we had never thought about that, the equity issue. they said we're really sorry, and the next day they began to take cash. they didn't have to change their whole operating system. they started taking cash so business community has been mixed. the community folks who live in the cash community have been all positive. i have had meetings with folks from boma and the chamber. they haven't taken a position. they are not opposed, but also not supportive. they're neutral. we met today and many of the amendments i talked to you about today will be the result of those meetings and they will be happy when this goes through at the board of supervisors. >> and to bring you back to one other thing, recommending exemptions to this if a business

could justify its case like large cash, things of that nature and in the small small business community, sometimes one rule can't accommodate all businesses appropriately, so just a consideration. >> an i will take the idea of cap on cash back to the supervisor. i don't know that she will be open to carving out exemptions for multitude of other types of business, but i think that might be a good sense andable solution for a lot of businesses and issues. >> commissioner dooley. >> i want to support this. i work in an industry that deals in enormous amounts of cash every single day. and you can handle it. i mean, it's something that can be done. and i also see every day there what a great equalizer that people come in and they spend

$20 in cash and you can tell sometimes that's as much as they're going to have. they will say this is all i have for this purchase for three weeks. i get other people who come in and spend hundreds of dollars in cash. they have their own reasons, but i see every type of person coming in, and i really am happy to see this legislation because it would effect the weakest and the least able to cope with just trying to buy normal, daily things. >> thank you. it was funny when supervisor brown asked me to take this next door to supervisor fewer's office, supervisor fewer, i told her about it and she said that's funny, not in a laughingway, but last weekend my husband and i were downtown and we went into a cafe and ordered cups of coffee and walked out and there was one of our neighbors out on the street asking for spare change.

and they gave him some spare change and said, but you can't get a cup of coffee this there, they don't take cash. and that's when she came on as the second primary sponsor. >> commissioner dwight. >> so i think that this is administered by the police? >> this is administered by the division of weights and measures which administers and regulates all points of sale systems in san francisco. >> commissioner: so just to comment on the concept of carve-outs, i don't think you need to specify any specific carve-outs. i think what would be advisable is to have a clause, a paragraph in here allowing for the review of a conditional exception based on someone who comes to you and presents you with information that you don't have today. there may be businesses out there, either types of businesses or lowings kays of specific businesses, where it might make a great deal of sense

to give them an exception. and so rather than saying there are no exceptions whatsoever, having a provision in here which allows for someone to bring you a case -- bring a case to the department that administers this, in the event that they can make a case for an exemption. or an exception. however you want to put it. but don't -- i wouldn't waste any time trying to figure out what those might be. what i would advise you is to leave the door open for things that you haven't discovered because no one can do 100% outreach. and often times we don't find these things out until after we pass legislation and then we scram to believe try and fix it, and it's always harder to fix it after it's been passed because everybody moves on than it is to try to anticipate ways of dealing with unintended consequences in the beginning. so there's nothing that says that there are -- that you would grant that exception, but it provides for someone to bring

you an exception and an adjudication process for determining whether that exception should be granted. >> thank you. i will follow up with kree morgan at the division weights and measures, the county sealer, as you will, and see, one f their office is able to do that as a regular course of business. >> commissioner riley. >> commissioner: yes, i think commissioner dwight, you got to point there because i came across some cases where somebody's mad at a store and instead of bringing regular $20 or $10, they bring all these pennies. so they have to accept it, but then they have to take it to the bank in a little push cart. and the bank had a hard time dealing with that also. so i know they cannot write legislation to address every situation but with your

suggestion, the case might be able to fall into the category. >> one of the sectors that had some objection was late night convenience stores and gas station where is the employees are vulnerable because they're all alone. they're in a position where they have to deal with cash. and they may be sitting behind bulletproof glass and they may not be, but there was concern at the council district merchants from one of our member who is happens to own some convenience store where is he felt that after hours that that potentially posed a risk. we also had another person who was concerned that his -- i think it was a barbershop that he was concerned about his employees have been to handle a lot of cash. owners have safety concerns and it may be relative to their locations not to pass judgment on any particular location or neighborhood. but again, to be able to come and say, look, i have a specific

