-by, and patrons of neighboring businesses. Municipalities also have cited the need to put these businesses on hold while the community develops comprehensive regulations regarding secondhand smoke exposure to prevent the “land rush” discussed above.

Relationship with tobacco retailer licensing ordinances

Urgency ordinances can be used to temporarily stop new tobacco retailers from entering the market. However, urgency ordinances typically cannot address the public health problems caused by existing tobacco retailers. Municipalities may want to explore how an urgency ordinance can be used in tandem with a tobacco retailer licensing ordinance to develop a comprehensive approach for regulating tobacco retailers. A tobacco retailer licensing ordinance can be used to ensure that new and existing retailers comply with local, state, and federal tobacco control laws.

A community that is in the process of adopting a tobacco retailer licensing ordinance could enact a moratorium ordinance to prevent new retailers from moving in while the licensing program is being adopted and implemented. Localities should coordinate efforts in developing both types of ordinances, as the findings needed to support an urgency ordinance could potentially be used for a tobacco retailer licensing ordinance as well.  

A local tobacco retailer licensing ordinance can help address several of the public health and safety concerns that have prompted municipalities to adopt moratorium ordinances. ChangeLab Solutions has developed several policy options, called "Plug-ins," that a community can use to customize its tobacco retailer licensing ordinance by plugging these optional inserts into the base ordinance. For example, municipalities that want to permanently ban new tobacco shops or smoking lounges can make these businesses ineligible to obtain a license to sell tobacco. Communities that are concerned about an overconcentration of tobacco retailers can restrict the number of tobacco retailer licenses that they will issue. Communities that want to curb drug paraphernalia sales by new and existing tobacco retailers can require retailers to comply with state drug paraphernalia laws as a condition of applying for and maintaining a local tobacco retailer’s license. For more information about tobacco retailer licensing ordinances and the optional plug-ins to enhance them, please see our webpage on Tobacco Retailer Licensing.