During the 2025 Session of the Virginia General Assembly, House Bill 1946 (2025 Acts of Assembly, Chapter 595) and Senate Bill 1060 (2025 Acts of Assembly, Chapter 596) were introduced by Delegate Hope and Senator Ebbin respectively. The legislation proposed, among other things, to clarify the agency responsible for enforcing the restrictions on sales of tobacco products to individuals under 21 years of age. The legislation was amended to establish a retail tobacco licensing and enforcement framework intended to prevent sales of tobacco products to individuals under 21 years of age; however, neither the introduced nor substitute legislation was enacted. Rather, the legislation was further amended to direct the Department of Taxation ("Virginia Tax") to convene a work group and develop an enforcement program to address the sale of retail tobacco products or hemp products intended for smoking to individuals younger than 21 years of age. A copy of the enacted legislation directing this study is attached as Appendix A.

This report reflects the deliberations of that work group. In order to develop an enforcement program to address the sale of retail tobacco products or hemp products intended for smoking to individuals younger than 21 years of age, consensus emerged among group members on the following points:

• A comprehensive retail enforcement program aimed at preventing sales to individuals under 21 cannot be accomplished without a corresponding licensing structure for retail tobacco products.

• The licensing and enforcement functions would be best performed within the same agency.

• Given its experience with alcohol regulation and enforcement, the Virginia Alcoholic Beverage Control Authority (“Virginia ABC") would be best situated to administer such a licensing and enforcement program.

• Designated funding is required for ongoing expenses related to licensing and enforcement.

• Greater involvement from local law enforcement could aid in reducing overall state costs.

The work group considered the costs associated with such a licensing program and discussed options for funding sources and agreed that startup funding could include a combination of direct appropriations, a treasury loan and interagency transfers, while ongoing expenses should be funded via the permit fee for which there would be no payment exemptions, as well as through compliance penalties.