case here where i am in jeopardy, and i will have an employee that will get injured, close my business or i'm going to have to hire a guard. that is an expense that would be an undue burden on a small business. >> also your comment about asking if weights and measures can do it. they can do it. because you're legislating and this is going to be your job. it's not up to them. it's up to you. and so when you sit there and say i have to go see if they can do it, they can do it. because it a what's you legislate them to do. so i would support that change. commission commissioner laguana. >> commissioner: i want to add my support to commissioner dwight's excellent suggestion. there should be an outlet for the unforeseeable cases that there are definitely going to be some.

>> the question i would have for the commission, not a question, an ask for suggestions since you are all been in the business community. what sorts of ideas do you think the criteria would be for weights and measures to grant exceptions? would it be a bad neighborhood? >> an i'm not here to make that determination, which is exactly why i don't recommend that you try and figure out specific carve-outs because i don't think that we can really come up with that today, and i think it would delay your legislation, and all of the other benefits that it has. and what it -- all it does is provide for the future an avenue in the event that there are unintended consequences, which we generally find there are more often than not, unintended consequences of legislation, and you've already come up against some objections. so it would, i think, go a long way to assauging those

exceptions for an appeal without saying, nope, sorry, we passed legislation, you are out of luck. that just seems very dictatorial and we are getting so accustomed to dictatorial things in our current society that we should not be doing that kind of stuff in our fine city. >> director? >> similar to the health care security ordinance or other processes that sort of oversee the weights and measures administratively could put up some guidelines to solicit and get feedback from the business community before they implement a procedure. so as both president adams and vice president dwight have said, getting into the specifics is maybe -- doesn't allow for that

flexibility, and it's better to have -- giver the department the ability to develop the administrative guidelines for making those determinations and then it allows them to be able to flexibly adjust them as the time goes on. >> the legislation can specify, it is up to you, weights and measures, to come up with your own set of guidelines. it doesn't have to specify the guidelines. we had to come up with certain guidelines around the legacy business program that were not specified in the legislation. it was given to us as, you will do these things to perfect this plan that we've laid out. >> thank you. >> any other questions before we go to public comment? >> okay. let's open this up to the public. do we have any members of the public who would like to? come on up. >> good evening, commissioners. i operate a food truck business

here in san francisco. i don't know if i have enough time to cover everything that i want to say tonight, but we went cashless in january of 2019. so we have multiple food trucks here in san francisco. this legislation will not require food trucks to become cashless, which i appreciate. and we are going to be opening a restaurant, but the reason really when we started to debate the idea of going cashless, it wasn't something we did overnight. we spent months and months and almost a whole year trying to think about this because we really saw there was some cons to the pros as well. we understood that there would be some people that don't carry cards as well. ultimately, we started in 2010. when we started in 2010, we were accepting 80% cash to 20% credit. by 2018, we were accepting less than 15% in cash. and so these statistics are from 2015, but our own business statistics show that it's swinging in the other direction,

right? but that wasn't really the main decision of why we made the decision to go cashless. it came down to the safety of our employees. we are pretty popular business and we have long lines and we could become a target to people trying to rob our trucks and my dad was a restaurateur in san francisco and robbed at gun point for the cash. and so we made the decision based and do we waiting in somebody gets hurt or killed or the decision to prevent any type of employees or threats to our customers at our business. and right now i am a san francisco native and i was born here, raised in the west end edition as a low income family, so i understand that there's individuals that are from there and the doesn't do the educational system doesn't really do a good job educating us as kids growing up in the city about why banking, why credit is good. they say don't participate in it

