From corner-store side hustle to a seven-year offence: how illicit tobacco and vapes became one of the most heavily policed areas in NSW For a long time this was treated as a fines problem. A shop sold something it should not have, an inspector attended, a penalty notice was issued, and business continued. Anyone still working on that assumption is dangerously out of date. In NSW today, selling illicit tobacco carries a maximum of seven years imprisonment and a fine exceeding $1.5 million, shops are being shut down by order in batches, and from 2026 the landlord who let the premises can be prosecuted too. If you run a tobacconist or convenience store, work behind the counter at one, own a commercial property leased to one, or have been told by police or NSW Health inspectors that they want to speak with you, the exposure here is far larger than most people assume - and it is no longer confined to the person who owns the business. What the penalties actually are now NSW Health sets out the current position in its penalties and enforcement guidance. From 3 November 2025, penalties were substantially increased. Selling illicit tobacco now carries a maximum penalty of seven years imprisonment, a fine of $1.54 million, or both. Possessing a commercial quantity of illicit tobacco carries the same maximum. Below that sit a series of further offences. Selling tobacco or non-tobacco smoking products without a licence carries a maximum of $660,000 for an individual and $880,000 for a corporation. Falsely claiming to hold a tobacco licence carries a maximum of $880,000. There are also newer offences covering resisting seizure and attempting to retake seized products. On-the-spot fines remain available to inspectors for a range of matters. NSW Health describes these as among the highest penalties of any Australian state or territory for the sale of illicit tobacco and illicit vaping goods. That is not marketing language. A seven-year maximum places these matters squarely in indictable territory, alongside offences most people would regard as far more obviously criminal. Closure orders: the consequence that arrives first For most operators, the immediate problem is not the prosecution. It is the shutdown. The reforms allow the NSW Health Secretary or a delegate to issue short-term closure orders of up to 90 days, and the Local Court to issue long-term closure orders of up to a year, for businesses selling illicit tobacco, illegal vaping goods, or trading without a tobacco licence. These are being used at scale. As at 26 June 2026, NSW Health had issued 321 short-term closure orders since 3 November 2025, with 162 still in force. A 90-day closure will end most small retail businesses regardless of what happens in court afterwards. There are also offences attached to the orders themselves. As NSW Health has set out in its announcements on the reforms), there are new offences and penalties for breaching closure orders, including for entering closed premises or selling products from closed premises. Attempting to keep trading through a side door, a QR code or a messaging app after a closure order is not a workaround. It is a fresh offence, and the government has publicly said police and Health are specifically targeting exactly those methods. The landlord offence: new, and widely underestimated This is the change that has caught the most people by surprise. The Public Health (Tobacco) Amendment (Landlord Offences) Act creates an offence for commercial lessors who knowingly permit premises to be used by tenants to sell illicit tobacco and illegal vapes. It carries a maximum penalty of one year imprisonment, a fine of $165,000, or both. The offence is aimed at landlords who are aware of what a tenant is doing and, instead of notifying the authorities or taking steps to evict, knowingly permit the activity to continue. Landlords have also been given new lease termination powers where a closure order is in place. The critical word is knowingly. A landlord who genuinely had no idea is not caught. But knowledge can be proved circumstantially - correspondence, complaints received, prior inspections, what a reasonable person managing the property would have seen. Property owners who have received any communication about a tenant's conduct and filed it away should be getting advice now rather than after a charge is laid. Why this became a criminal enforcement priority The scale explains it. In the ten months from 1 January to 27 October 2025, NSW Health inspectors conducted around 1,260 retailer inspections and seized more than 11.8 million cigarettes, over 2,000 kilograms of other illicit tobacco products and around 170,000 illegal vaping goods, with a combined estimated street value of roughly $18.9 million. Enforcement capacity has since grown further with the addition of 30 full-time equivalent Health inspectors working alongside NSW Police. The Commonwealth layer sits on top of that. The Therapeutic Goods Administration runs joint enforcement operations with state police and the AFP, and non-compliance with the vaping provisions of the Therapeutic Goods Act 1989 can attract up to seven years imprisonment or fines of up to $2.55 million per offence for individuals. A single operation can therefore generate state and federal exposure simultaneously. The organised crime overlay The most serious development for anyone in this space is the reframing of illicit tobacco as organised crime rather than retail non-compliance. The NSW Government has expressly identified exploitation of the illicit tobacco market as one of the drivers of its organised crime reforms), alongside encrypted technology, outsourced violence and the recruitment of children. Those reforms passed Parliament in 2026 and are significant. They created a new aggravated offence for destroying a vehicle by fire after it has been used to commit serious crimes including illicit tobacco offences, extended the time available to seek forfeiture of assets held by people subject to Drug Trafficker Declarations from one year to five, and enhanced the ability of courts to take an accused's organised crime links into account in bail decisions. The practical consequence is that a person charged over illicit tobacco may now find themselves facing arguments about criminal network association at the bail stage, a dynamic we cover in our article on what the 2026 organised crime bail changes mean if you are accused of being part of a network. That is a very different proposition from a licensing prosecution. What else gets charged alongside These matters are rarely single-charge matters. Where large volumes of cash are involved, dealing with proceeds of crime charges frequently follow, and those carry maximum penalties far beyond the tobacco offences themselves - the same territory we cover in our article on what money mule and proceeds of crime charges actually involve. Where false documentation is used to claim a licence or to account for stock, fraud and false document offences arise, as our article on identity and document fraud investigations explains. Tax and excise exposure at Commonwealth level is a separate question again. Employees are not automatically safe either. A person who was serving customers, taking payment and restocking may be charged as a principal or as an accessory depending on what they knew. Being on a wage rather than owning the business is relevant to culpability and sentence, but it is not a complete answer. Where the defences are Several genuine lines exist. The first is the lawfulness of the search and seizure - whether inspectors and police acted within their statutory powers, whether entry was authorised, and whether the chain of custody for seized product holds up. The second is knowledge: for the landlord offence and for employee liability, the prosecution must establish the mental element, and that is frequently the weakest part of the brief. The third is the characterisation of the goods themselves and the quantity, particularly where the charge is possessing a commercial quantity. The fourth is the identity of the person in control of the business, which in practice is often genuinely contested where a shop has changed hands, is operated under a management arrangement, or has multiple people with keys. Where charges are withdrawn or a matter is dismissed, costs may be recoverable, and that is worth knowing early - our guide to when legal costs can be recovered in NSW criminal cases sets out how that works. If inspectors or police have attended Do not give an account on the spot. NSW Health inspectors and police attending a retail premises will often ask questions that seem administrative and are not, and the answers become part of the brief. The right to silence applies, and how it works is explained in our article on the reality of the right to silence in NSW. Preserve records rather than tidying them, because destroying or altering documents after an inspection creates a separate and much worse problem. And if a closure order has been served, comply with it while you get advice, because trading through it is its own offence. Contact Us Illicit tobacco and vaping matters are no longer a compliance headache with a fine attached. They now involve indictable offences with seven-year maximums, closure orders capable of ending a business within days, a new offence exposing landlords, parallel Commonwealth exposure, and an organised crime framework that reaches into bail and asset forfeiture. At National Criminal Lawyers, we act for retailers, employees, company officers and property owners facing these charges across NSW. We know how these investigations are built between NSW Health, NSW Police and the TGA, where the knowledge element can be tested, and how to deal with the closure order problem while the criminal matter runs. Call us at 1800 CRIM LAW for a free consultation. Help us help you understand your situation and get you the best outcome possible.
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From corner-store side hustle to a seven-year offence: how illicit tobacco and vapes became one of the most heavily policed areas in NSW

