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How To Get a Tobacco License (Costs and Criteria)

Launching a tobacco store can be an exciting venture, but there are essential steps you need to take to ensure that your business is legal and compliant.

Imagine opening your tobacco store only to discover you didn't follow the proper procedure to obtain a tobacco license. You could find yourself facing significant fines and having to shut down your business. 

In this article, we'll guide you through getting a tobacco license. We'll cover the costs and criteria you must meet to get started. By the end of this post, you'll be equipped with the knowledge you need to ensure that your tobacco store is legally compliant and ready for a successful launch.


How To Get a Tobacco License

Obtaining your tobacco license varies from state to state, depending on local and state laws. But there are standard procedures and requirements businesses must satisfy across the board. You’ll need to research the laws in your location, and you can usually find this information on your state or local government website.

There are specific requirements you must meet. Most jurisdictions will carry our background checks to ensure you haven’t been involved in illegal activities, especially related to tobacco and other controlled substances. You’ll also need a robust system to verify your customers' ages to prevent sales to underage individuals.

Related Read: How To Open a Tobacco Shop in 7 Steps

Before you begin, make sure you have the necessary documents ready to ensure a smooth application process. Due to its complexity, seeking legal counsel before applying for a tobacco license is wise. An attorney familiar with tobacco laws in your state can guide you and help you avoid potential pitfalls.

Lastly, finding a point of sale (POS) system is critical for businesses selling age-restricted products like tobacco. It should include features such as age verification, which can automatically scan IDs to confirm a customer's age. To simplify recordkeeping and reordering, it should also track inventory and sales.

Also, some POS systems can generate reports for audits and inspections. In the tobacco industry, compliance is critical, and tobacco store POS systems can help make your job easier.
Tobacco POS Buyers' Guide


Costs of Getting a Tobacco License

The cost of obtaining a tobacco license varies. Many factors can affect these costs, but the primary expenses are usually the application, background check, and compliance fees.

Application Fees and Other Expenses

The application fee is one of the primary costs of obtaining a tobacco license. Fees are inconsistent across states; each state sets its fee based on its specific regulations. The fee can range from $25 to $300, or even more. As part of the application fee, many states also require retailers to pay for a background check, which verifies that they do not have a criminal record.

Ensuring compliance with tobacco laws incurs additional costs. For example, investing in systems that verify customer age is necessary for retailers to prevent sales to minors. Be sure to factor in ongoing costs such as maintaining the license, license renewal fees, and potential fines for non-compliance.

Variation in Costs by State and License Type

Costs vary greatly depending on the state and the type of license you need. Some states have higher application fees than others, and certain types of licenses (such as those for manufacturing or wholesaling) may have different fee structures than those for retail sales.

Certain activities, such as manufacturing, importing, or exporting tobacco products, may also require federal licenses, which have different costs than those issued by state or local governments.

Costs of NOT Getting a Tobacco License

If you’re reading this article, you’re on the right path to obtaining a license. But it’s worth looking at the consequences of not getting a tobacco license. It will cost you more than just money!

    • Fines that will burn a hole in your pocket: They’re not just slap-on-the-wrist fines; they can range from hundreds to thousands of dollars.
  • Legal action: More than just a day in court, you could face civil penalties and even criminal charges.
  • Business closure: Authorities will shut down your business faster than you can say “no license.” You’ll lose your revenue and income and damage your reputation. Would you be able to build trust with your customers again?
  • Future problems: Once authorities have you on their radar, it’s challenging to recover. A history of flouting the rules will make the process of obtaining a license in the future more difficult and potentially expensive.

In short, it’s not worth it trying to cut costs. Do things right from the beginning and build a solid legal foundation to help your business thrive.

Related Read: How Profitable Is a Smoke Shop?

Criteria for Getting a Tobacco License

Again, although rules and regulations vary from state to state, there are common hoops you’ll likely need to jump through regardless of your location.

  • Register your business: Before starting the application process, you’ll need to register your business. Provide the relevant details about your business, such as its name, location, and ownership information.
  • Pass the background check: Convictions for certain crimes might disqualify you from obtaining a license. Again, speak to an attorney familiar with tobacco laws in your state to help with this process.
  • Comply with regulations: There are various regulations related to the sale of tobacco products, including packaging and labeling requirements, restrictions on advertising and promotion, and limitations on the types of products you can sell.
  • Training and education: Some states require you or your employees to complete a training or education program. Participating in these programs ensures you understand the legal and health ramifications of selling tobacco.

Each state might have additional requirements, so ensure you do your research before applying for a permit.

Obtain Your Tobacco License in 6 Steps

Obtaining a tobacco license depends on the state and locality where you plan to operate your tobacco business. In general, you can expect to take the following steps:

  1. Determine the type of tobacco license you need: There are different types of licenses, such as a retail tobacco license, a wholesale tobacco license, or a distributor's tobacco license. You can refer to the CDC STATE System Licensure Fact Sheet to see if your state requires you to obtain a license before selling tobacco.
  2. Research the requirements: Check with your state's Department of Revenue or local licensing agency to determine the requirements for obtaining a tobacco license. This may include background checks, fingerprinting, and age verification.
  3. Gather necessary documents: You'll need to gather documents such as your business license, tax identification number, and any required permits or certificates.
  4. Submit your application: Once you have all the necessary documents and information, you can submit your tobacco license application. You may need to pay a fee.
  5. Wait for approval: The licensing agency will review your application and may request additional information or clarification. Once your application is approved, you'll receive your tobacco license.
  6. Renew your license: To keep your tobacco license current, you may need to renew it annually or biannually.

Get Your Tobacco License and Launch Successfully

As with any business venture, you need to get your ducks in a row before you begin. 

Securing a tobacco license is imperative. Meeting the requirements set by your state or locality ensures that you operate your business within the confines of the law and protects you from fines, penalties, legal action, or even business closure.

Follow these steps: Determine the type of license you need, research the requirements, gather the required documents, submit your application, wait patiently for approval, and renew your license regularly.

Once you have your license, it's time to get your business up and running. That's where we come in. The Cigars POS team has developed a unique point of sale system designed specifically for tobacco stores. Our features include inventory management, sales tracking, customer loyalty programs, and more to help you run your business effectively.

You don't have to take our word for it — see for yourself. Get a free demo of our POS hardware and software to see how it can streamline your tobacco business operations. Let's light up the path to success!

Spence Hoffman
Spence Hoffman Spence Hoffman has 15 years of experience in the point of sale industry. Currently, he serves as the VP of Product at POS Nation. He holds an MBA from Appalachian State University and has three children. Outside of work, Spence is passionate about playing the guitar and enjoys traveling with his family.

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