this risk. don't participate in the stock market. it's a risk. what this is doing is further really encouraging that, i think, for residents of san francisco. it's not really supporting them. so where's the other part of that? of let's educate these folks on how to participate in the system because that's where it's going. if a business doesn't want to accept cash, that's okay or credit, that is okay. there are plenty of cash only businesses. that should be the business's decision. to say that they're not able to participate is false. they can go -- there's cards and preload cards and no identification needed and the real difference is a $3 to $6 charge and maybe they don't have that $3 to $6 charge and i get that. and there is accessibility and they don't know it's accessibility and rejected with the residents on how to

participate in the system. and give the business the choice to accept cash or not. >> thank you. next speaker please. >> good evening. steven cornell with council district merchants. we do not have a position at this time, so i am speaking for myself at this time. one of the problems i have always felt that when legislation comes through, there is who doesn't get it? and who has the legislation put on them? and who doesn't have it? and also where is government coming in on this? so first, who's getting a carve out? if this legislation is supposed to b taking care of people who don't have cash, i find it a little hard to believe that insurance agents should be carved out. people need car insurance. i can see them going into an agent and saying here's my $100 a month or whatever in cash. i don't quite understand that.

but the biggest group that i don't understand is the city and county of san francisco. there are agencies in the city that do not accept cash, mainly in the building department, and in building inspection and planning. not all of them, but some of them. why aren't they made to give cash? i would like to quote from sf muni website. >> because paying with cash slows the system down, we reward you with a lower fee for paying with other means to muni. so if the muni is going to reward people for not paying cash and this legislation is going to say we can't charge extra to take cash, there is something wrong with that balance if the city is going to tell us to do something, they should do it themselves. thank you. >> thank you. any other members of the public?

>> president adam: seeing none, public comment is closed. commissioners? >> commissioner: do you want me to take a crack at a motion here? >> president adam: in the motion, add that the city and county of san francisco take cash if everybody else is. the last public speaker was absolutely right. d.b.i. and planning does not take cash. so when you sit there and say, shake your head and say, no, that's not true. it is true. there are several agencies and so we need to make this an even playing field. >> may i address you? >> yes. >> police code that we are ending today or going to amend soon does not regulate the city and county of san francisco. supervisor brown would be happy to take that up in future legislation, but the police code does not regulate the point of sale systems for san francisco city and county. >> drop the mic.

>> very hypocritical. >> may i just -- and mr. president, i think you can make your motion and then say, we encourage the supervisor or the board of supervisors to follow up with legislation to equalize and require the city. to figure out where that appropriately lives, probably in the administrative code, but -- >> wait a minute. commissioner ortiz has the floor. >> an i want to put on record i know the way we're going to vote with the amendment, but i really want to make a strong point that without the suggested amendment that we are about to propose, i wouldn't support the legislation, so the amendment we're about to suggest is probably the reason i am going to vote in favor. >> so before i craft this, i think that we have two proposed amendments. one is to consider some kind of a cap or a maximum amount of

cash that you have to accept. and then the second is to have a provision for a conditional exception to be adjudicated by the weights and measures department. and the suggestion that the city also adjust their policies so that they accept cash, though that is not in the purview of this legislation. >> and before going into a second, is this approval conditional upon those two -- upon those two or three amendments being accepted? >> yes. >> so while we agree with the social justice issues with this legislation, we do conditionally

support it, conditional on the addition of two amendments. one being a cap to be determined on the amount of money that must be accepted per transaction. and second, that there be a provision for conditional considering and adjudicating conditional exceptions to accepting cash. that will be administered by the department of weights and measures if that's the correct department. got it? you're quick. >> and got it down the first time. >> i did. >> do we have a second? >> we don't want to read it back? >> an i can read it back. >> motion by commissioner dwight to conditionally approve with the addition of two amendments. one being consider a cap on cash transactions. and two, provide for a pathway

for conditional exceptions of cash to be adjudicated by the weights and measures division. >> well, and the first one not the consideration of a cap, but the implementation of a cap. to be determined. i don't know what the right amount is. >> does that sound right? >> yes. >> do we have a second? >> second it. >> and also that the third consideration of the further legislation. >> and to add a comment to our amendments that we would appreciate if the city would adopt the same principles across all of its department which is does not currently do in accepting cash.

