October 1 Tobacco Permit Deadline Nears With Virginia ABC Regulations Still Unfinished
Retailers must hold a Virginia ABC tobacco permit to sell cigarettes, vapes and nicotine products starting Oct. 1. Applications take 20 to 30 days, and comment on the rules governing the program does not close until Oct. 24.
Virginia retailers have nine days left before a new tobacco permit requirement takes effect, placing convenience stores, gas stations, grocery stores, vape shops and a good many restaurants, bars and hotels under the licensing and enforcement authority of the Virginia Alcoholic Beverage Control Authority.
Beginning Oct. 1, covered businesses must hold a Virginia ABC retail tobacco permit before selling cigarettes, nicotine products, electronic smoking devices and many related products and accessories.
Virginia ABC says online applications take roughly 20 to 30 days to process, and paper applications longer. That timetable means a retailer applying now should not expect a permit in hand by Oct. 1.
The Authority has not announced a general grace period for businesses whose applications are still pending. Its guidance warns that selling covered products without a permit after Oct. 1 may result in misdemeanor criminal charges.
The Authority has not published how many businesses it expects to permit, or how many applications it has received.
The rules are not finished
The deadline arrives while Virginia ABC is still writing the regulations that will govern the program.
The Authority published its proposed Retail Tobacco Regulations, 3VAC5-90, on Aug. 24. The public comment period remains open until 11:59 p.m. on Oct. 24, more than three weeks after retailers are required to hold permits. No public hearing is scheduled. As of this week the Town Hall forum showed no comments filed.
The General Assembly directed Virginia ABC to promulgate implementing regulations by Dec. 1.
The Oct. 1 requirement comes from statute and is not delayed by the unfinished regulations. But the proposed rules are where the operating details live: designated managers, employee training, recordkeeping, inspections, identification procedures and the penalty schedule.
The result is an unusual sequence. Businesses have to obtain permits and begin operating under the new law before the comment period on the rules has closed.
Restaurants, bars and hotels are named in the law
The statutory definition of a retail tobacco establishment reaches “any grocery store, retail tobacco product shop, kiosk, convenience store, gasoline service station, bar, or restaurant where retail tobacco products are available for sale.”
A restaurant or bar that sells cigarettes, vapes or nicotine pouches needs a permit. So does a hotel gift shop. Because a separate permit is required for each place of business, a hotel with a gift shop and a separate lobby kiosk needs two.
The carve-out is narrow. A business selling only cigars or pipe tobacco, as those terms are defined in Virginia law, is outside the requirement. One vape or one tin of pouches on the shelf alongside the humidor ends that exemption.
Every location needs its own permit
A separate permit is required for every business location selling covered products. A company running multiple stores applies separately for each.
Holding a Virginia ABC alcohol license does not carry the privilege. Existing licensees have to apply for the tobacco permit too.
The application fee is $300 per location for businesses that already hold an ABC alcohol license and $400 for everyone else. The first 12-month permit is covered by that fee, though the Authority has not yet set the annual renewal fee.
Applicants provide business documentation, ownership records and identification, and owners holding 10 percent or more are subject to a $15 criminal background check by the Virginia State Police. Existing ABC licensees get a break here: the Authority’s bulletin says the check “will not be required for any individual who has completed this process with Virginia ABC within the last 24 months.”
For established businesses, the review can surface inconsistencies in ownership records, leases or organizational documents that have drifted since an earlier alcohol license or tax registration was approved. Those can delay the tobacco permit and, in some cases, raise questions about the alcohol license already on file.
More than cigarettes and vapes
The requirement covers a wider range of products than many operators expect.
Covered products include cigarettes, chewing tobacco, snuff, nicotine pouches, heated tobacco products, vapor products and electronic smoking devices. Devices and the substances aerosolized in them are covered whether or not they contain nicotine.
Parts and accessories are in as well, including blunt wraps, hemp wraps and glass pipes.
Internet and telephone sellers are covered too. Under the proposed rules, an in-state or out-of-state business taking orders by internet or telephone and shipping covered products to Virginia consumers needs a Virginia retail tobacco permit first.
New operating rules are coming
The proposed regulations would add several day-to-day obligations.
A designated manager would have to be present and in actual charge whenever the establishment is open for business, whether or not tobacco is being sold at the time, with that person’s name posted conspicuously in letters not less than one inch.
Retailers would have to train employees on age restrictions, acceptable forms of identification, required signage and prohibited sales, and certify at application that the training has been done. Virginia ABC provides that training free through its VERT program and requires attestation to it on the application.
Tobacco purchase and daily sales records would have to be kept for three years and, notably, kept separate and apart from the business’s other records. Virginia ABC special agents would have access during business hours and at any other time there is an indication of activity on the premises. Certain ownership and management changes would have to be reported within 30 days.
One requirement will catch operators used to dim rooms. The proposed rules would require interior lighting “sufficient to permit ready discernment of the appearance and conduct of patrons in all portions of the establishment.”
Retailers selling vapor products carry an extra exposure. Liquid nicotine and nicotine vapor products have to appear in the Attorney General’s directory, and the proposed rule bars offering an unlisted product for sale, not merely selling one. Virginia ABC warns that civil fines for unlisted products start at $5,000.
What a violation costs
The proposed regulations set out first-offense penalties, with the permittee able to accept a suspension or pay a civil charge instead.
Selling a covered product to someone at least 18 but younger than 21 carries a proposed first-offense penalty of a 25-day suspension or a $2,500 civil charge. Selling or offering a vapor product that is not in the Attorney General’s directory carries the same.
Below that, a 15-day suspension or $1,500 applies to aiding and abetting an underage purchase and to liquid nicotine containers that fail child-resistant packaging standards. A 10-day suspension or $1,000 applies to keeping unauthorized products on the premises, having no designated manager present, inadequate illumination, failing to post the permit, failing to post the designated manager, and failing to post the required under-21 signage.
For a permittee operating more than one establishment, each location counts as a separate permittee for these purposes.
Virginia ABC may waive the penalty or impose probation for certain first-time violations that were not willful and knowing. Operators should not assume a warning comes first.
The proposal sets no second or third offense schedule. Repeat violations go to hearing, where statutory civil penalties run up to $3,000 for a first sale to a prohibited person and $6,000 for a second, and the Authority may require a permittee to pay costs of up to $25,000.
How to comment
Comment on the proposed regulations is open through Oct. 24 at the Virginia Regulatory Town Hall. The agency contact is LaTonya D. Hucks-Watkins, senior legal counsel, at Virginia ABC in Mechanicsville.
There are concrete things to raise. The proposal charges “sale of retail tobacco products in unauthorized place or manner” at 10 days or $1,500, but the chapter defines no place-or-manner rules. A prohibition on anyone younger than 18 selling tobacco appears in the section on waiving penalties but has no matching entry in the penalty schedule. And the absence of any second or third offense schedule leaves repeat enforcement to case-by-case hearings.
For Virginia retailers, the rules governing tobacco sales are about to change substantially, while the Authority is still finishing the framework and working through applications.