DATE: October 13, 2026
TO: Mayor and City Council
FROM: Development Services Director
SUBJECT: Appeals of the Planning Commission’s Revocation of Tobacco Retailer Licenses for Six Commercial Properties Within the City of Hayward Where License Holders Committed Three or More Violations Within a Five-Year Period, Pursuant to Hayward Municipal Code Section 10-1.2794
RECOMMENDATION
Staff recommends that the Council denies the appeals and adopts resolutions (Attachments IIa, III-a, IV-a, V-a, VI-a, and VII-a) upholding the Planning Commission’s revocations of the Tobacco Retailer Licenses for the six appellant commercial establishments based on the analysis set forth in this report and the related attachments.
SUMMARY
On July 1, 2014, the City Council adopted Ordinance 14-161 establishing the Tobacco Retail Sales Establishment provisions of the Hayward Municipal Code (HMC). The Ordinance was amended in 2020 to include a strengthened enforcement framework. 2 Following those
amendments, retailers have received numerous educational and compliance-focused inspections intended to support understanding of applicable requirements and promote voluntary compliance.
Pursuant to HMC Section 10-1.2794,3 the City is required to revoke Tobacco Retailer Licenses where, it is established by a preponderance of the evidence, that a retailer has committed three (3) or more violations of the Tobacco Retail Sales Ordinance4 within a five (5) year period, unless the retailer demonstrates by clear and convincing evidence that a lesser penalty is 1 Ordinance No. 14-16: https://portal.laserfiche.com/Portal/DocView.aspx?id=181158&repo=r-b6d2994c 2 Ordinance No. 20-13: https://portal.laserfiche.com/Portal/DocView.aspx?id=371246&repo=r-b6d2994c 3 HMC Section 10-1.2794, Revocation of Tobacco Retailer Licenses and Conditional Use Permits; Appeals:
https://library.municode.com/ca/hayward/codes/municipal_code?nodeId=HAYWARD_MUNICIPAL_CODE_CH10PL ZOSU_ART1ZOOR_S10-1.2780TORESAES_S10-1.2794RETORELICOUSPEAP 4 HMC Section 10-1.2780, Tobacco Retail Sales Establishments:
https://library.municode.com/ca/hayward/codes/municipal_code?nodeId=HAYWARD_MUNICIPAL_CODE_CH10PL ZOSU_ART1ZOOR_S10-1.2780TORESAES
warranted. On June 115 and June 25, 20266, the Planning Commission found that a total of 10 tobacco retail establishments committed three (3) or more violations in a five (5) year period and revoked their Tobacco Retailer Licenses. Staff recommends the Council review the videos of these hearings.
7 Six of these businesses, listed in Table 1, have appealed the Planning Commission’s decision to revoke their Tobacco Retailer Licenses. Each appellant specified grounds for appeal, which are provided in their entirety as Attachments II-c, III-c, IV-c, V-c, VI-c, and VII-c. Staff does not believe the provided grounds for appeal contradict the evidence that each retailer has committed three or more violations of the Tobacco Retail Sales Ordinance within a five year period, nor do they provide clear and convincing evidence that a penalty less than license revocation is warranted.
