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Businesses That Typically Need the License Convenience stores and gas stations Smoke shops and cigar lounges Vape shops and e-cigarette stores Liquor stores carrying tobacco Grocery and drug stores selling cigarettes Vending machine operators Who Is Exempt The state retailer license requirement does not apply to: Stores selling only paraphernalia (papers, pipes, lighters) without any tobacco or nicotine Locations also licensed for cannabis sales (state law forbids both at the same site, and AB 8 reinforces this prohibition starting January 1, 2026) Manufacturers, distributors, and wholesalers (they need different CDTFA licenses, covered below) The Three Layers of California Tobacco Licensing California stacks three layers of regulation on tobacco retailers, and you must comply with all three: Skipping any one of these layers can shut your business down