In its letters to the retailers, the ministry did not specify which aspects of the LAPP it believed were being breached but the stores are fewer than 300m apart and one is near a place of worship.
When the LAPP was adopted last year, the owner of the Heretaunga St store, Steve Batty, said he was looking for alternative CBD premises that complied with the policy.
Hastings Mayor Lawrence Yule said yesterday the licence suspensions showed tougher laws were having an impact.
"We've had a lot of public concern [about the drugs]; most people would like them banned.
"The Government has passed legislation that doesn't ban them on the basis that the regulations are being tightened up.
"We're one of the first councils in New Zealand to adopt a policy around this and the ministry is now acting on our policy." Hastings district councillor Sandra Hazlehurst, a staunch campaigner against the drugs, said the shop closures were "very exciting" news but the council would continue fighting for a law change to ban psychoactive substances altogether.
"This is a good step in the right direction but not, overall, the best outcome yet. We're working on that."
She said the stores had the option of moving to sites that meant they complied with the LAPP "but there are a lot of churches, schools and early childhood centres within our CBD so I'm hoping there won't be too many places available for them".
Napier's only licensed legal-high retailer remained open and was busy yesterday. The city had a similar LAPP in place but the store was believed to be meeting all the required conditions.
Napier Mayor Bill Dalton said he would be "more than concerned" about an increase in "undesirable types hanging around in the CBD" due to former customers of the Hastings stores buying drugs in Napier.
The city's legal-high store was already having "a negative effect on our respectable retailers", he said.
"That's the last thing we want and we need to deal with it. We'll take whatever necessary action we're allowed to take to try to protect our retail centre."
The owner of the closed Karamu Rd store, Gordon Arcus, said his Napier competitor's business would surge.
"They [Hastings drug buyers] will beg, borrow or steal a car to get to Napier."
Mr Arcus said he would take legal advice over the temporary licence suspension but he believed it was "a given" that his licence would be cancelled after the interim assessment period.
He described the suspension as "a Kremlin-type directive".
"I've done my best to comply with the law and in my view the council is just doing a Vladimir Putin," he said.