Table 1. Business that are Appealing Revocation of their Tobacco Retail Licenses 5 Planning Commission Meeting, June 11, 2026:
https://hayward.legistar.com/LegislationDetail.aspx?ID=8059670&GUID=CB169F02-FBF0-4EAD-B5A8- 037F3C169D3F
6 Planning Commission Meeting, June 25, 2026:
https://hayward.legistar.com/LegislationDetail.aspx?ID=8084947&GUID=5F87C9E3-A85B-49A6-80E3- 23437601E599
7 Videos of Planning Commission Meetings:
• June 11, 2026: https://hayward.granicus.com/player/clip/2437?view_id=1&meta_id=220715&redirect=true • June 25, 2026: https://hayward.granicus.com/player/clip/2450?view_id=1&meta_id=222587&redirect=true Business Name Address # of
Violations
(Failed
Inspections)
# of
Violations
that were
Appealed
Revocation
of License
by Planning
Commission
Related
Attachments
Mt Everest
Smoke Shop
24703
Amador St
4 None June 11,
2026
II-a, II-b,
II-c, II-d
Heart of the Bay
Smoke Shop
22515 Alice
St
4 None June 11,
2026
III-a, III-b,
III-c, III-d
Hiphop Smoke
Shop
24289
Mission Blvd
5 None June 11,
2026
IV-a, IV-b,
IV-c, IV-d
Stop N’ Save
#106
338 W
Tennyson Rd
8 None June 11,
2026
V-a, V-b, V-c,
V-d
Smokey’s
Smoke Shop &
Gifts
25088
Hesperian
Blvd
6 1
Denied
June 25,
2026
VI-a, VI-b,
VI-c, VI-d
The Gr8 Smoke
Shop
1090 La
Playa Rd
4 None June 25,
2026
VII-a, VII-b,
VII-c, VII-d
BACKGROUND
Tobacco Retailer Regulations and Enforcement
The Tobacco Retail Sales Establishment regulations were initially adopted by the City of Hayward through Ordinance No. 14-16 in 2014, codified under HMC Section 10-1.2780 et seq., as part of the City’s effort to regulate the sale of tobacco products, reduce youth access, and establish a comprehensive licensing and enforcement framework for tobacco retailers8. The Ordinance requires all tobacco retail establishments obtain a valid Tobacco Retailer License and comply with applicable federal, state, and local laws governing the sale and distribution of tobacco products.
In 2020, the City Council adopted Ordinance No. 20-13, which amended and strengthened the original regulations in response to increasing public health concerns related to youth access to flavored tobacco products and electronic smoking devices. These amendments expanded prohibited product categories, including flavored tobacco products and vaping-related items, and reinforced enforcement tools, compliance timelines, and inspection authority. A six-month compliance period was provided for existing retailers to remove prohibited products from shelves and bring operations into compliance.
These local regulations operate in conjunction with broader state and federal tobacco control laws. At the state level, California enacted Senate Bill 793 (Proposition 31), which established a statewide prohibition on the retail sale of most flavored tobacco products, including menthol cigarettes, flavored vape products, and other characterizing flavored tobacco items, subject to limited exemptions. The law reflects California Health and Safety Code Section 104559.5 and is intended to reduce youth initiation and overall tobacco use. Federal requirements also apply to all retailers and operate in conjunction with state and local regulations.
The City’s Tobacco Retailer License program is designed to ensure compliance with this layered regulatory framework by requiring adherence to all applicable federal, state, and local laws. As such, Hayward’s Ordinance is structured to align with and reinforce state and federal tobacco control objectives, including the statewide flavored tobacco restrictions, while also allowing the City to impose additional local enforcement standards where authorized.
Since the implementation of the City’s strengthened enforcement framework in 2020, retailers have received numerous educational and compliance-focused inspections intended to support understanding of applicable requirements and promote voluntary compliance. Each tobacco retail establishment is inspected to verify compliance with the Tobacco Retail Sales Establishment provisions. If the tobacco retail establishment is found in violation, the City sends the property owner a Notice of Violation and assesses penalties as established by the Master Fee Schedule. Each property owner has the right to appeal any Notice of Violation.
Despite these ongoing outreach efforts, regular inspections, and provision of written Notices of 8 Hayward Municipal Code Section 10-1.2780, Tobacco Retail Establishments. https://library.municode.com/ca/hayward/codes/municipal_code?nodeId=HAYWARD_MUNICIPAL_CODE_CH10PL ZOSU_ART1ZOOR_S10-1.2780TORESAES
Violation, multiple establishments have continued to demonstrate non-compliance with local and state tobacco regulations, as documented in the attached evidence (Attachments II-b, III-b, IV-b, V-b, VI-b, and VII-b).
In 2025, the City applied for and received a 2025 Department of Justice (DOJ) Tobacco Grant to strengthen enforcement efforts. As a result, the City enforcement efforts were centralized under one Code Enforcement Inspector which has resulted in better program oversight and coordination with state and federal tobacco enforcement agencies improving identification of hidden contraband and acquisition of evidence. These changes have improved Code Enforcement’s ability to monitor, inspect and bring these businesses before the Planning Commission to consider revocation of the Tobacco Retailer License (TRL).
