For years, regulators tried to kill the illegal US vape market the obvious way: go after the brands, sue the importers, chase the storefronts. It mostly didn’t work.
The products, almost all manufactured in China, almost all lacking FDA authorization, kept flowing, kept showing up in gas stations and convenience stores and online shops, and the illegal US vape market kept growing, now estimated at around $9 billion. So the attorneys general tried something different. They stopped going after the vapes and started going after the pipes.
Shopify is banning all vapes from its US platform as early as this week, following months of negotiations with a bipartisan coalition of 25 state attorneys general who have been pushing the company to do more to clamp down on a booming market for vapes that lack the legally required license for US sales. The Ottawa-based company provides the underlying infrastructure that lets millions of merchants operate and scale e-commerce channels.
The ban is being called the most significant win yet for the state officials. And what makes it genuinely interesting for anyone watching e-commerce is not the vaping angle. It’s the strategy.
Going After the Pipes, Not the Smoke
The infrastructure-targeting playbook didn’t start with Shopify. In April, California Attorney General Rob Bonta and the same coalition wrote to nine major card networks and payment processors, among them Visa, Mastercard, Stripe, and PayPal, demanding tougher steps to keep their systems from handling illegal vape transactions. Separately, Mastercard warned partners responsible for adding merchants to its network that unlicensed vape sales violate its standards, according to a global notice issued in May.
The logic is that you can’t easily shut down a thousand individual storefronts shipping product from overseas. But you can pressure the three or four platforms those storefronts all depend on to process payments, host their stores, and ship their orders. Cut the pipes, and the water stops flowing, regardless of how many individual sellers are trying to turn the tap.
Arizona Attorney General Kris Mayes called the trade “blatant law-breaking and a danger to the young people and teens” who the products target. The political coalition is notably bipartisan, 25 AGs from red and blue states, which gave it enough weight to get Shopify to the table and keep it there through months of discussions.
The Collateral Damage: Legal Sellers
Here’s the catch, and it’s a significant one. The ban will apply to all vapes regardless of whether they have the required FDA authorization, and the FDA has authorized only 45 e-cigarette products for US sale, mostly tobacco-flavoured. The merchants selling those authorized products legally are getting caught in the same net as the illegal operators the ban was designed to target.
A relatively small portion of authorized vape sales in the US occur online, which should mean a limited effect on licensed players, but “limited effect” is a different thing from “no effect,” and legal merchants who built their online businesses on Shopify now have to find somewhere else to sell, through no fault of their own, because the illegal market made their category politically radioactive. One source described the expected ban as having a potential “chilling effect” on sellers.
The FDA’s Awkward Timing
The regulatory backdrop is messy in ways that don’t make anyone’s job easier. On May 5, the FDA cleared its first fruit-flavoured vapes, four Glas pods using digital age-gating, reversing a long de facto limit to tobacco and menthol flavours. Days later, the FDA signalled it would not prioritize enforcement against vapes and nicotine pouches sold without authorization, a posture Bonta and other attorneys general have publicly criticized.
The people selling legal vapes online are caught between a federal agency telling them “this product is authorized” and a platform policy saying “we don’t care, you’re out.”
Our Take
Your Platform Is Now Responsible for What You Sell
The Shopify vape ban is going to be remembered less for what it does to e-cigarette sales and more for what it signals about platform liability in the next decade of e-commerce. The attorneys general figured out that the most effective point of leverage isn’t the seller, it’s the infrastructure layer the seller depends on. Shopify, Stripe, Visa, Mastercard: these are the chokepoints, and once regulators internalize that going after chokepoints works, they will use the playbook again, on different product categories, with different coalitions.
If you run a Shopify store selling anything that exists in a legal grey zone, such as supplements, certain firearms accessories, CBD, age-restricted goods of any kind, you just watched your platform demonstrate that it will cut off an entire category, including the legal part of it, when the political pressure gets high enough. Plan accordingly.