>> motion by divisioner dwight to conditionally approve the legislation with the addition of two amendments, one being the inclusion of a cap to be determined by -- at a later date on cash transactions. and two, to provide for the conditional exception adjudicated by the weights and measures division. in addition, the commission would also like to suggest that the board of supervisors consider further legislation which would recommend that the city and county of san francisco also accept cash per rules tantamount to this piece of legislation by city departments.

seconded by commissioner laguana. roll call vote. commissioner adams. >> yes. >> a commissioner dooley. >> yes. >> a commissioner dwight. >> yes. >> a commissioner laguana. >> yes. >> u a commissioner ortiz-cartagena. awe commissioner zouzounis. >> motion passes 7-0. >> commissioner, may i make a note that this would also apply to the legacy business program because currently we do not have cash. >> well, we should. >> president adam: next item please. >> okay. item six, input from businesses with tobacco permits and presentation on tobacco statistics pertaining to board of supervisors file 190312, health code, restricting the sale, manufacture, and distribution of tobacco products, including electronic cigarettes. ordinance amending the health code to prohibit the sale by tobacco retail establishments of electronic cigarettes that require, but have not received,

an order from the food and drug administration, approving their marketing and prohibiting the sale and distribution to any person in san francisco of flavored tobacco products and electronic cigarettes that require, but have not received an f.d.a. order approving their marketing. discussion and possible action item. >> commissioners, we will have a presentation as the first policy presentation to you from dominica on the excellent research she has done. >> live from city hall. >> great. sf gov tv, i have a power point presentation. great. good evening, commissioners. dominica donovan, senior policy analyst with the office of small business. so today i am going to go over a legislative review and analysis

of board of supervisors file 190312. this is a little different than what our usual procedures are just provided that this piece of legislation is on the fast track. the office of small business wanted to provide this business and overview and analysis to consider it given that fast track status. so before i begin the presentation, i just want to briefly and for the public record offer a reminder that the legal authority that was authorized by the voters in 2003 directs the small business commission to set policies for the city regarding small businesses consistent with and overall objectives by the mayor and the board of supervisors through the adoption of legislation and in order to promote the economic health of the small business community in san francisco. , its employee, and customers. it also requires a small

business commission review rules and regulations developmented by the city departments that effect small businesses and recommend modifications that would promote the health of small businesses. and that regard we have provided this analysis and the following findings. that language is also in the administrative code. apologies that i do not have the citation available right now. and so with regard to the legislative background the federal food and drug and the family smoking prevention and tobacco control act often referred to as the tobacco control act in the legislation. the law requires that all new tobacco products not on the market before february 15, 2007, undergo a premarket preview before it enters the marketplace. this includes cigarettes and excludes cannabis because cannabis is not yet a federally

controlled substance. both cigarettes and cannabis are substances that in the city and county have a 21-plus minimum purchasing age. a new tobacco product may not be marketed per the f.d.a. regulations until it is undergone a premarket review and the premarket review allows f.d.a. to consider whether the marketing of the product is appropriate for the protection of public health. most, if not all, electronic cigarette products, have not undergone f.d.a. pre-market approval, despite having been on the market since 2007. electronic cigarettes or e-cigarettes have since 2007 had a surge in popularity among middle and high school students in the united states. 2017 researchers identified more than 15,500 unique cigarette flavors. flavored tobacco is highly appealing to these consumers and in 2017, san francisco approved

a flavored tobacco ban. the centers for disease control and prevention reported that middle and high school students who reported to be current users rose from 3.6 million to 4.9 million students in 2018. in 2017, in the united states, the c.d.c. administered the youth risk behavior survey. and the result of that survey was that 42.2% of high schoolers reported to have ever used an e-cigarette product. and importantly, in 2017, san francisco, 25% of high schoolers reported to have ever used an e-cigarette product. that number is down 22% from 2015. and importantly t minimum age for tobacco purchases was raised to 21 in 2016, so it's likely that that drop was responsive to

