A federal judge has denied the injunction that would have stopped the city from enforcing an ordinance limiting the number of smoke shops allowed in each district.
This latest ruling is temporary, as the lawsuit against the ordinance still has to go to trial, which is set for January of 2027.
The ordinance states there can be a maximum of seven smoke shops in each of the seven districts for a total of 49 businesses throughout the city.
There are currently more than 120 such businesses in Fresno, meaning nearly 60 percent of them need to close.
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The California Smoke Shops Association filed a lawsuit, as it represents 28 local owners. They argue the ordinance violates its members' right to equal protection under federal and state laws.
The association also says parts of the ordinance are unconstitutionally vague.
A judge ruled last Thursday that the association failed to show irreparable harm for a temporary block.
They said enforcement of the ordinance also serves public interest.
Fresno's Police Chief Mindy Casto backs the effort to limit smoke shops, which she calls "a magnet for crime" that drains resources.
"We've had everything from murders and attempted murders down to just the loitering, where again, people don't feel safe when people are loitering at a location, not up to any good, that's unfortunately what they attract," Casto said.
The ordinance was passed in April following raids at dozens of Fresno smoke shops, where authorities said they found tens of thousands of dollars worth of illegal products.
Despite the legal challenges, the ordinance went into effect in June.
Licensed smoke shops can operate for 18 months as long as they are up to code with the new city rules.