'Not fair': Worcester considers cap on tobacco sellers

WORCESTER — William Kiritsy has owned his Grafton Street liquor store for a dozen years. Besides a full line of alcohol products, Kiritsy depends on tobacco sales at the cash register to keep his business going.

But a potential move by the city to put a cap on the number of permits to sell tobacco products has Kiritsy worried.

“It's not fair to have a regulation in place that limits the number of licenses. (The city) has to look at this in a more balanced way,” said Kiritsy, who owns Olympic Wine & Liquors. 

He’s not the only one with concerns. 

The National Association of Tobacco Outlets (NATO), a trade association that represents more than 60,000 retail stores across the U.S., believes the proposed cap could hurt the resale value of some businesses that currently hold a permit.

"I am writing to submit our comments and concerns regarding the proposal to limit the number of tobacco product sales permits in Worcester to 227," reads a Jan. 30 letter from NATO to Soloe Dennis, Worcester's director of the Division of Public Health.

The city's Board of Health could vote to adopt the cap when it meets next month.

To get the details of the proposed cap and its potential impact, the Telegram & Gazette spoke with Zachary Dyer, deputy commissioner of the city’s Department of Health and Human Services. 

Why a cap?

There are several reasons.  

Worcester's Department of Health and Human Services and the appointed five-member Board of Health — it currently has four members — is concerned the city has an excessive number of businesses selling tobacco, which is bad for public health. Dyer called the smoking of tobacco the leading preventable “behavioral cause” of death in the U.S.

Another concern is Worcester has more than its fair share of businesses selling tobacco products. A total of 215 permits (205 for retail shops and 10 for smoking bars) are currently issued, and a disproportionate number are located in low-income neighborhoods and communities of color, where the health impacts are felt.

"A cap should have been set long ago. The number of (tobacco) retailers is too high," said Dyer.

The negative health impacts for Worcester in general, and for low-income neighborhoods in particular, are troubling for the city. A problem that Dyer said needs to be corrected. 

“The Department of Health and Human Services has been committed for a long time to advance public health and pursue best practices in terms of public health. This (proposed cap) is one of them,” said Dyer. “We want Worcester to set an example for public health, be an example in the region and state for what a healthy community looks like." 

Another reason for a cap: It adds teeth to the city’s enforcement efforts to punish businesses that violate the rules. Last year, the city reported 26 violations, and 14 were for selling tobacco to someone under the legal age of 21.

The current course of punishment at the board's disposal for businesses that violate permit regulations, according to Dyer, is to hand out fines. According to state law, it's $1,000 for the first infraction, $2,000 for a second and $5,000 for a third. If there's a fourth violation in three years, the board can revoke a permit.

However, the business can apply for a new permit, because there is no cap on their number.

Dyer explained that if a cap was in place, then the business couldn't apply for a new permit, because there wouldn't be one to apply for.

Why cap the permits at 227?

The number is a balance of public health concerns and supporting economic opportunity for local businesses, according to Dyer.

Setting the number at 227 includes the number of permits currently issued, 215, leaving a few extra slots for businesses that might want to settle in Worcester.  

Included in the 227 is 12 permits for “smoking bars,” commonly known as “cigar bars” and “hookah bars.”

Right now, the city has 10 such establishments, and by offering 12 permits, two more smoking bars could settle in Worcester. 

What about concerns with proposed cap?

Kiritsy’s main complaint is language in the proposal that says if a permit is surrendered, revoked or not renewed, it's permanently retired by the Board of Health.  

For example, when one business loses a permit, the total cap is reduced by that number. That means every time a permit is permanently put out of commission, the total number of available permits is cut by one.  

Kiritsy worries if a large number of permits disappear forever, the majority of those that remain could be controlled by one business, like a convenience-store chain. The result could be a monopoly of Worcester's tobacco sales market. 

Dyer acknowledged it’s a concern he didn’t consider, and will consult with city staff and the Board of Health to address it. 

As for NATO, it says its primary concern is the proposed regulation doesn’t allow for a transfer of the permit to a new owner when a business is sold. The result is the permit disappears into oblivion and reduces the total number of permits the city can grant. 

In its letter to Dennis, NATO said the situation is troublesome because it devalues a business at the time of sale because the new owner can’t earn revenue from the sale of tobacco products. NATO said it recommends the city add language to the proposal to give a new owner 60 days to apply for the permit that belonged to the former owner. 

Dyer said that request will be added to the proposed regulation when the board takes its vote.

Final thought

The number of cities and towns in Massachusetts that put a cap on the number of permits to sell tobacco products reportedly falls around 80. Dyer put the number above 100, including Shrewsbury, Grafton, West Boylston and Leicester.

Compared to those communities, Worcester's population is significantly larger. As the city's public health officials see it, Worcester has too many tobacco sellers, concentrated in underserved neighborhoods. It's a mix that is bad for public health and must be corrected.

"An advanced cap reflects our values be a healthy community," said Dyer.

Contact Henry Schwan at henry.schwan@telegram.com. Follow him on Twitter @henrytelegram