Key Points
1 | U.S. Market
The U.S. nicotine market entered a rebuilding phase driven by regulatory compliance.
2 | Nicotine Pouches
Nicotine pouches rapidly evolved from a regional niche into a global mainstream category.
3 | EU Regulation
Even without finalized rules, the EU tightened market access through taxation and national measures.
4 | Regulatory Philosophy
Global nicotine regulation fragmented, with parallel paths replacing a single consensus.
5 | Disposable Vapes
Disposable vapes became regulators’ entry point as accountability replaced product-based oversight.
6 | PMI Transition
Big Tobacco’s smoke-free transition moved into a phase of structural certainty.
7 | China Regulation
China accelerated regulatory upgrades, strengthening compliance across manufacturing and exports.
8 | Capital Involvement
Capital reshaped competition, shifting advantage from products to system-level capabilities.
9 | Age Verification Technology
Technology reframed the flavor debate, pushing regulation toward science-based governance.
2Firsts, January 14, 2026
For the global nicotine industry, 2025 was the most complex year it has experienced to date. Nearly all established rules, conventions and development paths were subjected to reassessment, dismantling and reconstruction. New forces and new rules began to emerge, seeking to move into the mainstream, while established players showed little willingness to cede ground. The coexistence of old and new, and the tensions between them, produced a world marked by unprecedented complexity and volatility.
This was a state of flux. Yet history suggests that such moments of disorder are often how new eras begin.
As a global nicotine industry media and consultancy platform, 2Firsts has drawn on long-term, sustained reporting and industry observation to identify nine global events that proved most influential in 2025. These events are not presented as a simple list. Viewed through the lenses of regulation, markets, capital, technology and industrial structure, they reveal the deeper transformations underway in the global nicotine industry—and offer early contours of what may come next.
Event 1 | A Fundamental Shift in the U.S. Market: From Grey-Zone Growth to Compliance Rebuilding
The changes that reshaped the U.S. nicotine market in 2025 did not stem from a single policy decision or a one-off enforcement campaign. Instead, they reflected a parallel restructuring of regulatory logic and market operations. High-intensity enforcement moved from episodic action to a standing feature of oversight, extending beyond products themselves to logistics, distribution and financial flows. Non-compliant business models were systematically removed, and growth strategies built on regulatory grey areas steadily lost viability.
At the same time, the role of the Premarket Tobacco Product Application (PMTA) evolved. Review timelines accelerated and regulatory signals became clearer. Rather than serving primarily as a barrier to market entry, PMTA increasingly functioned as a framework for rebuilding market order through predictable review processes and ongoing oversight. The FDA’s plan to convene a PMTA roundtable for small businesses in early 2026 further reinforced this institutional approach.
Diverging state-level regulations also reshaped the market’s structure. As individual states introduced differentiated compliance requirements, the U.S. market shifted from a relatively unified national landscape toward a patchwork of state-based regimes. Compliance capability and resource allocation emerged as decisive competitive variables.
Market outcomes followed. Some established brands experienced temporary supply disruptions due to regulatory pressures, while new entrants moved quickly to fill emerging gaps. “Made in the USA” and “U.S.-based e-liquids” evolved from marketing slogans into concrete compliance thresholds, accelerating the localization and traceability of supply chains. Juul’s passage through the PMTA process carried symbolic weight, underscoring that the regulatory objective was not industry liquidation, but the reconstruction of market order.
As 2026 begins, the United States has reasserted itself as a market where compliance determines survival—and, in doing so, continues to shape the standards and direction of the global nicotine industry.
Event 2 | Nicotine Pouches Go Global: From Regional Product to Mainstream Category
The transformation completed by nicotine pouches in 2025 was defined not only by rising sales, but by the simultaneous establishment of regulatory legitimacy and industry consensus. Early in the year, ZYN secured U.S. PMTA authorization, marking the first time nicotine pouches passed one of the world’s most stringent market authorization regimes and gained a clear, durable legal footing in the United States. Later in the year, the authorization of on! PLUS confirmed that the regulatory pathway was shifting from isolated approvals toward a more continuous release process.
This regulatory milestone quickly reshaped strategic priorities across the global tobacco sector. Multiple international tobacco companies identified nicotine pouches as a core growth driver in earnings disclosures, while accelerating mergers, capacity expansion and international rollouts. The U.S. emerged as the primary volume engine, with brands such as ZYN and VELO Plus recording sustained growth. Revenues from nicotine pouch businesses at listed companies rose sharply, reinforcing confidence in the category’s long-term potential.
