"However it's becoming increasingly clear from both research and local observations that these legal products are actually harmful substances ... 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 Mr Dunne and the Government to take prompt and decisive action to review existing legislation.
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.
The draft policy will be subject to a public consultation programme starting next week.