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Tuesday, Mar 5, 2024

Taking a Hit

Shirin Jafari sat at a table across from the bar at the Blue Café, music humming softly in the background of the dimly lit lounge as less than a dozen patrons shared an evening meal and smoked flavored tobacco from their hookahs. Jafari, owner of the decade-old Persian restaurant and hookah bar in Tarzana, looked around her near-empty business and sighed. “As you can see, right now we’re not doing that great,” she said. “This is usually the time when hookah bars have a lot of business because everybody is out of school. … We should be booming right now. But with this new law there’s been a 40 percent drop.” She is referring to California’s recent anti-tobacco bills that were enacted this month restricting adults from purchasing and smoking tobacco until the age of 21. State legislators said the laws will limit smoking at a young age, saving the health care system millions of dollars as a result. Many small businesses, such as smoke shops and hookah establishments, have taken a hit since the laws took effect June 9. The four measures approved by California lawmakers raised the smoking age to 21 in addition to further regulating e-cigarettes, expanding smoking-free zones and increasing the cigarette tax. The new regulations make California the second state to raise the smoking age to 21, following Hawaii. “Right now we’re trying to weather the storm to see how this will all play out,” said Alex, manager of Northridge’s Social Lounge who preferred not to disclose his last name on the record. Alex said the hookah lounge, located on Dearborn Street around the corner from California State University, Northridge, has seen as much as a 40 percent decline on weekends. “Our demographic is pretty crazy,” he added. “It goes anywhere from 18- to 30-year-olds because the vibe here is pretty chill. But the majority of our customers are between 18 and 24.” After-meal smoke According to the National Survey on Drug Use and Health, more than 95 percent of Americans begin smoking tobacco before the age of 21. And according to a study conducted by the World Health Organization, a one-hour hookah session can amount to 100 times the amount of smoke inhaled from one cigarette. Hookahs, also called water pipes, are instruments that give tobacco smoke a flavor. The shisha – tobacco mixed with a flavoring such as honey or molasses – is placed in a bowl at the top of the instrument and heated with coals, causing it to smoke. The smoke is filtered through water and users inhale it through a long hose. Hookah smoking has gained popularity in the United States among young adults for the past decade and is a common practice for college students. Its roots stem from ancient Persia and India during the 18th century, and it has found a market in the United States, Britain, France and Russia, according to the American Lung Association in Chicago. “I would say about 90 percent of hookah lounges are owned by Middle Eastern families,” Anahid Arakelian, a former hookah lounge owner in Orange County told the Business Journal. “Traditionally hookah is meant to be enjoyed after a meal in the Middle East … and these owners will usually do some interesting things with (their hookah).” Arakelian owned a hookah establishment in the 2000s before selling it in 2014. She said it was a very difficult business to navigate. “It’s a hard business. … If you don’t find a bar then you have to find a space and get a conditional use permit to turn a space into a bar,” she explained. “From city to city, there are different regulations and some places are more welcoming in their nature than others. Like I said, they might interpret the state law differently in every city – which is why there is a proliferation of hookah lounges in Huntington, in Tustin and Anaheim in Orange County.” Despite many young adult’s belief that hookah use is less dangerous and addictive than cigarettes, the American Lung Association says many of the same cancer-causing chemicals in regular tobacco can be found in hookah shisha. “Like many tobacco products, use of these pipes is linked to lung cancer and other respiratory and heart diseases,” the organization wrote in its 2007 report on hookahs. “Water pipe tobacco smokers are exposed to cancer-causing chemicals and hazardous gases such as carbon monoxide. Water pipe users are also exposed to nicotine, the substance in tobacco that causes addictive behavior.” Business model shift Establishments that relied heavily on the 18- to 24-year-old crowd prior to the new laws will need to reinvent their business model to stay afloat. “We have the beer and wine, so we do still appeal to the 21 and over crowd,” Jafari, owner of the Blue Café, said. “But as for the other lounges that just have hookah and food, the law has been pretty drastic for them and they’re not doing too good.” The Hookah Source, a lounge that targets college students in Northridge, is feeling the effects of the loss of customers. The nighttime hangout is underground and provides flat screen televisions, pool tables and other activities in addition to hookah in hopes of catering to a younger demographic. Manger Josh Rose said upping the legal smoking limit was somewhat of a death sentence for the old business model, so a new one must begin. “Being next to a college was a big draw for us. … (but) We’re now losing out on the 18- to 20-year-old market,” he said. “That helps us to reinvent ourselves as well as target a more mature audience, and that’s OK too.” Arakelian believes hookah businesses could benefit from having a more mature customer base. The more sophisticated lounges that attract an older demographic sell food and liquor, in addition to hookah, she said. “(Targeting) the 21-and-over crowd is a very good thing that’s happening in the industry. The 18- to 21-year-olds were not very responsible with the hookahs, yanking the hoses, dancing with them in hand. There was also this discrepancy because you could not sell alcohol and hookah at the 18 and up establishments. If you want to increase profits, you want to sell alcohol.” The drawback to selling hookah, food and alcohol is the regulatory maze owners must navigate for legal permission to operate. Also, the owner must clear zoning requirements for a particular location, permits needed to sell all three products and capital needed to build a kitchen. “I call it the Holy Trinity of hookah,” Arakelian said. “If you have hookah, food and alcohol – you have it made.”

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