Expansion was no longer confined to traditional Western markets. In 2025, China National Tobacco made its first substantive entry into the nicotine pouch segment, launching products and initiating trial sales and channel testing in international markets. The move introduced new supply dynamics and sent a strong industrial signal regarding the category’s global trajectory.
With legality, scale and industry consensus converging within a single year, the nicotine pouch value chain heated up rapidly in 2025. Raw materials, manufacturing, branding and distribution expanded in tandem, while capital flowed in at pace, with signs of overheating emerging in certain segments. As 2026 unfolds, the central question facing nicotine pouches is no longer whether they can become mainstream, but how the category will rebalance compliance, capacity and market tempo amid rapid expansion.
Event 3 | EU Regulation Enters a High-Stakes Phase: Rules Unsettled, Space Tightening
In 2025, the European Union had yet to finalize a unified legislative framework for novel tobacco and nicotine products, but market conditions had already shifted in material ways. While revisions to the Tobacco Products Directive (TPD III) remained under discussion, regulatory pressure did not pause. Instead, it was released through a combination of tax reform, member-state legislation and overlapping policy tools, resulting in a steady tightening of the operating environment.
Taxation emerged as the most binding—and fastest-moving—instrument of alignment. Through revisions to the Tobacco Excise Directive (TED), the EU for the first time brought e-cigarettes, nicotine pouches and heated tobacco into a single tax discussion. Even before legislation was finalized, tax policy began shaping market expectations, prompting early adjustments to pricing structures, demand patterns and corporate pricing strategies.
Slow progress toward harmonized rules accelerated unilateral action at the member-state level. A growing number of countries introduced bans, restrictions and tax hikes, deepening regulatory divergence and testing the cohesion of the EU single market. For companies, the European operating environment shifted from regulatory ambiguity to a state of parallel governance marked by heightened uncertainty.
Regulatory debates also became increasingly politicized. Youth protection, environmental impact and fiscal considerations dominated policy narratives. Scientific evidence continued to be cited, but more often in support of predetermined policy objectives than as a basis for consensus-building. In this context, administrative measures and non-legislative instruments gained outsized influence.
As compliance costs and tax burdens moved to the front of market entry considerations, Europe’s novel tobacco market accelerated into a phase of high compliance and stock-based competition. Disposable products faced structural exit pressure, and market concentration increased. As 2026 approaches, the key variable is no longer whether regulation will tighten, but how competing rules will ultimately crystallize through political negotiation.
Event 4 | Global Regulatory Philosophies Diverge: Parallel Paths Replace a Single Answer
In 2025, global debates over the regulation of novel nicotine products failed to converge on a shared direction. Instead, clearer lines of divergence emerged. As e-cigarettes, heated tobacco and nicotine pouches spread rapidly across markets, governments increasingly pursued parallel but opposing regulatory approaches shaped by differing risk perceptions, policy priorities and enforcement tools.
At the core of the divide lies the question of whether different nicotine products should be distinguished by relative risk. One camp argues that regulatory frameworks and public communication should differentiate between combustible and non-combustible products to support adult smokers’ transition to potentially lower-risk alternatives. The opposing view holds that emphasizing risk differentials risks undermining tobacco control objectives or introducing new public health challenges. This divide directly influences decisions on product authorization, flavor policy and information disclosure.
Regulatory logic also split along lines of emphasis. Proponents of differentiated regulation prioritize product standards, market access, transparency and enforcement capacity, arguing that systematic governance delivers better long-term outcomes than blanket bans. Advocates of unified control stress precaution, youth protection and insulation from industry influence, placing potential harm reduction benefits in a secondary position.
Differences in enforcement capacity, research infrastructure and regulatory resources further complicate the feasibility of a single global model. Whether high-intensity control regimes can be universally applied remains an open question, reinforcing fragmentation in policy pathways.
As 2026 begins, global nicotine regulation is unlikely to move in a single direction. Diverging views on risk and policy signaling will continue to shape national approaches, influencing market expectations and corporate strategy.
Event 5 | The Global Push Against Disposable Vapes: Regulation Shifts From Products to Responsibility
Disposable e-cigarettes became a focal point of global regulatory action in 2025, not because of a fundamental reassessment of their technical or risk profiles, but because they represented the lowest-cost and highest-consensus entry point for enforcement. Bans targeting this product category signaled a broader shift in regulatory logic—from assessing whether products comply, to determining whether responsibility can be clearly assigned when problems arise.
