The nicotine and tobacco market saw significant shifts in 2025, driven by new Food and Drug Administration authorizations, rising excise taxes, persistent illicit e-cigarette sales and heightened federal enforcement efforts. Together, these developments reshaped how convenience-store retailers, manufacturers and consumers navigated the category. Here are a few highlights from 2025 from behind the counter.
FDA authorizations
In January, the FDA issued marketing granted orders for 20 Zyn nicotine pouch products, marking the first nicotine pouch product to be authorized by the agency.
The products, each with two nicotine strengths (3 milligrams and 6 milligrams), include Zyn Chill, Zyn Cinnamon, Zyn Citrus, Zyn Coffee, Zyn Cool Mint, Zyn Menthol, Zyn Peppermint, Zyn Smooth, Zyn Spearmint and Zyn Wintergreen.
Zyn is produced by Swedish Match North America, which was acquired by Philip Morris International in 2022.
With the nicotine pouch segment continuing to expand, the FDA in September launched a pilot program that it said aims to ease the review process for premarket tobacco product applications (PMTAs) for nicotine pouch products.
Calling it a “significant” step forward, the agency said details of the program include real-time communication between the FDA and applicants and shorter review timeframes.
Excise taxes
In 2025, several states moved to increase tobacco and nicotine taxes to help address budget shortfalls, including Indiana.
Convenience-store retailers in the state saw a $2 per pack increase in the state cigarette tax, bringing the rate to just under $3 per pack. Indiana’s cigarette tax went from $0.995 to $2.99, which is a percentage increase of just over 200%.
In 2026, state tobacco and nicotine excise taxes will be considered, like every year, said David Spross, executive director of the National Association of Tobacco Outlets, Washington, D.C.
“However, several states have shorter sessions and focus their attention on non-fiscal matters that can alleviate some of the threats,” Spross said. “It is also an election year for state legislators, which will impact the length of state sessions.“
Illicit market
Alongside tax pressures, the illicit vape market in 2025 continued to remain a challenge—despite federal efforts to combat it.
Illicit vapes are top of mind for convenience-store retailers as they continue to hurt e-vapor sales, said Bonnie Herzog, managing director and senior consumer analyst at Goldman Sachs.
The prevalence of the illicit market will continue to weigh on the growth of the formal/tracked channel within vapor, Herzog said at CSP's Tobacco Plus Forum in September.
“Illicit e-vapor penetration is roughly 70% today, though we expect this to fall through 2035,” Herzog said.
To combat the illicit market, federal agencies have intensified enforcement actions.
The Department of Health and Human Services (HHS), through the FDA and Customs and Border Protection (CBP), seized 4.7 million units of unauthorized e-cigarette products with an estimated retail value of $86.5 million.
The raids were carried out in Arizona, Florida, Georgia, Illinois, New Jersey and North Carolina, the agencies announced in September. They said this was the largest-ever seizure of this kind.
The seizures were part of a joint federal operation to examine incoming shipments and prevent illegal e-cigarettes from entering the country, HHS said in a statement.
Legislative efforts
Lawmakers in 2025 also stepped up their efforts to combat the illegal vape imports.
In November, Sen. Martin Heinrich (D-New Mexico) announced that the Ensuring the Necessary Destruction (END) of Illicit Chinese Tobacco Act had passed the Senate and been signed into law as part of the fiscal 2026 agriculture appropriations bill.
The law gives the FDA authority to destroy adulterated, misbranded or counterfeit tobacco products, including unauthorized e-cigarettes imported from China, Heinrich’s office said in a statement.
“For too long, illicit e-cigarettes produced in the People’s Republic of China have been pouring into our country and threatening public health,” Heinrich said. “That’s why, as a member of the Senate Appropriations Committee, I worked hard to give the federal government clear authority to destroy these unauthorized e-cigarette products at the border, before they make it into our communities.”
On the federal level, Spross said the Trump administration’s crackdown on this illicit market is a welcome change of pace.
“Many are imported illegally and deliberately targeted to underage users with youth-appealing features like gummy bear flavors and gaming device screens,” he said.
To date, the FDA has authorized 39 e-cigarette products and devices. These are the only e-cigarette products that can be legally marketed and sold in the U.S.
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