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HomeMy WebLinkAbout19 - Extending the Temporary Moratorium on New Smoke Shops and Tobacco Retailer BusinessesQ �EwPpRT CITY OF s NEWPORT BEACH `q44:09 City Council Staff Report October 28, 2025 Agenda Item No. 19 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Jaime Murillo, Acting Community Development Director - 949-644- 3209, jmurillo@newportbeachca.gov PREPARED BY: Oscar Orozco, Associate Planner - (949) 644-3219, oorozco@newportbeachca.gov TITLE: Ordinance No. 2025-34: Extending the Temporary Moratorium on New Smoke Shops and Tobacco Retailer Businesses /_1 163I zf_Tel 6 For City Council's consideration is an ordinance extending the current 45-day temporary moratorium established by Ordinance No. 2025-31 on the establishment and operation of new tobacco retailer businesses and the relocation or physical expansion of existing tobacco retailer businesses, also known as smoke shops, by an additional 10 months and 15 days. RECOMMENDATIONS: a) Conduct a public hearing; b) Determine this action is exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to Section 15262, Section 15060(c)(2), Section 15060(c)(3), Section 15305, and Section 15061(b)(3) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3; c) Adopt Ordinance No. 2025-34, An Urgency Ordinance of the City Council of the City of Newport Beach, California, Extending a Temporary Moratorium on the Establishment and Operation of New Tobacco Retailer Businesses and the Relocation or Physical Expansion of Existing Tobacco Retailer Businesses, Also Known as Smoke Shops, and d) Review, approve, and issue the 10-day report as required by Government Code 65858 for the extension of the temporary moratorium. DISCUSSION: On September 9, 2025, Mayor Pro Tern Kleiman requested initiating amendments to Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code (NBMC) related to tobacco retail establishments, tobacco accessories/paraphernalia, smoke shops, smoking lounges and other smoke - related businesses pursuant to City Council Policy A-1. 19-1 Ordinance No. 2025-34: Extending the Temporary Moratorium on New Smoke Shops and Tobacco Retailer Businesses October 28, 2025 Page 2 In addition to the code update, the City Council also directed staff to prepare an urgency ordinance to establish a temporary moratorium on the establishment of new smoke shops pending the outcome of the code amendment review. The City Council voted unanimously (6-0), via a straw poll, in favor of staff returning with an item. On September 23, the City Council voted unanimously to adopt Ordinance No. 2025-31 (Attachment B), imposing a 45-day moratorium on the establishment and operation of new tobacco retailer businesses as well as the relocation or physical expansion of existing tobacco retailer businesses. In addition, the City Council adopted Resolution No. 2025- 64 formally initiating the requested Title 20 and Title 21 amendments. As noted above, the City Council has directed staff to process amendments to the NBMC related to smoke shops. The urgency ordinance prevents the establishment of any new smoke shops (i.e. tobacco retailer businesses) while the amendments are being drafted for the City Council to review. This direction is supported by the evidence of a significant rise in public safety concerns related to the accessibility and use of nitrous oxide and flavored tobacco products among the youth, the significant number of businesses in the City that are currently licensed by the State to sell tobacco, unlawful activity at existing tobacco retailer businesses, the City's concern about this increase, and the harmful effect of nitrous oxide and flavored tobacco products on the residents. Statistics from the Newport Beach Police Department and additional background information on the topic are included in the prior City Council Staff Report (Attachment C). The current 45-day temporary moratorium (Ordinance No. 2025-31) expires on November 7, 2025, unless extended by the City Council. Proposed Moratorium Extension Staff is currently in the process of developing reasonable regulations for tobacco retailers to address community concerns regarding underage access, public notification of new licenses and the proliferation of retailers. These potential regulation changes require additional study and public hearings with the Planning Commission and City Council. These tasks cannot be completed within the initial 45-day temporary moratorium which expires on November 7, 2025. Therefore, the need for the moratorium remains and staff recommends the City Council adopt an ordinance (Attachment A) extending the current moratorium for a period of 10 months and 15 days pursuant to Government Code 65858. This action would extend the expiration date of the temporary moratorium from November 8, 2025, to September 23, 2026. Staff intend to return to City Council with code amendments in early 2026, and the extension would allow staff with sufficient time to process the code amendments. 10-Day Report Pursuant to Government Code Section 65858(d), at least 10 days prior to the expiration of the original 45-day temporary moratorium, the City shall issue a written report (10-day Report) describing the measures taken to alleviate the conditions which led to the 19-2 Ordinance No. 2025-34: Extending the Temporary Moratorium on New Smoke Shops and Tobacco Retailer Businesses October 28, 2025 Page 3 adoption of the moratorium (Ordinance No. 2025-31). For example, staff have initiated review of NBMC regulations of peer cities to identify best practices and develop effective regulations for tobacco retailers and began drafting potential code language and planning hearing dates. Staff has included the required 10-day Report as Exhibit A of Attachment A of this staff report to satisfy the requirements of Government Code Section 65858(d). Approval and issuance of the 10-day Report on October 28, 2025, meets the minimum 10-day requirement prior to November 8, 2025, expiration date of the temporary moratorium in compliance with State Law. FISCAL IMPACT: There is no fiscal impact related to this item. ENVIRONMENTAL REVIEW: The urgency