This report analyses the key developments shaping the global nicotine and cannabis industries in H1 2026. It examines tightening regulation, tax hikes and reduced-risk product policies, alongside the continued shift towards nicotine pouches, heated tobacco and other smokeless formats. The report also explores major corporate moves, cannabis market expansion, and the macroeconomic impact of higher energy costs and slower growth on industry performance.
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Key Findings
Regulatory updates
The FDA is reshaping the US reduced-risk products market, renewing MRTP orders for IQOS and HEETS and clearing reduced-risk claims for Zyn pouches, though its pouch stance still draws pushback. Tobacco and nicotine taxes keep climbing worldwide, from Finland and Germany to Croatia, the Philippines and South Korea. Controls on vapes and pouches are tightening fast, with the UK’s “smoke-free generation” law, new Indonesian limits and an EU clash over disposable, filters and pouch bans, while cannabis rules face review in Canada, France and Mexico.
Industry updates
Smokeless is now the sole growth engine. Nicotine pouches keep gaining US share as cigarette volumes fall, and they have overtaken snus in Sweden and Norway. The majors are widening their heated tobacco and pouch reach, from PMI’s IQOS and Zyn in Argentina, Japan and the UK to Altria’s on! PLUS, BAT’s Velo and JTI. Disposable vape bans and online crackdowns in the UK, at Shopify and on Singapore’s illicit trade are reshaping channels, even as cannabis markets grow in Canada, the UK, Brazil and Mexico.
Corporate updates
Big companies are racing to increase their smoke-free portfolios. PMI, BAT, JTI, and KT&G all posted gains and expanded their reduced-risk product portfolios across pouches, heated tobacco, and e-vapour. Diversification is accelerating too, with BAT and Altria pushing into US cannabis while KT&G eyes oral nicotine expansion. Cannabis had a breakthrough quarter of its own, as exchange uplistings and a wave of acquisitions and partnerships swept across Europe.
Macroeconomic updates
The Strait of Hormuz blockage has severed a key energy corridor, pushing Brent crude up 45% and disrupting Gulf trade. Euromonitor cut its 2026 global GDP growth forecast to 2.9% and raised inflation to 4.6%, as oil costs feed through to transport, manufacturing and food. The import-reliant UK and Eurozone face the steepest downgrades, while the more diversified US is better placed.
Why read this report?
Key stories
Industry evolution is framed by the poly-usage evolution of nicotine formats
Nicotine snapshot
Adult-use category is the driving force behind the global legal cannabis market
FDA decisions reshape the US reduced-risk products landscape
Taxation pressures and calls to revise approach on oral nicotine in Asia Pacific
New regulatory exploration and enforcement come into action
Tobacco taxes continue to rise globally
EU divided on how to deal with disposable and filter bans
French pouch ban ignites EU single-market clash
“Endgame” regulation continues to see different interest levels from regulators
FDA faces pushback on stand over pouches while new players clear regulatory barriers
Legislators target sophisticated tobacco and nicotine regulation loopholes
A tumultuous retail environment offers challenges and opportunities
Oral nicotine gains as zyn expands formats and flavours
Price gaps and illicit trade squeeze legal tobacco volumes
New markets, new rules for oral nicotine
Reduced launches widen across markets
New formats and fresh branding across the category
Consumers move on as regulation reshapes the market
BAT's half-year results: Profit growth amid revenue challenges
BAT focuses on e-vapour and US cannabis market
KT&G: Investor interest builds as it prepares for oral nicotine expansion
From cigarettes to cannabis: Altria's dual strategy for market stability
JTI’s financial surge and new product launch pave the way
PMI continues strong push towards smoke-free portfolio
PMI deepens its investment in the US nicotine pouch market and expands HTP in the UK
Other corporate updates
Reform and legal uncertainty reshape cannabis rules in Canada, France and Mexico
European regulators reweigh cannabis frameworks as Canadian tax revenue climbs
Product launches, cross-border partnerships and tax milestones drive cannabis market
Rising use and wider access expand cannabis markets in Brazil, Mexico and the UK
Producers expand medical portfolios across Australia, New Zealand and Germany
Exchange uplistings mark a breakthrough quarter for cannabis companies
Acquisitions and partnerships accelerate cannabis expansion across Europe
Prolonged supply disruption keeps oil prices elevated and growth under pressure
Key updates
Hormuz disruption impact on business
Real GDP annual growth forecasts and revisions from last quarter
Inflation forecasts and revisions from last quarter
Central bank interest rates forecasts and revisions from the last quarter
Global Economic Forecasts: A structured view of the macro outlook and key risks
Key stories
Our expert’s views of key developments so far in 2025
AI usage in Euromonitor reports
Nicotine
Passport Nicotine covers the seven major nicotine 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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