What Is an OTP License? Here's What You Should Know

A group of male and female friends smoking at a hookah bar that has an OTP license.

The regulations governing the tobacco industry are stringent, to say the least. If you are looking to open a distribution company or even a retail location, there are important tax and licensing considerations you should be aware of.

Simply put, a license is a mandatory requirement for any importer or manufacturer wishing to sell, import, or distribute cigarettes and other tobacco products within the United States. Although the requirements are different than cigarettes, it is imperative to the licensing and taxing requirements remain strict for other tobacco products (OTP). Having said that, here is what you need to know about other tobacco products and OTP licenses.

What Qualifies as OTP?

Put simply, other tobacco products (OTP) are products that include smokeless and non-cigarette materials. Some good examples of other tobacco products include:

  • Chewing/spot tobacco: Often smokeless, the body ingests spot tobacco by placing a portion of the tobacco between the cheek and gum and chewing.
  • Loose tobacco: Also known as pipe tobacco, loose tobacco consists of cured and dried leaves. Users hold the pipe smoke in the mouth and exhale it without inhaling it into the lungs.
  • Blunt wraps: Consumers fill these hollowed-out tobacco leaves with tobacco.
  • Snus: This is a type of smokeless tobacco that comes in different flavors. Users cancel it easily because it doesn't require spitting.
  • Little cigars/cigarillos: Typically contains tobacco wrapped in a tobacco leaf.
  • Hookah: Also known as shisha, hookahs are long pipes that contain burned pipe tobacco and other spices. As such, people tend to suck the smoke through water and out the hose pipes.
  • Dissolvables: These consist of dried, crushed, flavored tobaccos. They dissolve quickly in the mouth after ingestion.

Who Issues OTP Licenses?

It is worth noting that the tobacco industry is highly regulated, and as a manufacturer, you are required to obtain a license for importing, selling, and manufacturing tobacco and other tobacco products (OTP).

Typically, manufacturers of cigarettes and other tobacco products (OTP) are required by law to acquire a federal license from the Alcohol and Tobacco Tax and Trade Bureau (TTB). Additionally, you should also ensure that you obtain a local license from the state where the OTP products are manufactured, imported, sold, or distributed from. You need to obtain a license for your tobacco products since you cannot sell any of those products without a valid Cigarette and Tobacco license.

OTP License Regulations

Various licensing laws highly regulate the manufacturing and distribution of other tobacco products (OTP). Firstly, it is imperative for you to obtain a license before manufacturing or selling any tobacco products.

Once this occurs, the law clearly stipulates that as a license holder, you have the following responsibilities:

  • You must display your license at the licensed location in a manner that is visible to the public.
  • You should complete legible purchase invoices for your tobacco products for at least four years.
  • Store the purchase invoices in the location that appears on your license for the first year after obtaining the license.
  • You must allow law enforcement agencies and Board staff to review the invoices upon request.

In addition to the above responsibilities, the law also requires you to keep records and other materials related to your manufacturing or purchase of tobacco products.


Once you obtain a license for your other tobacco products (OTPs), the next step is ensuring that you strictly abide by the renewal rules. Renew tobacco license annually and promptly before your license expires. If you delay, you pay a reinstatement fee in order for your license reinstatement. Remember, you cannot manufacture or purchase other tobacco products during the period before reinstatement since you lack a valid license. Luckily, this unfortunate situation is avoidable if you ensure that you promptly renew your license as required by law so that your business can run smoothly without any hitches.

Do not hesitate to contact us today for more information on tobacco and other tobacco products (OTP). Similarly, book an appointment with us today by calling our toll-free line: 888-628-0334.