Rotorua mayor Steve Chadwick wants the government to review legislation around psychoactive substances and give councils the power to implement an outright ban on their sale.
In a letter sent to the Associate Minister of Health, Peter Dunne, Mrs Chadwick described current legislation as "manifestly inadequate."
"Rotorua District Council wants the government to let local communities decide whether or not to allow the sale of so-called legal high products in their cities and districts," she said.
Mrs Chadwick said her council was concerned that the current legislation had been introduced without local government consultation, despite councils' regulatory roles and the potential impact on local communities.
She said the Productivity Commission's recommendation that central government should collaborate with local government on such legislation had been ignored.
"We do understand that the government now requires psychoactive substance products to be licensed and that the intention was to allow only less harmful products to be legally sold.
"However It's becoming increasingly clear from both research and local observations that these legal products are actually harmful substances - in many more ways than just the impact they have on users and people around them.
"There is also a substantial social cost to our wider community, along with a significant ongoing financial cost to ratepayers in dealing with associated regulatory, compliance and enforcement matters.
"Our council is of the view that we're dealing with an escalating problem with the potential to impact seriously on the health, safety, welfare and financial wellbeing of our community. It's an untenable situation," Mrs Chadwick said in her letter to Mr Dunne.
She urged the associate health minister and the government to take prompt and decisive action to review existing legislation.
Local communities should be given the power to decide whether to allow or ban the sale of psychoactive substances within their respective local authority boundaries, she said.
Last month Rotorua District Council adopted a draft Local Approved Products Policy on the sale of psychoactive substances, in accordance with government legislation.
When enacted the policy would place stringent restrictions on the location, density and number of licensed premises permitted to operate in Rotorua district, to the extent that the legislation allows. However the council cannot completely ban the sale of legal high products in its district.
Rotorua District Council's draft policy on the sale of psychoactive substances will be subject to a local public consultation programme starting next week.