Tobacco Retailer License Revocation Procedures
The following procedures govern the TRL revocation process. Such proceedings are conducted before the City of Hayward Planning Commission pursuant to HMC Section 10-1.2794 and related provisions.
Legal Basis for Revocation. Under HMC Section 10-1.2794, a Tobacco Retailer License is subject to mandatory revocation upon a finding that the retailer has incurred three (3) or more violations of the City's Tobacco Retail Sales Establishment Requirements and Operational Standards set forth in HMC Section 10-1.2783 within any five (5) year period.
Qualifying violations include those listed in HMC Section 10-1.27839, which include, but are not limited to, the following:
• Sale of tobacco products to persons under the age of 21; • Sale or offer for sale of flavored tobacco products;
• Sale of electronic smoking devices;
• Sale of electronic smoking and vaping products including e-liquids, concentrates, etc.; • Sale of CBD, hemp products, and any amount of cannabis; • Failure to maintain required signage, age-verification practices, or product placement standards;
• Sale of imitation tobacco;
• Violation of any local, state, or federal law applicable to tobacco or electronic smoking products and paraphernalia;
• Violation of any local, state, or federal law regulating controlled substances or drug paraphernalia, including California Health and Safety Code Section 11364.7 (Possession for Sale of Drug Paraphernalia);
9 HMC Section 10-1.2783, Requirements and Operational Standards for Tobacco Retail Sales Establishments:
https://library.municode.com/ca/hayward/codes/municipal_code?nodeId=HAYWARD_MUNICIPAL_CODE_CH10PL ZOSU_ART1ZOOR_S10-1.2780TORESAES_S10-1.2783REOPSTTORESAES
• Failure to secure all tobacco products and/or paraphernalia so that only store employees have immediate access to those items; and
• Maintaining self-service displays of tobacco products and electronic smoking devices.
Burden of Proof. Pursuant to HMC Section 10-1.2794(a)10 the initial Burden of Proof rests with the City. The City must establish, by a preponderance of the evidence, that the licensee has committed three (3) or more violations within a five (5) year time period. Under the “preponderance of evidence” standard, the evidence must show that it is more likely than not that each charged violation occurred. In other words, if at the revocation hearing, the Planning Commission determines that there is a 51% probability that the fact or claim occurred, then “preponderance of the evidence,” has been established.
If the Planning Commission finds that it is more likely than not that the retailer has committed three (3) or more violations within a five (5) year period, the Tobacco Retailer License “shall” be revoked, unless the retailer can demonstrate by clear and convincing evidence that a lesser penalty is warranted. Lesser penalties can include, but are not limited to suspension, abatement and/or additional administrative citations/penalty fees. The “clear and convincing” burden of proof is higher than the “preponderance of evidence,” standard, and requires that the party present evidence that leaves the Commission with the firm belief or conviction that it is highly probable that a lesser penalty is warranted.
Appeal Procedure. Under the Hayward Municipal Code, appeals of Planning Commission decisions may be filed by an applicant, any person entitled under the law to receive notice, or any persons who may be reasonably expected to suffer a negative impact from the decision.
Appeals must be in writing and set forth the specific grounds of the appeal and the relief or action sought. Therefore, the City Council’s review is limited to the specific grounds set forth in the appeal.
Filing a timely notice of appeal stays the decision of the Planning Commission. The decision remains stayed until the City Council renders a decision on the appeal. In the case of an appeal of a Planning Commission decision, the City Council may either: 1) deny the appeal and uphold the Planning Commission’s decision, or 2) grant the appeal and reverse the Planning Commission’s decision.
