Alberta retailers say Ottawa nicotine pouch rules fuel black market
Retailers say strict federal rules are limiting legal nicotine options while driving demand toward unregulated sellers.
As nicotine pouches gain popularity, Alberta retailers say federal rules are tying their hands, limiting what they can legally stock, what they can tell customers and ultimately pushing demand away from regulated stores and into the black market.
Federal rules allow only one nicotine pouch brand, Zonnic, to be sold behind pharmacy counters in Canada. Store owners say they’re seeing more adults asking for smoke-free alternatives, but regulations restrict product availability and prevent staff from making even basic comparisons between options that customers are actively seeking.
Jo Calliou, manager of Tobacco Town, taped off combustible tobacco products for a day to spark discussion about lower-harm smoke-free alternatives like IQOS and vapes.
“Our hands are tied in what we can tell customers,” she told Juno News. “We can’t say these are healthier options, only that alternatives are available.”
Still, Calliou says many customers are seeking alternatives to help them quit smoking rather than stopping cold turkey.
In a March letter to Prime Minister Mark Carney, Alberta argued federal nicotine pouch restrictions are inconsistent and could fuel the illicit market by limiting access to legal products.
“We heard from Albertans,” says Service Alberta Minister Dale Nally. “They were upset at the ministerial order… it just made (nicotine pouches) more difficult to purchase, and in making them more difficult to purchase the illicit market has stepped up.”
Danny Fournier, a former RCMP officer and now senior manager of illicit trade prevention at Rothmans Benson & Hedges, warns blanket bans push consumers toward unregulated contraband products that bypass Health Canada standards.
“If you’re a government considering implementing a ban, in my experience, bans do not work,” he said.
A recent report found that over a third of Canada’s total cigarette consumption in 2025 was from the black market, representing a loss of more than $2.1 billion in tax revenue.
Minister Nally says he’s frustrated that weak rules have allowed the illicit market to grow, despite Ottawa’s intent to prevent this when it introduced 2024 regulations.
Health Canada requires tobacco products to have reduced ignition risk so they don’t keep burning unattended, while contraband products lack these standards, increasing fire and wildfire risk when discarded or left burning.
Combustible cigarettes face a similar issue in the unregulated market.
Fournier said he has visited contraband tobacco factories with dirt floors and no oversight, warning illegal products lack quality control and are “simply not comparable to legitimate manufacturers” from a public health standpoint.
The federal government says stricter rules are needed to curb youth appeal and prevent new users. But Fournier argues blanket bans, like Quebec’s flavoured vape ban, can drive youth to unregulated products and “are going to fail” without enforcement and education.
Kory McDonald, the head of external affairs at RBH, told True North that the leading reason for purchasing from a contraband market is the price difference. She said high taxes and regulation costs often make legitimate tobacco products more expensive, and therefore less appealing.
Asked about Alberta’s letter seeking smoking alternatives, McDonald told Juno News Canada already offers smoke-free options, including nicotine pouches sold behind pharmacy counters to limit access.
“A big part of our mission is to educate adult smokers and help find information on alternatives to combustible cigarettes,” McDonald said in a follow-up interview.
Health Canada reports 49% of quitters used nicotine products, including vapes (21%), other replacements (25%), and pouches (3%), while 56% quit cold turkey. Tobacco use has fallen to 13%, down from 29% in 2021, as Canada aims for under 5% by 2035 amid 46,000 annual tobacco-related deaths.
About 300,000 Canadians quit smoking in 2024, including roughly 63,000 who used vapes or e-cigarettes to quit, according to the study — despite ongoing federal restrictions on nicotine alternatives.
On Apr. 16, Alberta MLA Chelsae Petrovic, a former nurse, introduced Bill 208 to ban flavoured vaping products in Alberta. The proposal would amend provincial law despite data suggesting vaping is less harmful than smoking and commonly used by Canadians to quit.
The bill would repeal and replace section 7.41(1) of Alberta’s Tobacco, Smoking and Vaping Reduction Act, redefining “flavoured vaping products” in law and banning all non-tobacco flavours while allowing products with tobacco-only flavours.
This Act would come into force one year after receiving Royal Assent. It received a first reading Apr. 16 and is before committee for review.
While Alberta agrees with the federal government that youth should be barred from nicotine pouches, they differ on whether adults trying to quit smoking should have easier access to more brands.
The Consumer’s Choice Centre urges Canada to ease restrictions on vaping, citing Health Canada data showing it helps smoking cessation and could lower smoking rates faster.
David Clement, the group’s North American affairs manager, says vaping is widely viewed as 95% less harmful than smoking, with youth use down 50% since 2019.
“Prior to legal vaping, Health Canada estimated that Canada could reduce its smoking rate to 8.1% by 2035, but that with legal vaping, the 2035 target is now 5.1%. This is a huge win.”
Meanwhile, Health Minister Marjorie Michel says Canada is considering a U.K.-style generational tobacco ban for those born after 2008, alongside stricter vape rules on ads, flavours, and packaging.
“We saw what the U.K. did, but I am looking into it with all partners for now,” she told reporters Apr. 29.