ByCampbelltown Criminal Lawyers

For a long time this was treated as a fines problem. A shop sold something it should not have, an inspector attended, a penalty notice was issued, and business continued. Anyone still working on that assumption is dangerously out of date. In NSW today, selling illicit tobacco carries a maximum of seven years imprisonment and a fine exceeding $1.5 million, shops are being shut down by order in batches, and from 2026 the landlord who let the premises can be prosecuted too.

If you run a tobacconist or convenience store, work behind the counter at one, own a commercial property leased to one, or have been told by police or NSW Health inspectors that they want to speak with you, the exposure here is far larger than most people assume – and it is no longer confined to the person who owns the business.

What the penalties actually are now

NSW Health sets out the current position in its penalties and enforcement guidance. From 3 November 2025, penalties were substantially increased. Selling illicit tobacco now carries a maximum penalty of seven years imprisonment, a fine of $1.54 million, or both. Possessing a commercial quantity of illicit tobacco carries the same maximum.

Below that sit a series of further offences. Selling tobacco or non-tobacco smoking products without a licence carries a maximum of $660,000 for an individual and $880,000 for a corporation. Falsely claiming to hold a tobacco licence carries a maximum of $880,000. There are also newer offences covering resisting seizure and attempting to retake seized products. On-the-spot fines remain available to inspectors for a range of matters.

NSW Health describes these as among the highest penalties of any Australian state or territory for the sale of illicit tobacco and illicit vaping goods. That is not marketing language. A seven-year maximum places these matters squarely in indictable territory, alongside offences most people would regard as far more obviously criminal.

Closure orders: the consequence that arrives first

For most operators, the immediate problem is not the prosecution. It is the shutdown. The reforms allow the NSW Health Secretary or a delegate to issue short-term closure orders of up to 90 days, and the Local Court to issue long-term closure orders of up to a year, for businesses selling illicit tobacco, illegal vaping goods, or trading without a tobacco licence.

These are being used at scale. As at 26 June 2026, NSW Health had issued 321 short-term closure orders since 3 November 2025, with 162 still in force. A 90-day closure will end most small retail businesses regardless of what happens in court afterwards.

There are also offences attached to the orders themselves. As NSW Health has set out in its announcements on the reforms), there are new offences and penalties for breaching closure orders, including for entering closed premises or selling products from closed premises. Attempting to keep trading through a side door, a QR code or a messaging app after a closure order is not a workaround. It is a fresh offence, and the government has publicly said police and Health are specifically targeting exactly those methods.