that raise in the minimum age. the findings of the legislation references many data points retrieved from the youth risk behavior survey. in 2017, 7.1% of high schoolers reported to currently use e-cigarettes. at least one day per month. based on the population of san francisco high schoolers, that t cans for 1,126 students and that number was reduced by fsh reduced from 13.3% in 2015. youth who reported to currently use e-cigarettes were also asked if they usually bought the product in a store. importantly for you all to know the definition of store in the survey was not defined, though it's alluded to in the

legislation that a store would be in the city and county of san francisco. however, that's not guaranteed to be the case. especially considering our proximity to other localities. so just keep that in mind. in 2017, any city of san francisco, 13.1% of student who is had reported to be current users of e-cigarettes, so et gets a little wong wonky. that's 13.1% of the 1126 students identified as usually obtaining their products from a store. so that accounts for about 147 possible students. the legislative review that you have is indicated that is approximately 153, but that was an incorrect calculation, so it should read 147.

so with regard to the legislative intent, we understand that the piece of legislation was responsive to a national surge in the use of e-cigarettes by youth population and responsive to some san francisco youth continuing to access and use e-cigarette products. this piece of legislation would ban the sale or distribution of e-cigarettes that do not have f.d.a. pre-market review assessment in san francisco by brick and mortar and by male and by -- by mail and by online retailers. where tobacco use in san francisco is at an historic low and where just approximately 3% of san francisco tobacco retailers were found to have not verified the age of a tobacco purchaser in 2018, this law would mostly impact those of legal purchasing age and 21 and older adults and vn economically

adverse effect on licensed tobacco retailers. i will explain how i came to the conclusions in the following slides. and so as of december 2018, but really that's april of 2019, there were 746 active tobacco retail permits in san francisco approximately and 700 of those retailers are considered to be small, independently owned grocers and corner stores, many of which are minority and immigrant owned. since the implementation of the san francisco permit density cap in 2015, the number of active tobacco retail permits has been reduced by 23%. district four, seven, and 11 now have fewer than 45 active permits each, and the remaining districts have more than 45 and due to many having been

grandfathered in under the 2015 law in just -- just a quick thank you to the san francisco department of public health for providing that information. so this graph will also illustrate how many tobacco retail permits have been reduced since the implementation of density cap and the number of active retail permits have been reduced by 23%. that indicates that the permit density cap has had its intended effect of reducing the number of tobacco retail permits in the city of san francisco. so going back to how i got to the age verification compliance rates, two dities are responsible for the state of california is also responsible, but i have data from the food and drug administration as well as the city and county of san francisco with regard to tobacco

check inspections since 2012, and the f.d.a. has conducted 222 tobacco check inspections in san francisco of those and of those, only one small and independent business issues and issued a warning letter for failing to verify the purchaser -- very hard word to say, age when they attempted to purchase e-cigarette product. there were eight violations observed in total by just six businesses who account for less than 1% of tobacco retail permit holders. the san francisco department of public health reported in 2018 there were 21 instances by 20 businesses observed where the tobacco retailer did not verify a customer's age. in other words, that's approximately 3% of all tobacco retail permit holders.

so i also looked at and thought it might be important for you to know the san francisco youth tobacco and other controlled substance use. there were a number of data points retrieved from the san francisco youth risk behavior survey there were discussed in the legislative findings. so i tried to pull together some of them to illustrate for you what tobacco use by use looks like in the city and county of san francisco. so in 2017, 16.7% of san francisco high schoolers tried cigarette smoking. that's ever. that's one or two puffs. that's not every day. that's not every month. that's just having ever tried. that number is down from 24.4% which was reported in 2015. and you can see that in the graph. and there the orange indicates

san francisco use and the blue indicates u.s. numbers. since 1997 there is a 71% decrease in the number of youth reported to have tried cigarette smoking. that is a pretty dramatic increase over 20 years and likely due to there being approximately 31 rules and regulations at the city and county of san francisco administers with regard to tobacco control. nationally in 20179% of high schoolers reported -- excuse me. compared to the u.s., and san francisco consistently under reports less use than the national average. so the graph that you are looking at here with the current cigarette use and current is