Planning Commission Hearings and Appeals
On June 11, 202611, the Planning Commission revoked six Tobacco Retailer Licenses for Mt Everest Smoke Shop (24703 Amador St), Heart of the Bay Smoke Shop (22515 Alice St), All Star Service Inc. (1220 W Tennyson Rd), Hiphop Smoke Shop (24289 Mission Blvd), Stack City 10 HMC Section 10-1.2794(a):
https://library.municode.com/ca/hayward/codes/municipal_code?nodeId=HAYWARD_MUNICIPAL_CODE_CH10PL ZOSU_ART1ZOOR_S10-1.2780TORESAES_S10-1.2794RETORELICOUSPEAP 11 Planning Commission Meeting, June 11, 2026:
https://hayward.legistar.com/LegislationDetail.aspx?ID=8059670&GUID=CB169F02-FBF0-4EAD-B5A8- 037F3C169D3F
Smoke Shop (25125 Santa Clara St), and Stop N’ Save #106 (338 W Tennyson Rd). On June 25, 202612, the Commission revoked an additional four Tobacco Retailer Licenses for Hayward Food and Gas (391 W A St), Smokey’s Smoke Shop & Gifts (25088 Hesperian Blvd), Master Shell (22810 Foothill Blvd), and The Gr8 Smoke Shop (1090 La Playa Dr). For each establishment, the Commission found that the license holder committed three or more violations within a fiveyear period, which pursuant to Hayward Municipal Code Section 10-1.2794, requires that their license be revoked. The meeting minutes for both meetings are included as Attachment IX and Attachment X. Staff recommends the Council review the videos of these hearings.13 Of the 10 establishments that had their Tobacco Retailer Licenses revoked by the Planning Commission, six have filed appeals. The grounds for these appeals provided by the appellants are summarized in Table 2 in the Staff Analysis section below and are included in their entirety in Attachments II-c, III-c, IV-c, V-c, VI-c and VII-c.
STAFF ANALYSIS
Staff recommends that the Council deny the six appeals and uphold the Planning Commission’s revocations of the Tobacco Retailer Licenses for each of the commercial establishments.
As was presented to the Planning Commission on June 11 and June 25, 2026, each establishment was given multiple opportunities to remedy its violations and achieve compliance with the City's Tobacco Retailer License requirements, yet each persistently failed to do so. The violations extend beyond the unlawful sale of tobacco products and include serious criminal activity such as the sale of illegal drugs. This pattern of conduct has created significant public nuisances, posed risks to community health and safety, and undermined the integrity of the City's regulatory framework — particularly given that many of the implicated regulations are designed to protect minors from harmful products and associated criminal activity. The most frequently observed violations include continued sales and/or possession for sale of flavored tobacco products, electronic smoking devices and vape products in violation of applicable regulations, and deficiencies related to expired, missing, or improperly posted tobacco retail licensing documentation. In several cases, these violations have persisted despite prior warnings, notices, and follow-up inspections intended to achieve compliance.
Since implementation of the City’s strengthened tobacco retail enforcement framework in 2020, businesses have received repeated educational inspections and compliance outreach intended to ensure understanding of both City requirements and applicable state and federal tobacco laws. It is the responsibility of each business owner and operator to actively research, monitor, and remain up to date on all applicable federal, state, and local laws that govern their operations, including, but not limited to, the City’s Tobacco Retail Sales Establishment Ordinance, California tobacco control laws, and federal minimum age restrictions. Ongoing compliance is not passive and requires continued attention to changes 12 Planning Commission Meeting, June 25, 2026:
https://hayward.legistar.com/LegislationDetail.aspx?ID=8084947&GUID=5F87C9E3-A85B-49A6-80E3- 23437601E599
13 Videos of Planning Commission Meetings:
• June 11, 2026: https://hayward.granicus.com/player/clip/2437?view_id=1&meta_id=220715&redirect=true • June 25, 2026: https://hayward.granicus.com/player/clip/2450?view_id=1&meta_id=222587&redirect=true
in law and regulatory requirements. Retailers are provided with access to the City’s Ordinance and related guidance materials and are expected to maintain awareness of updates that may impact their business operations. Operators are also encouraged to contact Code Enforcement staff directly with any compliance questions or requests for clarification to ensure continued adherence to all applicable regulations.
Attachments II-b, III-b, IV-b, V-b, VI-b, and VII-b contain detailed evidence of violations for each of the appellant businesses. Each attachment is organized to provide the following:
1. Summary of Evidence which describes each violation, evidence provided, penalties assessed and due, and staff recommendation
2. Photographic evidence with description
3. Case and Inspection Detail Reports by case number which describes the case activity, detailed descriptions of the violations, photographic evidence associated with the case, and inspection activity and status
4. Violation Notices and Administrative Penalty and Fee Notices that were served on the property owner
5. Hayward Police Department Inventory of Unpermitted or Illegal Items which documents quantities of items found by the Hayward Police Department during recent inspections, if applicable
Collectively, these records demonstrate by preponderance of evidence a pattern of repeated non-compliance to the City’s Tobacco Retailer License program across each establishment.
