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Campbell council revokes or suspends five tobacco‑retailer business licenses after police find flavored tobacco and illegal drugs
Summary
After Campbell police seized thousands of flavored‑tobacco items and, in one case, suspected psilocybin, the council revoked two business licenses, suspended another for 30 days and revoked an additional license after evidentiary hearings; staff said seizures documented illegal sales or hidden rooms at multiple smoke shops.
Campbell city staff and police told the council their inspections uncovered illegal products at multiple retail tobacco locations, including flavored tobacco items and, in one instance, psilocybin.
Rob Eastwood, the city's community development director, told the council officers found "psilocybin and flavored tobacco" and a hidden room at California Cigar and More No. 3 (2145 S. Winchester). "In total, they confiscated 2,274 flavored tobacco items and 120 psilocybin and cannabis products on the site," Eastwood said. Police described a forced entry earlier the same month and said the presence of those products constituted grounds for revocation under the municipal code.
The business owner who appealed told council he accepted responsibility for poor management and asked for leniency, calling the business his livelihood. "I'm just gonna take full responsibility...I'm just asking for another chance," the appellant said in his statement to the council.
After hearing staff and police testimony, the council voted to revoke the business license and uphold the revocation of the tobacco‑retailer permit for California Cigar and More No. 3 (roll call: four ayes, one abstention; motion carried).
In a separate case, staff reported a March 5, 2025 inspection at Hayes Downtown Smoke Shop (469 E. Campbell Ave) that produced over 4,900 seized flavored‑tobacco items and evidence of a concealed room. Council voted to revoke that business license (vote recorded in the transcript: motion carried).
A third site, Hayes Smoke Shop (2050 S. Bascom Ave), was the subject of contested motions: the business owner sought continuation and argued some seized products were wholesale inventory or FDA‑approved; staff and police described broken open cartons and packaging consistent with retail sales. The council discussed suspension vs. revocation and ultimately voted to suspend the business license and tobacco‑retailer permit for 30 days to allow the owner time to comply.
Staff also presented cases against Sage Smoke Shop and the business operating as Dreamy Exotics, describing multiple inspections and a plain‑clothes decoy purchase in one instance; the council revoked Dreamy Exotics' business license after deliberation.
Police testimony highlighted legal distinctions for the items found: a city police witness explained that psilocybin is a felony under state and federal law, while flavored‑tobacco sales violate California law and local code provisions designed to protect public health and reduce youth access. "In regards to the psilocybin, that is a felony in California," a police witness said.
Council members expressed mixed views: some favored revocation to enforce public‑health protections, others voiced sympathy for business owners and raised concerns about timing, notice and proportionality. Where appropriate, the council used the code's suspension authority rather than revocation.
Where revocations or suspensions were adopted, staff noted the effect on the tobacco‑retailer permit (revoked permits bar retail sales at that address and typically prevent a new retailer from obtaining a permit at the same location for at least one year).