ordinance is not subject to the CEQA pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines; California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. In addition, the ordinance consists of minor alterations in land use limitations and does not result in any changes in land use or density. It is therefore not subject to the California Environmental Quality Act review pursuant to Title 14, Division 6, Chapter 3, Sections 15305 and 15061(b)(3) of the California Code of Regulations. NOTICING: The agenda item has been noticed according to the Brown Act (72 hours in advance of the meeting at which the City Council considers the item). A public notice was also posted in a newspaper of local circulation 10 days prior to the public hearing in compliance with the Government Code Section 65090. ATTACHMENTS: Attachment A — Ordinance No. 2025-34: Extension of Urgency Ordinance for Moratorium Attachment B — Ordinance No. 2025-31 Attachment C — City Council Staff Report dated September 23, 2025 19-3 Attachment A Ordinance No. 2025-34: Extension of Urgency Ordinance for Moratorium 19-4 ORDINANCE NO. 2025- 34 AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, EXTENDING A TEMPORARY MORATORIUM ON THE ESTABLISHMENT AND OPERATION OF NEW TOBACCO RETAILER BUSINESSES AND THE RELOCATION OR PHYSICAL EXPANSION OF EXISTING TOBACCO RETAILER BUSINESSES, ALSO KNOWN AS SMOKE SHOPS WHEREAS, Section 200 of the City Charter, of the City of Newport Beach ("City"), vests the City Council with the authority to make and enforce all laws, rules and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the City Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers, and privileges or procedures granted or prescribed by any law of the State of California; WHEREAS, Government Code Section 65858 provides that to protect against any current and immediate threat to the public health, safety, or welfare, the City Council may adopt as an urgency measure an interim ordinance prohibiting any uses that may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the City is considering or studying or intends to study; WHEREAS, the City Council adopted Urgency Ordinance 2025-31 on September 23, 2025, establishing a 45-day moratorium on the approval of granting of any permit, license, and land use entitlement for any new tobacco retailer business within the City to allow the City time to study viable solutions and municipal code amendments necessary to reasonably regulate tobacco retailers as more fully described in Ordinance No. 2025- 31; WHEREAS, the 45-day moratorium will expire on November 7, 2025; WHEREAS, California Government Code section 65858(a) provides that, after notice pursuant to Government Code section 65090 and a public hearing, the City Council may extend Urgency Ordinance No. 2025-31 for ten months and fifteen days and subsequently extend Urgency Ordinance No. 2025-31 for one year; WHEREAS, due notice for a public hearing requesting this temporary moratorium was given as required by Government Code Section 65090; 19-5 Ordinance No. 2025- Page 2 of 5 WHEREAS, pursuant to Government Code Section 65858(d), the City has taken steps to alleviate the conditions that necessitated the adoption of Ordinance No. 2025-31 and has issued a report describing the steps taken, which is attached as Exhibit "A" and incorporated herein by reference; WHEREAS, pursuant to Government Code Section 65858 and City Charter Sections 412 and 416(d) an extension of an urgency measure requires a vote of at least six (6) City Councilmembers for adoption, and the extension shall be of no further force and effect ten months and fifteen days from the effective date of November 8, 2025; WHEREAS, Government Code Section 65858(c) provides that the legislative body shall only extend any interim ordinance pursuant to this section if the ordinance contains legislative findings that there is a current and immediate threat to the public health, safety, or welfare, and that the approval of additional use permits, variances, building permits, or any other applicable entitlement for use which is required in order to comply with a zoning ordinance would result in that threat to public health, safety, or welfare; and WHEREAS, for reasons set forth above and in Ordinance No. No. 2025-31, which recitals are incorporated herein by reference, this urgency ordinance is declared by the City Council to be necessary, as without this ordinance, the approval of additional licenses, permits, and land use entitlements for any new tobacco retailers or the like would result in a current, immediate, and direct threat to the health, safety, and welfare of the community, and the recitals above and in Ordinance No. 2025-31 taken together constitute the City Council's statements of the reasons constituting such necessity and urgency. NOW, THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: The City Council hereby incorporates the recitals set forth above and in Ordinance No. 2025-31 into this urgency ordinance and finds, determines and declares that this urgency ordinance is adopted pursuant to Government Code Section 65858 and City Charter Section 412. 19-6 Ordinance No. 2025- Page 3 of 5 Section 2: Moratorium Extended. Section 4(A) shall be amended to read as follows: A. In accordance with the authority granted to the City of Newport Beach under Article XI, Sections 5 and 7 of the California Constitution, City Charter Sections 412 and 416(d) and California Government Code Section 65858, Urgency Ordinance No. 2025-31 shall be extended for a period of 10 months and fifteen days commencing November 8, 2025, and expiring on September 23, 2026. During this extended period, the following prohibitions shall apply.. (1) no new tobacco retailer businesses shall be established or operate in the City of Newport Beach; (2) no existing tobacco retailer business shall relocate or expand its business in the City of Newport Beach; and (3) no entitlement for use, including, but not limited to, the issuance of a business license, building permit, conditional use permit, minor use permit or other land use approval, shall be approved or issued by the City of Newport Beach for the