11-12-2014 Council Agenda - Laserfiche WebLink

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MEMORANDUM DATE: November 7, 2014 TO: Kathy Glanzer FROM: Kevin Beck RE: Tobacco Licensing Under City Code § 802, the City currently has two types of licenses for retail establishments to sell tobacco: a Tobacco Store license and a General Sales and Display license. In sum, a tobacco store license is for retail establishments devoted almost exclusively (90% of revenue) to the sale of Tobacco Products, Tobacco -related Devices, and Delivery Devices, as those terms are defined in the ordinance. The General Sales and Display license is for retail establishments that sell tobacco incidental to the store's primary purpose (i.e. gas station, grocery store, convenience store, etc.). An issue has been raised regarding a license for a convenience/tobacco store that might not meet either of the above definitions. For example, a store that derives less than 90 percent of its gross revenue from the sale of Tobacco Products hut, at the same time, the sale of tobacco products is more than merely incidental to the business's primary purpose and comprises large portion of the store. It is somewhat difficult to address this "middle" ground because it could range greatly, from a store whose revenue from tobacco sales is 80% on one end, to a store whose revenue from tobacco sales is 20% but the tobacco section takes up a large portion of the store's retail space. Accordingly, the hest option might be to not create a third type of tobacco license which would require the retail establishment to comply with the Tobacco Store license requirements or the General Sales and Display license requirements. It should be noted that the City has currently issued two Tobacco Store licenses, which is the maximum under § 802.025. If a third license category is not created and an individual applies for a Tobacco Store license, the City could consider amending the ordinance to increase the number of authorized Tobacco Store licenses. If, however, the City would like to create a third type of license, we propose a definition that would effectively apply to all stores selling tobacco that do not fall under the Tobacco Store License or the General Sales and Display License. Possible language for defining this new type of license could be similar to the following: "Convenience/Tobacco Store" means a retail establishment that derives less than 90 percent of its gross revenue from the sale of Tobacco Products, in which the sale of other products is not merely incidental. This definition does not include an accessory tobacco section of any business establishment meeting the definition of General Sales and Display. Since it falls in the middle of our current licensing scheme and could vary greatly in the size and type of sales, if a third license is created, we suggest restricting the Convenience/Tobacco Store License to allow for the sales of only Tobacco Products and not allow for the sale of Tobacco - 9