defined as once per month or more. and again, san francisco is represented by the orange line. the u.s. is reported and is reflected in the blue line. in 2017, 5% of san francisco high schoolers reported to currently use cigarettes and that number did not change from 2015 but still remains under the national average. what you are looking at here reflects electronic cigarette use by san francisco high schoolers. i included those who have ever used electronic cigarettes and that is tantamount to having ever tried regular cigarettes. those who currently use electronic cigarettes and one day or more per month and those who use e-cigarettes daily.

in 2017, 25% of high schoolers reported to have ever used e-cigarettes an e-cigarette product. and that number is down from 32.2% and in 2015. 2017, 7.1% of high schoolers reported to use an electronics cigarette. this is down from 13.1% in 2015. so that's reduced almost by half. and likely the enormous jump in the enormous decrease is due to the 2016 law which requires that those age 21 and over are allowed to purchase tobacco products. with regard to daily e-cigarette use, that number is

significantly lower than those who have ever used electronic cigarettes. with regard to substance use across the board for substances that require ill a legal purchasing age of 21 or above, youth in san francisco currently use alcohol and cannabis and e-cigarettes and cannabis and is currently more than one day per month. ever is having ever tried. and given that in 2015 and 2016 in particular, there were substances that were much higher in use by youth. and the gray bar represents

cannabis use and the yellow bar represents e-cigarette use. since 1997, alcohol has reigned a tz most frequently tried substance. and the highest frequency was alcohol and cannabis. for 2015, the electronic cigarette use is extraordinarily high. that was significantly reduced in 2017. however, alcohol and cannabis were reported at almost double the rate of current use as electronic cigarettes.

in the absence of a city administered economic impact study, we can only rely on self-reports for anticipated revenue losses by licensed tobacco retailers. one corner store owner estimates he earns $200 per day conservatively from e-cigarette sales. based on this, we can approximate that the licensed tobacco retailer could stand to lose up to 72,000 per year in sales. obviously that's going to depend on the size of the business. it's important to remember that there are 700 small businesses with tobacco retail licenses, all of whom would stand to lose approximately $72,000 per year.

with regard to that and considering the greater economic climate and that small businesses are operating in in san francisco and california. and the highest taxes in the nation. the small business commission reviewed a couple of weeks ago the minimum franchise tax exemption where we discussed the tax climate that small businesses operate within. in addition to that, over the past decade alone, commercial retail rents have skyrocketed in the city and mostly affected those small businesses who aren't making competitive revenues to their neighbors. and those small businesses had to comply with a multitude of new local and state legislative measures including but not limited to the minimum wage ordinance, plastic litter, toxic

reduction, health care security ordinance, the san francisco bag ban, cigarette letter abatement fee, child care tax, and the flavored tobacco ban. while those measures have undoubtedly been in the greater interest of the public good, their sudden and successive implementation has had an adverse impact on the economic health of the small businesses. particularly for grocers and corner store owners among others. and undenighbly, these measures have likely also contributed to small business owners and have potentially increased the retail vacancy rate as well. e-cigarettes have been sold by grocers in corner stores and those effect past sales into the

gross receipts and into their projections. to implement this ordinance with a 30-day effect live rate would significantly impact many small businesses. and should this legislation pass as written, and undoubtedly be some small grocer and corner store closures that will contribute to the increase in vacancies and job losses. additionally, crime may rise as well in very vulnerable neighborhoods. according to one study, retail closure were reported with an increase in crime. and with the extra liting and provides for the added level of public safety. and with the form of incidental surveillance which can lead to public safety as well.