establishment or operation of a new tobacco retailer business and/or for the relocation or physical expansion of an existing tobacco retailer business. Additionally, the establishment and operation of a new tobacco retailer business or the relocation, or physical expansion of an existing tobacco retailer business is hereby expressly prohibited in all areas and zoning districts of the City of Newport Beach. All other provisions of Ordinance No. 2025-31 shall remain in full force and effect during the extended term of the moratorium. Section 3: Except as expressly modified in this urgency ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force and effect. Section 4: This urgency ordinance extending Ordinance No. 2025-31 is adopted pursuant to Government Code Section 65858 and City Charter Sections 412 and 416(d) and shall take effect immediately upon its passage by a vote of at least six (6) City Councilmembers. This urgency ordinance shall be in effect from November 8, 2025 for a period of ten (10) months and fifteen (15) days and by operation of law be of no further force and effect after September 23, 2026. However, after proper notice and a public hearing, the City Council may by a four -fifths (4/5) vote extend this urgency ordinance for an additional period of up to one year. Ten days prior to the expiration of this urgency ordinance or any extension, a written report describing the measures taken to alleviate the condition that led to the adoption of this ordinance shall be issued by the City of Newport Beach and shall be available online and at the City Clerk's Office. 19-7 Ordinance No. 2025- Page 4 of 5 Section 5: If any section, subsection, sentence, clause, or phrase of this urgency ordinance is, for any reason, held to be invalid or unconstitutional such decision shall not affect the validity or constitutionality of the remaining portions of this urgency ordinance. The City Council hereby declares that it would have passed this urgency ordinance, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases may be declared invalid or unconstitutional. Section 6: The City Council finds that this urgency ordinance is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines; California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. In addition, the ordinance consists of minor alterations in land use limitations and does not result in any changes in land use or density. It is therefore not subject to the CEQA review pursuant to Title 14, Division 6, Chapter 3, Sections 15305 and 15061(b)(3) of the California Code of Regulations. Section 7: The Mayor shall sign and the City Clerk shall attest to the passage of this urgency ordinance, which shall be effective as of November 8, 2025. The City Clerk shall cause this urgency ordinance, or a summary thereof, to be published pursuant to all applicable laws including Charter Section 414. 19-8 Ordinance No. 2025- Page 5 of 5 This ordinance was introduced and adopted as an urgency measure at a regular meeting of the City Council of the City of Newport Beach, held on the 28th day of October, 2025, by the following vote, to wit: AYES: NAYS: ABSENT: Joe Stapleton, Mayor ATTEST: Lena Shumway, City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aaroh C. Harp, City Attorney Attachments: Exhibit A — City Report Describing Steps Taken to Alleviate Conditions Necessitating Adoption of Ordinance No. 2025-31 19-9 EXHIBIT A 19-10 10-Day Report on the City of Newport Beach's 45-day Urgency Moratorium Ordinance establishing a temporary moratorium on the establishment and operation of new tobacco retailer businesses as well as the relocation or physical expansion of existing tobacco retailer businesses within the City of Newport Beach pending the study and development of reasonable regulations pursuant to Government Code Section 65858(d) BACKGROUND: On September 23, 2025, pursuant to Government Code Sections 65858 and 36937, the City Council adopted Ordinance No. 2025-31, a 45-day urgency moratorium ordinance. Ordinance No. 2025-0031 was adopted in an effort to protect the public health, safety, and welfare by placing a 45-day moratorium on all new tobacco retailers with the City of Newport Beach pending completion of anticipated study and development of reasonable regulations for tobacco retailers. Under Government Code Section 65858(d), at least 10 days prior to the expiration of the 45-day ordinance, the City is to issue a written report describing the measures taken to alleviate the conditions which led to the adoption of the moratorium. Issuance of this report satisfies the requirements of Government Code Section 65858(d). The 45-day moratorium is set to expire on November 7, 2025. Measures taken to alleviate the conditions that led to the adoption of the urgency ordinance: 1. The City has assembled an internal -departmental team that will focus on the enforcement and review of potential new regulations related to tobacco retailers. This team is tasked with ensuring compliance with existing laws and identifying any illegal activities associated with tobacco sales, particularly those involving minors and illegal substances. This team will also review police activity associated with tobacco retailers to identify patterns of crime and develop regulations to better aid the City's enforcement activity. 2. City staff has initiated its review of municipal code regulations of peer cities to identify best practices and develop effective regulations for tobacco retailers. This review is aimed at curbing the sale of tobacco products to minors and preventing the proliferation of illegal substances. 3. The City's legal team, in close consultation with the City's internal -departmental team, is working diligently to draft amendments to the municipal code that will address community concerns, including underage access to tobacco products and the sale of illegal substances. 