City attorney outlines state revenue risk if council expands complimentary alcohol ordinance to cigar or hookah lounges

The council discussed whether to amend Cairo’s complimentary-license ordinance to allow cigar lounges and hookah establishments to provide complimentary alcoholic beverages without a sales license.

The city attorney explained that the city may amend its ordinance but that the Georgia Department of Revenue treats free distribution of alcohol differently in some cases. "If somebody walks in off the street and says, 'Hey, can I have some?' you can't tell them no," the city attorney said, summarizing the Department of Revenue’s approach as described in outside-city guidance. The attorney advised council members that some municipalities have allowed cigar bars to operate under complimentary-license language without problems, while others have faced Department of Revenue enforcement if the free distribution is effectively open to the public.

Council members asked whether a hookah lounge would need special definition or regulation. The attorney noted state clean-air and age-restriction laws apply and that some cities carve out specific exemptions for cigar bars and hookah lounges. The attorney recommended drafting specific ordinance language and returning it to a future meeting rather than taking immediate action.

Why it matters: Expanding the complimentary-license ordinance would change which local businesses may offer complimentary alcohol. City staff cautioned the council that state-level enforcement actions by the Department of Revenue are beyond local control and could expose a business to state fines even if the city permits the practice.

The council asked staff to draft ordinance language and bring it back for consideration at a subsequent meeting.