and specifically when you look at areas with high box scores, particularly and the commercial areas and you will see that crime rates are lower than in areas with lower walk scores which indicate that there are fewer retail outfits in those areas. a city wide e-cigarette ban could also contribute to an increase in illegal transactions involving this product. and talking about black market exchanges of electronic cigarette products. additionally and despite unsubstantiated claims and are an aid among adult users. according to 2018 national academy of sciences study, there is substantial evidence that completely switching from

regular use of cigarettes to e-cigarettes result in short-term adverse results and reduce adverse health outcomes for the users. where this legislation would most specifically impact adult consumers, it could potentially have the opposite effect of reversing efforts to reduce cigarette smoking on the part of those adults. so with that, i'll also add that there were a couple of other observations. positively, this legislation does close online loophole which would potentially limit youth access to e-cigarettes. right now we know there are many opportunities for consumers to purchase e-cigarettes via

websites, via mobile applications, and so if amended to include mobile applications, tantamount to third party distributor, that would close a significant loophole. that's important due to the fact of those current e-cigarette smokers who are used, they're accessing those products onloin or via other social sources. so that would be -- that would contribute significantly to closing that to preventing that. i will also add that this legislation would not include electronic devices that are used to consume cannabis. those devices you can also use them to consume an e-cigarette product. so that's just something to note. that was a lot.

so i will welcome any questions. >> president adam: commissioner dwight. >> commissioner: i have a couple of questions. where does the stoor get its tobacco retail license? from the city --. >> from the san francisco department of public health. >> commissioner: how much does a permit cost? >> an it costs approximately $380. it's valued at a lot higher due to the permit density cap because there are so new retail permits that are available, that can be purchased as a 45 permit cap per every district. >> the permit goes with the store if it's sold, like a liquor license? >> no, it does not. >> okay. why is there -- what's hosh how can there be a market if i's only administered by the city?

so if -- it is an investment opportunity if i can buy low and sell high, but if in abandoning it, and now if i don't have it, i am going the lose all the business, but did i buy that license to invest license itself the way i might have bought a taxi medallion one day a long time ago because there is an open market to those, but there is no open market. if you give up your loi license, you can't sell it to someone else and it goes back to the city and they resale for $380, correct? >> so with the density cap, the intent of that is, no. so except for the three districts that have less than 45 to be permits, you may be able to apply and receive a new application from the department

of public health for the remaining nine districts, you are not able to get a new application until the number of tobacco permits falls under 45 in that district. >> commissioner: that's fine, but you don't buy it from a current store owner. you buy it from the city. if there is none available, you can't buy one. if one becomes available because it os abandoned by a store that goes out of business, the city has it to sell, but they are not -- they can't sell -- there is no arbitrage for them. they have to sell it for what they sell it for which is $385. >> what happens when you buy a store? >> an i think -- if you buy a store that has one, does it come with the store basically? >> that's not my understanding that it goes with the store. >> whether there is a market because we are going to consider a recommendation that the city make a person whole for what they invested in this. if it's $385 that is a different

equation than if it's worth $50,000. if there's 746 permits that the city would pay $50,000 for to duly compensate them for taking away the privilege of selling tobacco, that is a big number. if it's $385, it's trivial. >> can i say that the city does not sell the permit? the city -- you can apply and you receive a license to sell. and so unlike -- so if we want to use alcohol for an example, there is an absolute limited supply on full alcohol licenses and so that has increased the value, but that is a value that one business gets to tell to another business, right? and then you register with the bureau and with the abc.

so because we haven't allowed for the transferring, thoi can't function in the same way that alcohol permits can. i want to be careful because even though alcohol has the -- the abc selling from one business to another has a value, you still have to apply for abc, which is the equivalent. >> there is a presumption that if the restaurant or bar has a liquor license that if i am going to become the new owner, that i have a good chance of getting that. that is why there's value in that. here it sounds like there is not that same sort of relationship. just trying to get to that because it affects economic -- the other side of this equation is the revenue side. you have presented that the

average revenue for every one of the stores is $72,000 a year in these tobacco products that would be banned. if we multiply that, that's $54 million a year in tobacco transactions. and this county alone. that's a substantial amount of money, i think, for the assessor's office for the gross receipts tax on, for one thing. and also it is -- that's a huge hit. $72,000 in revenue is a big hit to any small business. >> commissioner: i spoke to one small store owner who's already take an $60,000 hit on flavored tobacco being gone. >> because sales are gone? >> commissioner: because he can't sell it anymore and taking between what he had in his -- >> inventory. >> and sales, he's taken a