4. City staff has started developing lists of tobacco retailers in the City and any potential police activity associated with that business. The above reflects actions undertaken during this short period. Conditions continue to exist that make it necessary to extend the interim urgency ordinance currently in effect to provide 19-11 staff with the necessary time to complete their analysis and research, develop appropriate regulations, and ensure the protection of the public health, safety, and welfare. CONTINUED NEED FOR THE MORATORIUM Actions addressing the underlying need for the moratorium are on -going. Specifically, at the direction of Council, staff is studying and will develop reasonable regulations for tobacco retailers, including a potential use permit, to address community concerns regarding underage access, public notification of licenses, and proliferation of retailers. These contemplated regulation changes require potential public outreach, additional study, a public hearing before the Planning Commission, and a second public hearing before the City Council. These tasks cannot be completed within the initial 45-day period which ends on November 7, 2025. Therefore, the need for the moratorium remains and staff recommends the City Council adopt an ordinance extending the current moratorium for a period of 10 months and 15 days. Unless extended by Council, the moratorium would automatically expire on November 7, 2025. Staff intends to return to Council with code amendments in early 2026, and the extension would allow staff with sufficient time to process the code amendments. OPPORTUNITY FOR PUBLIC COMMENT. Members of the public will have the opportunity to comment on the extension of the Urgency Ordinance at the City Council hearing to be held on October 28, 2025. The City will publish notice for this meeting pursuant to Government Code § 65090. 19-12 Attachment B Ordinance No. 2025-31 19-13 ORDINANCE NO.2025-31 AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, ESTABLISHING A TEMPORARY MORATORIUM ON THE ESTABLISHMENT AND OPERATION OF NEW TOBACCO RETAILER BUSINESSES AND THE RELOCATION OR PHYSICAL EXPANSION OF EXISTING TOBACCO RETAILER BUSINESSES, ALSO KNOWN AS SMOKE SHOPS WHEREAS, Section 200 of the City Charter, of the City of Newport Beach ("City"), vests the City Council with the authority to make and enforce all laws, rules and regulations with respect to municipal affairs subject only to the restrictions and limitations contained in the City Charter and the State Constitution, and the power to exercise, or act pursuant to any and all rights, powers, and privileges or procedures granted or prescribed by any law of the State of California; WHEREAS, pursuant to Government Code Section 65858, the City Council may adopt an interim urgency ordinance prohibiting any use that may be in conflict with a contemplated general plan, specific plan, or zoning proposal that the legislative body, planning commission or the planning department is considering or studying or intends to study within a reasonable time, if the members of the City Council by a. vote of four -fifths (4/5) majority find that there is a current and immediate threat to the public safety, health, and welfare of the community; WHEREAS, City Charter Section 412 provides for the adoption of an urgency ordinance as an emergency measure to preserve the public peace, health or safety by an affirmative vote of at least five City Council members; WHEREAS, City Charter Section 416(d) allows an urgency ordinance to take effect immediately; WHEREAS, tobacco retailer businesses, also known as smoke shops, have been a source of unlawful activities in the City, which, if not curtailed, present an immediate threat to the public health, safety, and welfare; WHEREAS, the Newport Beach Police Department ("NBPD") served warrants at local tobacco retailer businesses and found evidence of ongoing illegal drug sales to adults and minors; i;it� of Newpoft Bea(. 19_14 Ordinance No. 2025-31 Page 2 of 7 WHEREAS, on May 15, 2024, NBPD detectives arrested a store clerk at Plugged N Smoke & Sneakers, located at 3555 East Coast Highway in Corona Del Mar, following a lengthy investigation that uncovered ongoing sales of illegal marijuana, controlled substances, and prohibited tobacco products to both minors and adults; WHEREAS, on June 10, 2025, NBPD detectives served a search warrant at Tobacco and Accessories, located at 3617 East Coast Highway in Corona Del Mar, seizing over454 pounds of illegal cannabis, psilocybin (magic mushrooms), nitrous oxide, and prohibited tobacco products; WHEREAS, these two cases are part of a troubling trend that endangers the well- being of the City's residents, especially minors, highlighting the urgent need for swift and decisive action, as demonstrated by aggressive enforcement and stricter regulations recently adopted by neighboring cities like Anaheim, Orange, La Habra, and Redondo Beach; and WHEREAS, the purpose of this urgency ordinance is to prohibit the establishment and operation of a new tobacco retailer businesses as well as the relocation or physical expansion of existing tobacco retailer businesses for 45 days, to give the City the opportunity to explore effective regulatory options that ensure the immediate protection of the public health, safety, and welfare. NOW, THEREFORE, the City Council of the City of Newport Beach ordains as follows: Section 1: The City Council hereby incorporates the recitals set forth above into this urgency ordinance and finds, determines and declares that this urgency ordinance adopted pursuant to Government Code Section 65858 and City Charter Section 412 , is necessary because: A. Tobacco retailer businesses pose an immediate threat to the public health, safety, and welfare. B. The establishment and operation of new tobacco retailer businesses as well as the relocation or physical expansion of existing tobacco retailers under current City regulations, would further jeopardize the public health, safety, and welfare. C. The adoption of this urgency ordinance is essential to provide the City the time needed to study and evaluate various regulatory options to more �itv of Newpoft Bear_._ 19_15 Ordinance No. 2025-31 Page 3 of 7 effectively manage tobacco retailer businesses and ensure the immediate protection of the public health, safety, and welfare. Section 2: In the interest of safeguarding the health, safety, and welfare of the residents of and