As Fresno City Council will consider an ordinance Thursday potentially closing down about 70 smoke shops, a coalition of business owners has retained an attorney who says the city’s proposed action verges on eminent domain.

The ordinance from councilmembers Miguel Arias, Annalisa Perea, and Nelson Esparza would force future and existing smoke shop owners to apply for conditional use permits. The ordinance only allows seven per district, and it doesn’t allow smoke shops to be within 1,000 feet of a school or other sensitive sites.

Fresno Planning Commissioners at their meeting Feb. 19 recommended increasing the number of permits, grandfathering in businesses near schools, extending how long businesses have to clear out inventory if not approved, and making approval for permits based off of merit rather than a lottery.

If Law Is Adopted, 70 Smoke Shops Will Close

Councilmembers say smoke shop owners bring blight to the area. Code enforcers and police have found marijuana, guns, and illegal gambling at some locations during inspections. City Attorney Andrew Janz said all businesses they inspected had code violations. Only businesses without significant violations would be eligible for approval.

But with only 49 available permits, about 70 businesses of the estimated 119 licensed businesses would close, according to a letter from attorney Todd Wynkoop with McCormick Barstow.

Wynkoop’s letter says the city’s smoke shop ordinance unfairly targets business owners who may have done nothing wrong. And though councilmembers say the ordinance is for public safety, business owners get no hearing. The ordinance doesn’t regulate grocery stores or convenience stores that also sell tobacco.

“The proposed amendment deprives at least 70 shop owners of their business without any individualized process at all,” the letter states. “It does not seek to separate ‘bad actors’ from ‘good actors’ through any type of process. It does not afford a hearing. It simply eliminates businesses.”

Shop Owners Say Code Violations Are for Electrical Issues

The Fresno Planning Commission heard the ordinance for the second time on Feb. 19. This time, Janz sat in as legal counsel for commissioners — a rarity, usually deferring to a deputy city attorney to advise the group. The city attorney’s code enforcement team spearheaded the inspection operation against smoke shops with illegal activity.

“In the ones that we’ve looked at — approximately 100 smoke shops — all of them had some form of violation, if it’s a code violation, if it’s them having illegal gambling, firearms, drugs, you name it, we found violations at all of them,” Janz said.

Many smoke shop owners said at the meeting they are willing to work with the city to come into compliance.

“Give us some rules that make sense, that we can actually do,” said Shiraz Sufyan.

One smoke shop owner said that even though code enforcers found violations at all smoke shops inspected, some violations were for electrical or wiring issues, not for gambling or drugs. He said he was cited for having an LED light over a display case.

“If you go into any restaurant today, you’re going to find 100 violations regardless if you decide to attack restaurants today, it just depends on the industry that they’re attacking,” another shop owner said. “At this time, it’s smoke shops.”

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City Has Power to Regulate ‘Bad Actors’: Wynkoop

As to whether his clients would sue the city, Wynkoop told GV Wire they plan to work within the system to fight the amendment.

“Since we hope to defeat the proposed amendment prior to passage, any idea of pursuing legal action is premature at this time,” Wynkoop said.

Wynkoop’s letter said the city should compensate business owners shut down by the ordinance. He estimated the cost could be in the tens of millions.

Councilmember Nick Richardson spoke during the public portion of the planning commission meeting, saying he thought the ordinance is taking legitimate businesses out of operation.

Wynkoop’s letter said current laws and regulations give officials enough power to shut down businesses in violation.

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Seizures of illegal inventory caused 15 smoke shops to close down, said Deputy City Attorney Erica Camarena during the Jan. 15 planning commission hearing.

Arias said in a previous interview that the most the city can fine a shop with violations is $250. For a shop selling cannabis or fentanyl, that’s not sufficient, he said.

Commissioner Linda Calandra suggested grandfathering in existing businesses. She said she didn’t like shutting down businesses which could impact hundreds of employees.

Planning Commission Chair Peter Vang disagreed with Calandra, saying the permit is important.

“The way the world is moving nowadays, we’re thinking about our children,” Vang said. “Ultimately, just like liquor licenses, this is what the wave is going towards — being more strict, more transparent, holding people more accountable.”

California Smoke Shop Association’s Letter to City

Read the letter at this link.