$60,000 hit. that's a big hit for a small corner store. >> absolutely. >> commissioner: i have some underlying questions about that. >> i want to get back -- i'm good. >> can i clarify your question really quick. the tobacco retail density caps the supervisor district and puts prestrikss on the sale of the license, so although there is no ability to transfer it, there is the ability to sell but it after the second time the person who buys it the second time can't sell it again. >> u an it has a one-time, transaction value. >> you are right. >> president adam: commissioner dooley. >> commissioner: i wanted to make a quick comment that the delivery system for marijuana does not allow for tobacco. it is, in fact, i would say in

the marijuana industry, tobacco is seriously shunned. every day people come in and want to know -- that are from europe -- why we don't have -- why they can't mix their tobacco and cannabis, and we have to say, you know, we don't the encourage use of tobacco, and we certainly do not provide any products that would be useful because bring these juule things in and none of them work. they're not compatible with marijuana. >> for every single device? >> every single device sold in a dispensary. i have never actually heard of anybody that has sold anything that would be compatible. they are very different delivery systems. >> president adam: commissioner laguana. >> commissioner: first of all,

domineca this was a lot of work and you did an accident job. thank you for assembling this. it is a lot to digest and must have been a lot more to doened an it shows and is excellent work, so thank you for doing that. i had a couple of questions. source of the data and department of health, san francisco? >> san francisco department of health provided the data with regard to tobacco retail permit holders as well as the inspections that have been conducted by the san francisco department of health for the rest of the data, i got that from the centers for disease control. that's the data that was referenced in the findings of the legislation. >> commissioner: what is the source of the data of san francisco specific youth usage? >> that's from the centers from disease control from the youth risk behavior survey. >> commissioner: in the that

breaks out e-cigarette from tobacco usage. and there's been a surge even in san francisco and tobacco usage over the past. >> consistently with regard to cigarettes is consistently going down. >> that is not what's measured in the survey, so we can't say nicotine usage gone up. the survey specifically asked with regard to cigarettes and e-cigarettes, so you can't make a determination definitively that would say nicotine usage has gone up. that is not possible based and how the survey was written. you can infer it, but you can't

definitively say that is indeed the case. >> commissioner: are there e-cigarettes that don't have nicotine? >> there are, yes. >> they are as popular as alcohol that doesn't have alcohol. >> right. there are varying levels based on the product. i'm sure that there are some industry folks in the audience who can speak more definitively to that, and one particular brand, juule, has been known to have nicotine levels in one packet that far surpasses other products. and they also account for about 1/3 of the market. >> commissioner: juule stopped selling some sort of flavored pod. is that in response to the legislation that passed last year? >> it's likely in response -- in part, but likely in response to the f.d.a.. they have been issuing a series of press releases and updated

guidance that have been specifically targeting flavored tobacco products and named juule as one of the largest provideers of the products and because of their marketing towards youth. >> commissioner: when we talk about juule stopping to sell this product, could these local stores, you know, for instance, that the president mentioned -- president adams, who are seeing a los of revenue, if juul seshgs the dominant provider and they stop selling the product, would that -- do we have a sense of what is the primary contributing factor of the loss of revenue? >> didn't you say you had smokin --

>> $60,000 for flavored tobacco. >> u a they had inventory that now is not sellable because they have made an investment in inventory which we outlawed, so they got stuck with it. and no transition to say you have an opportunity to dedeplete and they loaded up on it and were stuck with it because it was then illegal to sell it. >> okay. let's talk for a minute about the $200 a day loss. and my eyes were drawn from that with a small simple set. i picked that because it was the smallest reported but we don't have an economic impact study