visitors to the City of Newport Beach, the purpose and intent of this urgency ordinance is to impose a temporary moratorium on the establishment and operation of new tobacco retailer businesses as well as the relocation or physical expansion of existing tobacco retailers including, but not limited to, the issuance of any new permits, licenses, or other entitlements for tobacco retailer businesses, commonly known as smoke shops, within the jurisdictional boundaries of the City of Newport Beach. Pursuant to Government Code Section 65858 and Charter Section 412, the City Council is authorized to adopt this urgency ordinance without following the standard procedures required for ordinance adoption, to protect public health, safety, and welfare. This ordinance is being adopted to protect the public health, safety and welfare by prohibiting uses that conflict with a contemplated general plan, specific plan, or zoning proposal that the City Council, Planning Commission, or Community Development Department is currently considering, studying, or intends to study within a reasonable timeframe. Section 3: For purposes of this urgency ordinance, the following definitions shall apply: A. "Person" means and includes any individual, partnership, cooperative association, private corporation, personal representative, receiver, trustee, assignee, or other legal entity. B. "Premium cigar" means any cigar that is handmade, or hand rolled, is not mass produced by use of mechanization, has a wrapper, which is made entirely from whole tobacco leaf, and has a wholesale price of no less than twelve dollars ($12). A premium cigar does not have a filter, tip, or nontobacco mouthpiece and is capped by hand. C. "Tobacco paraphernalia" means any item designed or marketed for the consumption, use, or preparation of a tobacco product. D. "Tobacco product" means: (1) any product containing, made, or derived from tobacco or nicotine that is intended for human consumption, whether smoked, heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed, aerosolized, vaporized, or ingested by any other means, including, but not Citv of Now port Bea(,.- 19-16 Ordinance No. 2025-31 Page 4 of 7 limited to, cigarettes, cigars, little cigars, chewing tobacco, pipe tobacco, bidis, kreteks, snuff, e-liquids, or vape juice; and (2) any device or component, part, or accessory that delivers nicotine alone or combined with other substances to the person using the device, including, but not limited, to an electronic cigarette (or "e-cigarette"), electronic cigar (or "e-cigar"'), electronic pipe (or "e-pipe"), vape pen, electronic hookah (or "e-hookah"), cigars, or pipes, whether or not the device or component is sold separately. "Tobacco product" does not include any product that has been approved by the United States Food and Drug Administration for use as a tobacco cessation product where such product is marketed and sold solely for such an approved purpose nor does it include loose-leaf tobacco and premium cigars. E. "Tobacco retailer business" means any person who sells, offers for sale, distributes, furnishes, or otherwise exchanges, with or without compensation, a tobacco product, tobacco paraphernalia, or tobacco - related item, to a consumer or end user, whether conducted in a physical storefront, through mobile or temporary setups, or via online or delivery - based platforms operating within the City of Newport Beach. Section 4: Moratorium Imposed. A. In accordance with the authority granted to the City of Newport Beach under Article XI, Sections 5 and 7 of the California Constitution, City Charter Sections 412 and 416(d) and California Government Code Section 65858, from and after the effective date of this urgency ordinance, and for a period of 45 days: (1) no new tobacco retailer businesses shall be established or operate in the City of Newport Beach; (2) no existing tobacco retailer business shall relocate or expand its business in the City of Newport Beach; and (3) no entitlement for use, including, but not limited to, the issuance of a business license, building permit, conditional use permit, minor use permit or other land use approval, shall be approved or issued by the City of Newport Beach for the establishment or operation of a new tobacco retailer business and/or for the relocation or physical expansion of an existing tobacco retailer business. Additionally, the establishment and operation of a new tobacco retailer business or the relocation, or physical expansion of an existing tobacco retailer business is hereby expressly prohibited in all areas and zoning districts of the City of Newport Beach. ('-,it,v of Newport Bear 19_17 Ordinance No. 2025-31 Page 5 of 7 B. This urgency ordinance shall not prohibit the renewal of a business license for an existing tobacco retailer business, provided that the renewal seeks to maintain the business without physical expansion at its current location, and the tobacco retailer business is operating in a manner, and housed within a building, which complies with all City, State, Federal, or otherwise applicable, codes, rules, regulations, or laws. C. The provisions of this urgency ordinance shall be enforceable pursuant to the general enforcement provisions in Title 1 of the Newport Beach Municipal Code. Nothing herein shall limit the authority of the City to revoke or suspend any existing license, permit, and/or entitlement as authorized under existing law. Section 5: A code amendment to Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code is initiated by Resolution No. 2025- . The Community Development Department and Planning Commission are hereby directed to analyze the desirability/appropriateness of smoke shops within the City of Newport Beach including, but not limited to, the potential direct and indirect impact of tobacco retail businesses, and if such facilities be thought appropriate, the extent of any zoning and regulatory controls necessary to protect the public health, safety, and welfare. Section 6: Except as expressly modified in this urgency ordinance, all other sections, subsections, terms, clauses and phrases set forth in the Newport Beach Municipal Code shall