Nearly 9 percent of stores statewide illegally sold to minors in 2011, that's up from 5.6 percent in 2010.
The report found that 18 to 24 year olds are now smoking more than any other age group in the state.
According to CDPH Director Dr. Ron Chapman, smoking has many health risks for the vast majority of smokers that continue the habit throughout their lifetime.
"Youth and young adults get addicted to tobacco, end up smoking their entire lives, and then they and their families suffer the health consequences," said Dr. Chapman.
The state projects it'll spend $6.5 billion this year to deal with adult health care related to smoking, that's $400 per taxpayer.
It's unclear why younger people are picking up the habit. But the study noted the prevalence of smoking was higher in schools within neighborhoods with five or more stores selling tobacco.
Smokeless products are becoming more and more popular with nearly 4 percent of high school students using them.
"The smokeless tobacco products are not safer," said Dr. Chapman. "The trends again are very concerning."
On a college campus, students said they smoked because they felt stressed juggling jobs and classes with rising tuition costs.
Most young smokers said they started smoking in high school.
Spencer Douglas said pressure is the number one reason he started smoking.
"School, trying to find a college, worrying about having enough money and then jobs, I have three jobs right now, so all of that was a lot of pressure on me," Douglas said.
Campaign for Tobacco-Free Kids has been critical of states like California for not spending enough of their 1998 multi-billion dollar settlement from tobacco companies on smoking prevention.
Lifelong smoker Keith Kimber, who also started in high school, agrees.
"I just don't think they're using the funds effectively enough as there is," Kimber said.
The state says for every dollar it spends on anti-smoking campaigns, the tobacco industry spends eight to attract more smokers.