Mexico's Vape Ban Backfires as Cartels Seize the Underground Market

Mexico's recent ban on vape sales has pushed the stock market underground, handing control to powerful cartels. The Sinaloa Cartel and Jalisco New Generation Cartel now dominate the trade, seizing 70% of the black market within months of the restrictions taking effect in January 2025. The move follows years of legal battles and a booming industry once worth US$1.5 billion in early 2022.

The Mexican government first banned electronic cigarette sales earlier this month, though personal use remains legal. This followed a Supreme Court ruling in 2023 that struck down an earlier prohibition as unconstitutional. A constitutional amendment in January 2025 then reinstated the ban, forcing the stock market into illicit channels.

Authorities had already begun cracking down before the full ban. In February 2023, raids led to the seizure of 130,000 vapes. Yet despite these efforts, cartels quickly filled the void. According to the NGO Defensorxs, the Sinaloa Cartel (CDS) and Jalisco New Generation Cartel (CJNG) now repackage imported Asian e-cigarettes and control distribution through armed networks in Mexico City, Guadalajara, and Tijuana. Production hubs in Sinaloa and Jalisco have tripled output by mid-2025.

The cartels' grip extends beyond smuggling. In one incident, armed members abducted two vape store employees, demanding to speak with their bosses. They declared the store seized, allowing it to operate only online and outside the state. Experts warn that the ban has simply handed organized crime another lucrative revenue stream, further entrenching their power in northern states and major cities.

The ban on vape sales has not eliminated the market but shifted it into criminal hands. With cartels now controlling 70% of distribution, their influence over the stock market is expected to grow. Meanwhile, vaping remains legal and regulated in the US and Europe, though at least eight Latin American countries have imposed outright bans.