remain unchanged and shall be in full force and effect. Section 7: This urgency ordinance is adopted pursuant to Government Code Section 65858 and City Charter Sections 412 and 416(d) and shall take effect immediately upon its passage by a vote of at least six (6) City Councilmembers. This urgency ordinance shall by operation of law be of no further force and effect 45 days from September 23, 2025; provided, however, that after proper notice and a public hearing, the City Council may by a four -fifths (4/5) vote extend this urgency ordinance for an additional period of time of up to 10 months, 15 days, and subsequently extend the urgency ordinance for one year. Ten days prior to the expiration of this urgency ordinance, a written report describing the measures taken to alleviate the condition that led to the adoption of this ordinance shall be issued by the City of Newport Beach and shall be available online and at the City Clerk's Office. Section 8: If any section, subsection, sentence, clause, or phrase of this urgency ordinance is, for any reason, held to be invalid or unconstitutional such decision shall not affect the validity or constitutionality of the remaining portions of this urgency C;itv of Newport Bear 19-18 Ordinance No. 2025-31 Page 6 of 7 ordinance. The City Council hereby declares that it would have passed this urgency ordinance, and each section, subsection, clause or phrase hereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases may be declared invalid or unconstitutional. Section 9: The City Council finds that this urgency ordinance is not subject to the California Environmental Quality Act ("CEQA") pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines; California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. In addition, the ordinance consists of minor alterations in land use limitations and does not result in any changes in land use or density. It is therefore not subject to the CEQA review pursuant to Title 14, Division 6, Chapter 3, Sections 15305 and 15061(b)(3) of the California Code of Regulations. City of Newport Beach ,,,, Ordinance No. 2025-31 Page 7 of 7 Section 10: The Mayor shall sign and the City Clerk shall attest to the passage of this urgency ordinance, which shall be effective as of September 23, 2025. The City Clerk shall cause this urgency ordinance, or a summary thereof, to be published pursuant to all applicable laws including Charter Section 414. This ordinance was introduced and adopted as an urgency measure at a regular meeting of the City Council of the City of Newport Beach, held on the 23rd day of September, 2025, by the following vote, to wit: AYES: Mayor Stapleton Mayor Pro Tem Kleiman, Councilmember Barto, Councilmember Blom Councilmember Grant, Councilmember Weber. Councilmember Weiaand NAYS: None ATTEST: 0.� vP -FV1- M Ily Perry, Interim City Clerk APPROVED AS TO FORM: CITY ATTORNEY'S OFFICE Aar n t. Harp, City Attorney City of Newport Beach ,,,o STATE OF CALIFORNIA COUNTY OF ORANGE ; ss. CITY OF NEWPORT BEACH I, Molly Perry, Interim City Clerk of the City of Newport Beach, California, do hereby certify that the whole number of members of the City Council is seven; that the foregoing ordinance, being Ordinance No. 2025-31 was duly introduced on the 9th day of September, 2025, at a regular meeting, and adopted by the City Council at a regular meeting duly held on the 23rd day of September, 2025, and that the same was so passed and adopted by the following vote, to wit: AYES: Mayor Joe Stapleton, Mayor Pro Tern Lauren Kleiman, Councilmember Michelle Barto, Councilmember Noah Blom, Councilmember Robyn Grant, Councilmember Sara J. Weber, Councilmember Erik Weigand NAYS: None IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the official seal of said City this 24th day of September 2025. Fe. Moily Verry, MPA, CIVIC Interim City Clerk City of Newport Beach, California � SEW P R O 6� .. CERTIFICATE OF PUBLICATION STATE OF CALIFORNIA } Ilk, gc�FonH�". COUNTY OF ORANGE } ss. CITY OF NEWPORT BEACH } I, Molly Perry, Interim City Clerk of the City of Newport Beach, California, do hereby certify that Ordinance No. 2025-31 has been duly and regularly published according to law and the order of the City Council of said City and that same was so published in the Daily Pilot, a newspaper of general circulation on the following dates: Introduced Ordinance: August 30, 2025 Adopted Ordinance: October 4, 2025 In witness whereof, I have hereunto subscribed my name thi5� day of 0444"'44"'-U025. .a,,QA � Molly Perry, M , CMC Interim City Clerk City of Newport Beach, California �:itu of Newport Bead 19-21 Attachment C City Council Staff Report dated September 23, 2025 19-22 CITY OF September 23, 2025 Agenda Item No. 23 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: Jaime Murillo, Acting Community Development Director - 949-644- 3209, jmurillo@newportbeachca.gov PREPARED BY: Oscar Orozco, Associate Planner - (949) 644-3219, oorozco@newportbeachca.gov TITLE: Initiation of Zoning Code and Local Coastal Program Amendments Related to Smoke Shops, Smoking Lounges, and Other Tobacco - Related Businesses and Establishing a Temporary Moratorium of Tobacco Retailer Businesses ABSTRACT - For City Council's consideration is an initiation of amendments to Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code (NBMC). The amendments relate to tobacco retail establishments, tobacco accessories, smoke shops, smoking lounges and other tobacco -related businesses. In addition, the City Council will consider a 45-day temporary moratorium on the establishment and operation of new tobacco retailer businesses and the relocation or physical expansion of existing tobacco retailer businesses, also known as smoke shops. RECOMMENDATIONS: a) Determine this action is exempt from environmental review under the California Environmental Quality Act (CEQA) pursuant to Section 15262, Section 15060(c)(2), Section 15060(c)(3), Section 15305, and Section 15061(b)(3) of the CEQA Guidelines, California Code of Regulations, Title 14, Division 6, Chapter 3; b) Adopt Ordinance No. 2025-31, An Urgency Ordinance of the City Council of the City of Newport Beach, California, Establishing a Temporary Moratorium on the Establishment and Operation of New Tobacco Retailer Businesses and the Relocation or Physical Expansion of Existing Tobacco Retailer Businesses, Also Known as Smoke Shops; and c) Adopt Resolution No. 2025-64, A Resolution of the City Council of the City of Newport Beach, California, Initiating Amendments to Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan) of the Newport Beach Municipal Code Pertaining to Smoke Shops, Smoking Lounges, and Other Tobacco -Related Businesses (PA2025-0171). 