As the global nicotine and cannabis industries continue their transformation, 2025 is shaping up to be a pivotal year. Here’s what industry leaders need to know from the first half of 2025.
Regulatory Shifts: From Crackdowns to Clarifications
Regulatory pressure is shifting globally. In the US, the FDA withdrew its proposed menthol and flavoured cigar bans, but advanced a nicotine reduction rule for cigarettes, indicating a continued focus on harm reduction. Meanwhile, the US Supreme Court ruled in favour of e-cigarette companies, allowing them to challenge FDA decisions in local courts, potentially reshaping the regulatory battleground.
Across Europe and Australasia, countries like France, Belgium and Australia are tightening controls.
France has banned smoking in most outdoor public spaces, although the ban excludes café terraces and electronic cigarettes
This reflects growing public support for stricter tobacco control. Belgium removed tobacco displays from retailers, with more initiatives to control the retail channels where tobacco products can be sold. Australia introduced standardised cigarette designs for sticks and packaging, and even for filters, which now need to be the same across all products.
In cannabis-related regulation, the UN’s scheduling of HHC under Schedule II has sent ripples through the hemp-derived cannabinoid market, prompting countries to reassess legal loopholes. This new designation means that countries should restrict HHC and make enforcement efforts to eliminate its commercialisation. Notably, the US abstained from the vote, despite the growing popularity of hemp-derived cannabinoids in the US.
Meanwhile, the Netherlands launched its regulated cannabis experiment in a limited number of cities, and Colombia’s president renewed calls for adult-use legalisation. In Canada and the UK, regulators issued more explicit guidance on CBD and THC content, aiming to stabilise markets and protect consumers. All this signals a growing appetite for a legal cannabis market, with clear and streamlined regulatory frameworks.
Industry Trends: Illicit Markets and Hemp-Derived Momentum
Illicit e-vapour products now account for a staggering 76% of global volume, undermining legal market growth. In South Korea, youth e-vapour use has surpassed traditional smoking, raising alarms, especially as more synthetic nicotine products become available in online stores and unnamed street stores, with no age verification process. E-vapour in Brazil is also on the rise, especially in disposable e-vapour products imported into the country, despite a total prohibition.
Corporate Moves: Smoke-Free Strategies and Global Expansion
Philip Morris International (PMI) and British American Tobacco (BAT) continue to double down on reduced-risk products. PMI’s ZYN pouches continue to dominate the US market. Japan Tobacco International (JTI) launched the Ploom AURA device, expanding its footprint in heated tobacco in Europe and Asia.
Green Thumb Industries expanded retail operations in Ohio, and prepared for Minnesota’s adult-use launch. Canopy Growth and Tilray reported mixed results, with Tilray seeing strong international growth, especially in Germany. Meanwhile, Jones Soda exited the cannabis beverage space, selling its Mary Jones brand for USD3 million, while Aurora and Ontario Cannabis Store posted record revenues.
Macroeconomic Context: Trade Tensions and Growth Headwinds
Global economic uncertainty is casting a shadow over both industries. Real GDP growth is forecast to slow to 2.9% in 2025, down from 3.2% in 2024, amid US tariff hikes and geopolitical tensions. While Brazil and India show resilience, the Eurozone and UK face stagnation. These macro headwinds could dampen consumer spending and investment in emerging nicotine and cannabis markets.
Looking Ahead to H2 2025
H1 2025 has been a tale of contrasts: regulatory tightening in some regions, liberalisation in others, with booming hemp-derived innovation alongside illicit market challenges. For industry players, the message is clear – adaptability, compliance and innovation are non-negotiable. As the second half of the year unfolds, staying ahead of these trends will be key to capturing growth in an increasingly complex global landscape.
Read our article The Growth of Illicit E-Vapour in Latin America: Case Studies from Brazil, Colombia and Mexico for more analysis on the rise of illicit e-vapour products. Read the full report on the most important trend in the nicotine space in the report Top Five Trends in Nicotine.