The landlord offence: new, and widely underestimated

This is the change that has caught the most people by surprise. The Public Health (Tobacco) Amendment (Landlord Offences) Act creates an offence for commercial lessors who knowingly permit premises to be used by tenants to sell illicit tobacco and illegal vapes. It carries a maximum penalty of one year imprisonment, a fine of $165,000, or both.

The offence is aimed at landlords who are aware of what a tenant is doing and, instead of notifying the authorities or taking steps to evict, knowingly permit the activity to continue. Landlords have also been given new lease termination powers where a closure order is in place.

The critical word is knowingly. A landlord who genuinely had no idea is not caught. But knowledge can be proved circumstantially – correspondence, complaints received, prior inspections, what a reasonable person managing the property would have seen. Property owners who have received any communication about a tenant’s conduct and filed it away should be getting advice now rather than after a charge is laid.

Why this became a criminal enforcement priority

The scale explains it. In the ten months from 1 January to 27 October 2025, NSW Health inspectors conducted around 1,260 retailer inspections and seized more than 11.8 million cigarettes, over 2,000 kilograms of other illicit tobacco products and around 170,000 illegal vaping goods, with a combined estimated street value of roughly $18.9 million. Enforcement capacity has since grown further with the addition of 30 full-time equivalent Health inspectors working alongside NSW Police.

The Commonwealth layer sits on top of that. The Therapeutic Goods Administration runs joint enforcement operations with state police and the AFP, and non-compliance with the vaping provisions of the Therapeutic Goods Act 1989 can attract up to seven years imprisonment or fines of up to $2.55 million per offence for individuals. A single operation can therefore generate state and federal exposure simultaneously.

The organised crime overlay

The most serious development for anyone in this space is the reframing of illicit tobacco as organised crime rather than retail non-compliance. The NSW Government has expressly identified exploitation of the illicit tobacco market as one of the drivers of its organised crime reforms), alongside encrypted technology, outsourced violence and the recruitment of children.

Those reforms passed Parliament in 2026 and are significant. They created a new aggravated offence for destroying a vehicle by fire after it has been used to commit serious crimes including illicit tobacco offences, extended the time available to seek forfeiture of assets held by people subject to Drug Trafficker Declarations from one year to five, and enhanced the ability of courts to take an accused’s organised crime links into account in bail decisions.

The practical consequence is that a person charged over illicit tobacco may now find themselves facing arguments about criminal network association at the bail stage, a dynamic we cover in our article on what the 2026 organised crime bail changes mean if you are accused of being part of a network. That is a very different proposition from a licensing prosecution.

What else gets charged alongside

These matters are rarely single-charge matters. Where large volumes of cash are involved, dealing with proceeds of crime charges frequently follow, and those carry maximum penalties far beyond the tobacco offences themselves – the same territory we cover in our article on what money mule and proceeds of crime charges actually involve. Where false documentation is used to claim a licence or to account for stock, fraud and false document offences arise, as our article on identity and document fraud investigations explains. Tax and excise exposure at Commonwealth level is a separate question again.

Employees are not automatically safe either. A person who was serving customers, taking payment and restocking may be charged as a principal or as an accessory depending on what they knew. Being on a wage rather than owning the business is relevant to culpability and sentence, but it is not a complete answer.

Where the defences are

Several genuine lines exist. The first is the lawfulness of the search and seizure – whether inspectors and police acted within their statutory powers, whether entry was authorised, and whether the chain of custody for seized product holds up. The second is knowledge: for the landlord offence and for employee liability, the prosecution must establish the mental element, and that is frequently the weakest part of the brief.

The third is the characterisation of the goods themselves and the quantity, particularly where the charge is possessing a commercial quantity. The fourth is the identity of the person in control of the business, which in practice is often genuinely contested where a shop has changed hands, is operated under a management arrangement, or has multiple people with keys.

Where charges are withdrawn or a matter is dismissed, costs may be recoverable, and that is worth knowing early – our guide to when legal costs can be recovered in NSW criminal cases sets out how that works.

If inspectors or police have attended

Do not give an account on the spot. NSW Health inspectors and police attending a retail premises will often ask questions that seem administrative and are not, and the answers become part of the brief. The right to silence applies, and how it works is explained in our article on the reality of the right to silence in NSW. Preserve records rather than tidying them, because destroying or altering documents after an inspection creates a separate and much worse problem. And if a closure order has been served, comply with it while you get advice, because trading through it is its own offence.

Contact Us

Illicit tobacco and vaping matters are no longer a compliance headache with a fine attached. They now involve indictable offences with seven-year maximums, closure orders capable of ending a business within days, a new offence exposing landlords, parallel Commonwealth exposure, and an organised crime framework that reaches into bail and asset forfeiture.

At National Criminal Lawyers, we act for retailers, employees, company officers and property owners facing these charges across NSW. We know how these investigations are built between NSW Health, NSW Police and the TGA, where the knowledge element can be tested, and how to deal with the closure order problem while the criminal matter runs.

Call us at 1800 CRIM LAW for a free consultation. Help us help you understand your situation and get you the best outcome possible.

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