19-23 23-1 Initiation of Zoning Code and Local Coastal Program Amendments Related to Smoke Shops, Smoking Lounges, and Other Tobacco -Related Businesses and Establishing a Temporary Moratorium of Tobacco Retailer Businesses September 23, 2025 Page 2 DISCUSSION: Background Nitrous Oxide and Flavored Tobacco In recent years, Newport Beach has experienced a significant rise in public safety concerns related to the accessibility and use of nitrous oxide and flavored tobacco products among the youth. Arrests involving nitrous oxide have surged by 720% from just five arrests in 2020 to 41 in 2024. Current trends in 2025 suggest this number may climb to approximately 50 arrests by year-end, marking another 20% increase over the previous year. The Newport Beach Police Department (NBPD) has identified nitrous oxide being sold in local smoke shops and illegal dispensaries, contributing to its widespread availability. This accessibility poses a growing risk to the health and safety of young residents and underscores the need for stronger regulatory oversight. Additionally, flavored tobacco products remain a major driver of youth vaping. According to the Centers for Disease Control and Prevention (CDC), 87.6% of U.S. students who vaped in 2024 used flavored products. In California, 85.6% of high school tobacco users reported using flavored varieties. These statistics highlight the disproportionate appeal of flavored tobacco to minors. Over the past two years, NBPD has received approximately 15 complaints from parents and community members regarding smoke shops, further emphasizing community concern. Illegal Activity at Local Tobacco Retailers According to State records, as of September 5, 2025, there are 41 locations within the City of Newport Beach that are licensed by the State of California for the retail sale of tobacco. Retailers range from large grocery stores to gas stations and convenience markets to retailers that appear to primarily sell tobacco. Tobacco retailer businesses have been a source of unlawful activity in the City. The City has served warrants at local tobacco retailer businesses and found evidence of ongoing illegal drug sales to adults and minors. Specifically, on May 15, 2024, the NBPD detectives arrested an employee at Plugged N Smoke & Sneakers, located at 3555 East Coast Highway in Corona Del Mar, following a lengthy investigation that uncovered ongoing sales of illegal marijuana, controlled substances, and prohibited tobacco products to both minors and adults. Additionally, on June 10, 2025, NBPD detectives served a search warrant at Tobacco and Accessories, located at 3617 East Coast Highway in Corona Del Mar, seizing over 454 pounds of illegal cannabis, psilocybin (magic mushrooms), nitrous oxide, and prohibited tobacco products. These two cases are part of a troubling trend that endangers the well-being of the City's residents, especially minors, highlighting the urgent need for swift and decisive action, as 19-24 23-2 Initiation of Zoning Code and Local Coastal Program Amendments Related to Smoke Shops, Smoking Lounges, and Other Tobacco -Related Businesses and Establishing a Temporary Moratorium of Tobacco Retailer Businesses September 23, 2025 Page 3 demonstrated by aggressive enforcement and stricter regulations recently adopted in neighboring cities like Anaheim, Orange, La Habra, and Redondo Beach. Initiation of Zoning Code and Local Coastal Program Amendments On September 9, 2025, Mayor Pro Tern Kleiman requested initiating zoning code and local coastal program amendments related to tobacco retail establishments, tobacco accessories/paraphernalia, smoke shops, smoking lounges and other smoke -related businesses pursuant to City Council Policy A-1. In addition to the code update, the request also directed staff to prepare an Urgency Ordinance to establish a temporary moratorium on the establishments of new Smoke Shops pending the outcome of the code amendment review. The City Council voted unanimously (6-0), via a straw poll, in favor of staff returning with an item. This agenda item is not a public hearing. If the City Council adopts the attached resolution to initiate the zoning code and local coastal program amendments, specific text changes will be drafted and considered by both the Planning Commission and the City Council at future public hearings. Additionally, amendments to the certified LCP will require certification by the California Coastal Commission to be effective. Zoning Code Section 20.66.020 (Initiation of Amendment) provides that a code amendment may be initiated by the City Council with or without a recommendation from the Planning Commission. City Council Policy K-1 (General Plan and Local Coastal Program) provides that a City -sponsored amendment to the certified Local Coastal Program (LCP) shall be initiated by the City Council. Focus of Amendments Proposed for Initiation The sale of tobacco is currently defined as a "Retail Sales" land use in the NBMC. The retail sales land use is permitted by right in most zoning districts with a few exceptions. The NBMC does not include specific standards for retail sales of tobacco or tobacco related products. Additionally, Title 20 (Planning and Zoning) and Title 21 (Local Coastal Program Implementation Plan) do not provide a definition for "Tobacco Retail Sales", "Tobacco Retailer Business", or "Smoke Shops", nor do they include a land use category with objective land use regulations, such as limits on hours of operations, appropriate zoning districts, and/or separation requirements. Therefore, despite the aforementioned public safety implications, Tobacco