So you want to sell tobacco?
You’re in good company. Although smoking has declined in the last decade, a new generation of consumers needs somewhere to get their traditional and next-generation tobacco products.
Whether you’re opening a tobacco store or have an established store and want to start selling tobacco products, you’ll need a tobacco license. It’s an age-restrictive business, and the industry is tightly regulated.
This blog post will detail the licenses you need to obtain, the requirements you need to fill, and the associated costs of each – everything you need to know to make an informed decision.
How Much is a Tobacco License?
You need a license to sell, import, or manufacture cigarettes and other tobacco products.
Other tobacco products may have less strict licensing requirements than cigarettes, but it varies by state. Your local, state, or federal authority will issue your license depending on the location of your business and whether you plan to sell products, or open a cigar lounge or smoker’s cafe.
As of 2020, 39 states require a license for over-the-counter tobacco sales. A license indicates that you’re legally allowed to sell cigarettes and other tobacco products according to state law. Unfortunately, the state can and will reject applications, so ensure you cover the criteria you need for a successful application.
Depending on the location of your store, you’ll be subject to fines for selling tobacco products without a valid license. In Alabama, for example, you could pay fines of $100 to $500 for the first offense, and $500 to $1,500 for subsequent offenses.
What Kind of Tobacco License Do You Need?
It depends on where you operate, but most states require an RTL (Retail Tobacco License), which signifies that a business is allowed to sell tobacco products following state law. You can generally apply for a license through online registration, but some states require you to apply for a license in person.
Remember that you’ll need to renew your license annually or bi-annually, depending on your state.
How Much Does a Tobacco License Cost?
The cost of a tobacco license varies by state. In all cases, you’ll apply for a license and pay a one-time fee, valid for 12 or 24 months. Fees range from $15 to $200; however, in some states, like Oregon, the cost could be as high as $953.
The licensing fee for retailers in Georgia is $10 renewable annually, but in Chicago, it’s $550 per location, renewable every two years. You need a separate license for each store if you have more than one retail location. In most states, it’s possible to submit a single application for multiple locations.
In some states, you’ll be required to renew your license yearly or every two years. Getting a renewal license is relatively straightforward as long as you haven’t incurred fines or penalties. You could be fined or suspended for several reasons, including selling tobacco products to minors.
As of December 2019, the federal age of sale for tobacco products is 21, with no exemption for military personnel. If you violate laws, you could be subject to jail time, fines, or revocation of your license to sell tobacco products.
Do your due diligence and find out the laws and regulations for your state. The Tobacco 21 website provides all the information you need!
What Responsibilities Do You Have as a Tobacco License Holder?
It’s best practice to ensure you comply with your license's rules and regulations.
Prominently display your license for the public to see. Keep purchasing invoices for tobacco products for four years; for the first year, you must keep those invoices at the location where you have a license. You have to allow relevant authorities access to your invoices upon request.
You may only sell packaging that displays the required warning statement on the label, and comply with FDA requirements for all self-service displays and labeling You must also follow the FDA’s advertising, marketing, and promotion rules.
How a Modern Point of Sale (POS) System Helps You Take Control of Your Business
Despite the headache of applying for licenses and the requirements that come with it, cigarettes and tobacco products are a goldmine for many retail store owners and smoke shops. As long as you’re diligent, you’ll be good to go.
POS Nation works with hundreds of tobacco shops and cigar lounges nationwide. With carton-pack inventory tracking and prebuilt reports, our POS system provides the peace of mind you need to take total control of your business.
An added benefit is our built-in ID verification feature, which helps you and your cashiers sell age-restricted items to your customers. You can manually enter the customer’s date of birth or, if you’ve upgraded to the age verification scanner, scan the QR code on the back of their driver’s license. The software then calculates the age and notifies the cashier if the customer is underage.
Discover more about the features you need and the questions you should ask when looking for a POS system for your business with our Tobacco POS System Buyers’ Guide.