By Timothy S. Donahue

Top Takeaway:

• Statewide cigar lounge license proposed: 2026 bills would allow qualifying cigar lounges to permit indoor smoking and BYOB alcohol under a new Class C license.
• Clearer revenue thresholds: Lounges would need 70% of revenue from premium cigars, while non-tobacco sales would be capped at 30%.
• Limits and opposition remain: Licenses would be capped by county population, sites near healthcare or childcare facilities would be excluded.

It’s back. Proposed legislation reintroduced in Maryland would create a new statewide license for premium cigar lounges, an effort supporters say would finally resolve years of legal ambiguity surrounding indoor smoking and alcohol consumption in cigar retail spaces.

House Bill 766 and Senate Bill 623, refiled for the 2026 session, would establish a new Class C–Premium Cigar Lounge license, allowing qualifying cigar lounges to permit indoor smoking and to allow patrons to bring and consume their own alcohol during specified hours, reports Charlie Minato of halfwheel. The bills follow a failed 2025 attempt and come after the Maryland Department of Health was directed in 2024 to convene a workgroup to study whether and how tobacconists should be permitted to hold alcohol-related licenses.

At the center of the debate is Maryland’s Clean Indoor Air Act, which currently exempts businesses whose “primary activity is the retail sale of tobacco products and accessories,” provided that sales of other products are merely “incidental.” Regulators and local governments have interpreted that language inconsistently, particularly regarding cigar lounges that allow BYOB consumption without holding a formal alcohol license.

The new bills would replace the vague “incidental” standard with a clearer revenue-based threshold: cigar retailers would be eligible to allow indoor smoking only if no more than 30% of their gross revenue comes from non-tobacco products. Although the legislation does not redefine what qualifies as a licensed tobacconist under Maryland law, it draws a firmer line on which businesses may legally permit indoor smoking.

The centerpiece of the proposal is the new cigar lounge license. To qualify, a business would need to generate at least 70% of its revenue from premium cigars, pipe tobacco, and related accessories; pay a $100 annual license fee; employ at least one staff member certified in an alcohol awareness program; and submit building plans demonstrating adequate air filtration and exhaust. Employees would also be required to acknowledge exposure to secondhand smoke as a condition of employment.

Under the license, customers would be permitted to bring and consume their own alcohol between 10 a.m. and 1 a.m. The bill is aimed, in part, at resolving legal gray areas for cigar lounges that already advertise themselves as BYOB but operate without explicit statutory authorization.

However, the legislation includes significant geographic and numerical limits. Lounges located adjacent to licensed healthcare facilities or childcare centers would be barred from obtaining a license. In addition, counties would be capped at one cigar lounge license per 150,000 residents.

Thirteen of Maryland’s 23 counties fall below that population threshold, so only a single license could be issued countywide. Montgomery County, the state’s largest, would be eligible for up to eight licenses based on current population estimates.

The 2026 proposal differs notably from last year’s version. The 2025 bills would have grandfathered existing cigar lounges, imposed a much higher $2,000 annual license fee, and failed to establish the 70% tobacco-revenue threshold tied to Clean Indoor Air Act compliance. None of those provisions carried over into the current legislation.

Glynn Loope, director of state advocacy for the Premium Cigar Association, submitted written testimony in support of the bills, arguing that a uniform statewide license would replace uneven county-by-county enforcement.

“Although current law permits Maryland tobacconists to apply for alcohol licenses, county regulation of existing lounges has been inconsistent,” Loope wrote. “A statewide license would provide regulatory clarity and uniformity for a limited number of new lounges.”

Opposition remains strong. The Maryland Department of Health, multiple anti-smoking advocacy groups, and the Restaurant Association of Maryland opposed the 2025 version of the bill, which stalled in committee despite six co-sponsors. The reintroduced 2026 bills, again sponsored by Del. Andre Johnson Jr. and Sen. Ron Watson, have three co-sponsors combined.