Retailer Businesses and Smoke Shops are regulated no differently than a typical retail store. Title 20 and 21 include a definition and a land use classification for "Smoking Lounge," which is defined as "an establishment that is dedicated, in whole or part, to providing tobacco or other substances for smoking by patrons on the premises for a fee, including but not limited to establishments known as cigar lounges, hookah lounges, tobacco clubs, or tobacco bars. It does not include a "retail or wholesale tobacco shop," which sells tobacco products and smoking accessories, but does not provide for on -premises use of 19-25 23-3 Initiation of Zoning Code and Local Coastal Program Amendments Related to Smoke Shops, Smoking Lounges, and Other Tobacco -Related Businesses and Establishing a Temporary Moratorium of Tobacco Retailer Businesses September 23, 2025 Page 4 tobacco products." The smoking lounge land use classification is prohibited in all zoning districts. Therefore, as part of the amendments staff will study potential changes to Title 20 and 21 related to the regulations of smoking lounges and of the sale of tobacco and tobacco - related products in the City. NAnrafnrh im The attached Urgency Ordinance (Attachment A) would establish a 45-day temporary moratorium on new tobacco retailer businesses, which are defined in the ordinance as: "any person who sells, offers for sale, or does or offers to exchange for any form of consideration tobacco products or tobacco paraphernalia without regard to the quantity sold, offered for sale, exchange, or offered for exchange." City Charter Section 412 provides for the adoption of an urgency ordinance as an emergency measure to preserve the public peace, health or safety by an affirmative vote of at least five City Council members. Additionally, pursuant to Government Code Section 65858, and in order to protect public safety, health, and welfare, the City Council may adopt an Urgency Ordinance prohibiting any uses that may be in conflict with a contemplated zoning proposal that the legislative body, Planning Commission or the Community Development Department is considering or studying or intends to study within a reasonable time. Approval of an Urgency Ordinance requires a minimum of a four -fifths vote of the legislative body for adoption and is effective immediately for 45 days from its date of adoption. After notice, pursuant to Section 65090, and a public hearing, the legislative body may, at a future date, extend the Urgency Ordinance for 10 months and 15 days, and subsequently extend the Urgency Ordinance for one year. These additional extensions will also require a minimum of a four -fifths vote for adoption. No more than two extensions may be adopted by the legislative body. As noted above, the City Council has directed staff to initiate amendments to the NBMC related to Smoke Shops and an Urgency Ordinance would prevent the establishment of any new Smoke Shops (i.e. tobacco retailer businesses) while the amendments are being drafted for Council review and action. This direction is supported by the evidence of a significant rise in public safety concerns related to the accessibility and use of nitrous oxide and flavored tobacco products among the youth, the significant number of businesses in the City that are currently licensed by the State to sell tobacco, unlawful activity at existing tobacco retailer businesses, and the City Council's concern about this increase and the harmful effect of nitrous oxide and flavored tobacco products on the residents. As previously described, the City has no regulations specific to retailers whose principal or core business involves selling tobacco products and related paraphernalia, that would 19-26 23-4 Initiation of Zoning Code and Local Coastal Program Amendments Related to Smoke Shops, Smoking Lounges, and Other Tobacco -Related Businesses and Establishing a Temporary Moratorium of Tobacco Retailer Businesses September 23, 2025 Page 5 protect minors such as distance requirements from schools, parks, and other youth - oriented areas. In order to provide staff with the time to study options for the regulation of smoke shops, smoking lounges, and other tobacco -related businesses, staff is recommending approval of the subject urgency ordinance. FISCAL IMPACT: There is no fiscal impact related to this item. ENVIRONMENTAL REVIEW: The initiation of zoning and LCP amendments are exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15262 (Feasibility and Planning Studies) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential to have a significant effect on the environment. No final action on any amendments will occur at this meeting and the initiation of the amendment does not have any legally binding effect upon future consideration of the amendments themselves. The City will conduct an environmental review prior to the consideration of approval of the amendments. Additionally, the urgency ordinance is not subject to the CEQA pursuant to Sections 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines; California Code of Regulations, Title 14, Division 6, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. In addition, the ordinance consists of minor alterations in land use limitations and does not result in any changes in land use or density. It is therefore not subject to the California Environmental Quality Act review pursuant to Title 14, Division 6, Chapter 3, Sections 15305 and 15061(b)(3) of the California Code of Regulations. NOTICING: The NBMC does not require notice for the initiation of amendments. Notice of this item appeared on the agenda for this meeting, which was posted at City Hall and on the City website. Should the City Council initiate the amendment, public notice will be provided for subsequent public hearings before the Planning Commission and the City Council as required by the NBMC. Additionally, notice of the LCP amendments will be sent to all persons and agencies on the Notice of the Availability mailing list. ATTACHMENTS: Attachment A — Ordinance No. 2025-31 Urgency Ordinance for Moratorium Attachment B — Resolution No. 2025-64 Initiation of Amendments 19-27 23-5