European and Commonwealth countries moved first. France, Belgium, the United Kingdom and New Zealand enacted bans on disposable vapes, citing rising youth use, environmental concerns and marketing practices. Compared with other nicotine products, disposables are easily identifiable and relatively simple to enforce against, making them an efficient test case for regulatory capacity.
Structural weaknesses inherent in the disposable model were simultaneously amplified. Short product lifecycles, fragmented supply chains and blurred accountability complicate after-sales oversight, recycling and enforcement. These characteristics increasingly conflict with regulatory priorities emphasizing traceability, corporate responsibility and sustained compliance.
Industry impacts followed. Disposable products with weak accountability exited the market at pace, while companies shifted toward reusable devices, controllable supply chains and clearer responsibility structures. Regulatory focus began to move beyond product form toward full-chain governance encompassing firms, distribution channels and end-of-life responsibility.
As 2026 approaches, the retreat of disposable vapes does not mark the end of regulation, but rather its deepening. Responsibility-based regulation is set to extend across additional product categories and business models, reshaping the structure and thresholds of the global e-cigarette market.
Event 6 | PMI Reaches a New Milestone in Its Smoke-Free Transition: A Decade of Investment Delivers Structural Certainty
For Philip Morris International (PMI), 2025 marked more than another incremental step in its transition toward smoke-free products. It represented a qualitative shift. After more than a decade of sustained investment, PMI’s smoke-free business moved from a strategy viewed as directionally sound but outcome-uncertain to a core operating segment validated across revenue, profitability and organizational structure.
The shift was first evident in the company’s revenue and profit mix. Smoke-free products continued to increase their share of total revenue and gross profit, growing at a markedly faster pace than traditional combustible cigarettes and achieving scale across multiple key markets. By 2025, smoke-free products were no longer a supplementary growth engine, but a primary driver of PMI’s overall earnings performance.
Profitability validation further strengthened the transition narrative. Management explicitly linked earnings growth to the performance of smoke-free brands such as IQOS and ZYN, easing market concerns over the sustainability of the strategy. What had once been treated as a long-term bet increasingly resembled a business with predictable returns.
Product strategy also took on greater structural significance. PMI reduced reliance on any single technology pathway, advancing heated tobacco and nicotine pouch products in parallel to mitigate dependence on individual markets or formats. This multi-category approach further dispersed transition risk.
Organizational changes reinforced the signal. PMI announced plans to restructure its financial reporting beginning in 2026, elevating smoke-free products to a top-tier business segment. Smoke-free products moved from a transformation initiative to a central pillar of the company’s long-term strategy. As 2026 begins, PMI’s transition—emblematic of broader industry shifts—has moved beyond uncertainty and into a phase of structural consolidation.
Event 7 | China Launches High-Level Crackdown on Tobacco-Related Violations: E-Cigarette Regulation Enters a Systemic Upgrade
In December 2025, China significantly escalated enforcement against tobacco-related violations. Beginning with directives issued at the State Council level, enforcement actions, industrial policy measures and institutional regulatory tools were rolled out in rapid succession. An e-cigarette regulatory framework first established in 2021 entered a new phase of more comprehensive and systematized upgrading four years later.
Regulatory signals first emerged from top-level policy direction. A State Council executive meeting called for “full-chain crackdowns on tobacco-related illegal activities,” elevating enforcement to a national priority. This was followed by guidance from the General Office of the State Council, further tightening enforcement measures and explicitly placing e-cigarettes within a stricter regulatory and enforcement framework.
Industrial policy moved in parallel. Toward year-end, the State Tobacco Monopoly Administration tightened controls over e-cigarette production capacity and investment, prohibiting new manufacturing projects, stabilizing approved capacity and accelerating the exit of non-compliant or inefficient producers. Export compliance and cross-border enforcement were also strengthened, extending regulatory oversight beyond the domestic market.
Institutional transparency marked another key development. Regulators released the first comprehensive report on the state of e-cigarette regulation, detailing regulatory architecture, enforcement outcomes and governance logic, while for the first time systematically outlining international cooperation and cross-border regulatory priorities. This enhanced the external evaluability of China’s e-cigarette regulatory regime.