Further, as summarized in Table 2, staff has reviewed each of the submitted grounds for appeal and does not believe that any sufficiently disprove that three violations of the Tobacco Retail Sales Establishment Ordinance were committed within a five-year period, nor do they provide clear and convincing evidence that a penalty less than revocation is warranted.
Table 2. Summary of Grounds for Appeal and Staff Responses (Detail included in attachments as indicated below)
Business
Name
Address Grounds for Appeal Staff Responses
Mt Everest
Smoke
Shop
24703
Amador St
• Disproportionality of
penalty
• Remediation and good
faith compliance efforts
• Hardship and economic
impact
• Span of violations over
extended period
• Four violations arise from
two code cases
• Penalty is consistent with
Section 10-1.2794 HMC
• Evidenced pattern of noncompliance demonstrates
failure to remediate and
willful non-compliance
• No hardship provisions
exist that justify a lessor
penalty
Business
Name
Address Grounds for Appeal Staff Responses
• Appellant was not
properly served
See Attachment II-c.
• Span is consistent with
Section 10-1.2794 HMC
• Any violation constitutes a
separate offense for each
day that the violation is
committed
• City records demonstrate
the property owner and
business were properly
served
• Suspension not
recommended due to
pattern of noncompliance
• Revocation recommended
See Attachment II-d.
Heart of
the Bay
Smoke
Shop
22515
Alice St
• Shop is the sole source of
income to support family
• Promise to take
responsibility and fix
mistakes
• Others were responsible
for the violations
See Attachment III-c.
• No hardship provisions
exist that justify a lessor
penalty
• Evidenced pattern of noncompliance shows failure
to take responsibility and
fix mistakes
• Proprietor is responsible
for compliance, which
includes actions of others
in the establishment
• Suspension not
recommended due to
pattern of noncompliance
• Revocation recommended
See Attachment III-d.
Hiphop
Smoke
Shop
24289
Mission
Blvd
• Significant investment in
business
• Commitment to
complying with
• No investment or
hardship provisions
related to revocation
Given the documented history of non-compliance, coupled with the insufficient evidence provided in the grounds for appeal, staff recommends that Council deny the appeals and uphold the Planning Commission’s decisions.
Business
Name
Address Grounds for Appeal Staff Responses
regulations moving
forward
• Request to consider a
lesser penalty
See Attachment IV-c.
• Evidenced pattern of noncompliance shows owner’s
willful noncompliance
• Suspension not
recommended due to
pattern of noncompliance
• Revocation recommended
See Attachment IV-d.
Stop N’
Save #106
338 W
Tennyson
Rd
• Proof of payment of
$15,000 toward the
establishment’s
outstanding $20,235.27
business license tax
See Attachment V-c.
• Despite payment,
business owner is still
delinquent on business
license tax and has
demonstrated willful noncompliance with business
license tax
• Proof of payment does not
address the violations
related to sale of
prohibited products
• Revocation recommended
See Attachment V-d.
Smokey’s
Smoke
Shop &
Gifts
25088
Hesperian
Blvd
• Various legal arguments
See Attachment VI-c.
• Responses to legal
arguments
See Attachment VI-d.
The Gr8
Smoke
Shop
1090 La
Playa Rd
• Various legal arguments
See Attachment VII-c.
• Responses to legal
arguments
See Attachment VII-d.
ORDER OF PROCEEDINGS
This item will begin with a brief overview presentation by staff followed by separate hearings for each establishment’s appeal. Each hearing will start with a staff presentation followed by a presentation by the appellant and/or their representatives if they wish to provide one.
Appellant presentations will be limited to a maximum of 10 minutes. Additional members of the public may speak during the public comment period on each item prior to Council deliberation.
NEXT STEPS
The Council’s determination on the appeals are final and cannot be further appealed.
Prepared by: Jesse Prins, Code Enforcement Inspector II
Recommended by: Sara Buizer, AICP, Development Services Director Approved by:
______________________________
Jennifer Ott, City Manager