The nicotine and cannabis markets continue their evolution and are expected to reach a combined USD1.2 trillion in value by 2029. It becomes critical to separate the noise from actionable insights to clarify which strategies are helping companies and countries worldwide capture opportunities. This report aims to highlight the central issues in the industry, informing equitable conversations and strategies.
Delivery
This report comes in PPT.
Key stories
Regulatory updates
Regulatory pressures continue to compound in the nicotine space, with many tobacco control initiatives focusing on accessibility and visibility of tobacco products. However, there are some cases where harmonisation has legalised specific markets and potential pulls towards deregulation or less strict government involvement, as is the case in the US. In cannabis, there are still efforts for reform, including legalisation and experimentation around access models.
Market updates
The nicotine market continues to expand beyond combustion and face challenges from illicit markets, both in traditional combustion categories, but even more in illicit or non-compliant e-vapour products. A second wave of illicit RRP products could further complicate the situation. For the cannabis industry, market development continues its steady but sure progress with more consumers and markets and clearer rules for the market.
Corporate updates
Tobacco companies experienced positive performance, driven by both combustion products and developments in RRP products worldwide, with nicotine pouches and HTP being the primary growth engines. In the cannabis industry, the most important companies reported positive, albeit tempered, performance, signalling a cooling cannabis landscape. There is, however, renewed interest in the hemp-derived market in the US.
Macroeconomic updates
US tariff hikes and trade policy uncertainty are complicating the global economic outlook, which is projected to see real GDP growth slow to 2.9% in 2025 and 2026, down from 3.2% in 2024. Trade tensions are dampening business and consumer confidence. A pessimistic scenario could reduce growth by 0.6 percentage points in 2025, while tariff easing could increase it by 0.2 percentage points.
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Key stories
Nicotine industry performance resilient despite gradual volume decline in cigarettes
NEW in Passport: Illicit/non-compliant e-vapour added for total e-vapour sizing
Adult-use category is the driving force behind the global legal cannabis market
FDA to launch pilot to streamline PMTA process for nicotine pouches
Regulatory shifts: New bans and visibility restrictions in tobacco and vaping
More aggressive product bans continue to emerge
Global regulatory pressure increasing
Modernising tobacco taxation in the EU: Key 2025 reforms
Sharp taxation increases continue to drive the price of combustion products
Illicit market continues to thrive despite strict regulatory environment
Global industry continues to undergo transformation.
Ongoing product innovation is steadily transforming the RRP landscape.
Manufacturers and retailers focus on technology, convenience and availability
PMI enjoys positive performance from RRP portfolio
BAT doubles down on investments and innovation
JTI expands RRP efforts in its priority markets
Other company developments
Other company developments (cont.)
The US reschedules cannabis in a major industry change
Whiplash from too much legalisation?
Europe continues a mixed approach to cannabis regulation
Positive momentum in the cannabis market
Modest growth for core industry players with US tailwinds
Portfolio and geographic expansion continues
Global growth shows resilience, with fragile outlook due to market volatility
Key country insights
Real GDP annual growth forecasts and revisions from last quarter: AE
Real GDP annual growth forecasts and revisions from last quarter: EMDE
Inflation forecasts
Global scenario map: Trade-related uncertainty dominates the risk landscape
Key stories
Our experts’ views of key developments so far in 2025
Tobacco
Passport Tobacco covers the seven major tobacco categories: Cigarettes, Cigars & Cigarillos, Smoking tobacco (made up of Pipe tobacco and RYO tobacco), Smokeless Tobacco (snuff and chewing tobacco), E-Vapour Products (closed and open); Heated Tobacco; and Tobacco Free Oral Nicotine. Smoking paraphernalia such as pipes, rolling papers, lighters or matches, etc., are not included, nor are nicotine replacement therapy (NRT) products, which are part of Euromonitor's Passport Consumer Healthcare database.
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