The regulatory push continued into early 2026. Authorities proposed the establishment of a corporate credit management system for e-cigarette companies, linking compliance records to regulatory intensity and shifting oversight from campaign-style enforcement to long-term, tiered governance. Meanwhile, oral nicotine products such as nicotine pouches were formally brought under the tobacco monopoly framework, closing longstanding regulatory gaps and clarifying oversight boundaries. Fiscal authorities also removed export VAT rebates for e-cigarettes, signaling a push toward more sustainable international market participation.
Characterized by top-down initiation, rapid execution and the parallel deployment of enforcement, industrial policy and institutional tools, the regulatory upgrade positions China—one of the world’s most critical nicotine manufacturing and supply hubs—as a decisive force shaping global compliance dynamics and future market structure.
Event 8 | Capital Deepens Its Role in the Nicotine Industry: Competition Shifts From Products to Systems
In 2025, capital involvement in the global nicotine industry intensified, with investment focus shifting away from single breakout products toward multi-dimensional positioning across regulatory pathways, core categories, manufacturing capacity and capital market access. This shift is fundamentally reshaping the basis of industry competition.
Regulatory pathways increasingly became valued assets. Multinational tobacco companies moved to acquire products and firms still undergoing PMTA review, locking in future compliance optionality and treating regulatory approval itself as a configurable asset. Capital no longer waited for regulatory outcomes, but actively participated in shaping market order.
Investment around core categories accelerated in parallel. Nicotine pouches emerged as a primary capital focus, with mergers, acquisitions and capacity expansion targeting global scale-up. Capital strategies emphasized not just brand ownership, but control over key products and stable supply capacity amid faster regulatory release cycles.
Manufacturing capability and localized supply chains also drew heightened attention. In markets such as the United States, investments in domestic production increased, elevating manufacturing, formulation and supply-chain compliance from cost considerations to strategic assets.
Competition for capital market access intensified as well. Through listings, mergers and capital restructuring, companies sought to secure financing flexibility to support expansion and internationalization. Capital deployment shifted from isolated bets toward system-level configurations spanning regulation, products, manufacturing and financing.
As 2026 approaches, capital increasingly serves as the arbiter of long-term participation in the nicotine industry. Competitive advantage is moving away from product innovation alone toward capital allocation capability and system-level execution.
Event 9 | Age-Verification Technology Breaks the Flavor Deadlock: Regulation Shifts From Ideological Debate to Technical Governance
Debates over flavor regulation have long been among the most contentious and difficult issues in nicotine policy. On one hand, flavors are widely viewed as facilitating adult smokers’ transition to potentially less harmful alternatives. On the other, they are seen as carrying heightened appeal to minors. Traditional regulatory approaches have largely been confined to a binary choice between blanket restrictions and limited tolerance, offering little room for durable solutions.
In 2025, a new variable entered this long-standing impasse. As device-level and system-level age-verification technologies moved into regulatory consideration, policy focus began to shift away from whether products should be permitted to exist, toward whether underage access could be effectively blocked at the point of use. By introducing identity verification at device activation, continued use or purchase, technology offered an alternative governance pathway distinct from outright bans.
Regulators responded with their first clear signals of openness. In regulatory science policy documents, products incorporating age-verification mechanisms were explicitly identified as eligible for priority review, while non-tobacco flavors were assessed within a framework of “incremental public health benefit.” Technological capability and flavor attributes were no longer treated in isolation, but jointly evaluated within a broader risk–benefit calculus.
As 2026 begins, the significance of age-verification technology extends beyond the flavor debate itself. It signals a shift in nicotine regulation away from value-based confrontation toward governance grounded in technology and science. The next phase of interaction between regulators and industry is likely to center on which actors can genuinely embed risk-control capabilities into products and systems.
Outlook 2026
As 2026 unfolds, the world has not entered a more stable phase. In just the first two weeks of the new year, repeated political, economic and social shocks have challenged established assumptions and existing orders. For the global nicotine industry, 2026 is unlikely to be a year of simple continuation.
What unfolded in 2025 was not a series of isolated events, but a gestation period for structural change. The reshaping of regulatory logic, the emergence of core product categories, the deepening role of capital and technology, and the divergence of governance pathways are collectively laying the groundwork for the next stage of industry evolution.
As 2026 progresses, the seeds of change planted over the past year are continuing to take root. A profound reshaping of the global nicotine industry is no longer speculative—it is already emerging on the horizon.
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