On an October evening in 2024, a delivery driver making a stop at the back of a building on Winnipeg’s Nairn Avenue was confronted by a group of men and forced into the back of a trailer.
The men took the 22-year-old’s phone, threatened to kill him and his family and demanded the codes to a storage locker, where they drove to take roughly $25,000 worth of vape products before letting him go.
The incident, which a prosecutor later said left the driver so fearful he ended up leaving Manitoba, was spurred by the breakdown of a business relationship that involved convenience stores selling so-called grey market vapes, court heard at the sentencing of one of the men involved.
“This is an area where, I guess, it’s not strictly criminal, what they were up to,” defence lawyer Christopher Gamby told a judge at the June hearing in Winnipeg.
The case highlights what experts say has become a growing grey market for vapes — products that aren’t necessarily illegal but might skirt or brush up against the law. People vape using portable devices that produce aerosol mists.
The grey market is driven, in part, by consumer desire for cheaper or banned items and large profit margins from a product that’s fairly easy to move.
That growing market also brings potential risks related to health, loss of government revenues and the potential for organized crime involvement, experts say. While potential solutions exist, it’s not clear whether any would be enough to completely stamp out the problem — or whether politicians or law enforcement see it as serious enough to bother addressing at all.
The Winnipeg case, which University of Manitoba law Prof. Michelle Gallant said sounded “more like a gang” than a falling out in a business relationship, also highlights what one researcher called the unique position of the province’s vape market.
Christian Leuprecht, who published a paper this year suggesting legal vapes still make up a good portion of Manitoba’s market, said that creates an opportunity for people looking to stake out territory in what might be seen as a nascent grey or black market.
“That can get you into disputes like you’ve seen, either about the product and who owns the product, but it also gets you into disputes about distribution channels because different criminal elements will try to own that market, and so they’ll compete with another,” said Leuprecht, a professor at Queen’s University and the Royal Military College of Canada.
Ian Irvine, a recently retired economics professor at Concordia University who published a paper this year suggesting Manitoba has also become a modest exporter of vape products to other provinces, said it’s hard to know the full scope of the problem because the people involved aren’t reporting their activities.
When estimates of the rapidly growing online market are factored in, he thinks Canada is on track for its illicit vape market to rival the expansive one that already exists for cigarettes.
“We’re headed for that,” Irvine said, “unless we can slow down and go back and have a look at things.”
What is the grey market, and is it a problem?
While grey market vape products might appear to have “an aura of legitimacy” at first glance, Leuprecht said, there are many ways they can skirt the law while appearing similar to legal products, such as having too-high amounts of nicotine or vape liquid, or not having all the required tax stamps.
Because of differences in vape rules between provinces — such as some restricting flavours, which are allowed elsewhere — taking a product from one province and selling it somewhere it’s not permitted could also fall into the grey market.
There are just as many factors motivating people to participate in the grey market, from consumers who want a deal or a product they can’t legally buy in their province, to store owners who want to meet that demand, to people at the front end motivated by large profit margins and a light, easy-to-transport product.
There are also potential costs involved, experts say, including a loss of government revenue when taxes aren’t paid on illegal products, a disproportionate targeting of youth and a strain on legal sellers struggling to compete with products that are cheaper because they’re flouting the rules.
There’s also the risk that organized crime players already set up to move other products could begin to see the market as another cash stream, Gallant said.
“Maybe the profit margin isn’t as big as it would be for buying cocaine, cutting it up and selling it. But if there is a significant profit motivation, then why not?” she said. “I think that would be my biggest concern with it. It’s not about, sort of, the person who owns the 7-Eleven selling this stuff.”
The people hit hardest by the health risks of excessive or inconsistent nicotine levels and their impacts on addiction are likely to be those with less means, Leuprecht said.
“Often, the incentive is that you have an addiction to the product, but financially you don’t have the means to buy properly licensed product,” he said. “So, it’s the most vulnerable people in our population that are disproportionately being targeted.”
What can be done?
Possible responses vary, from developing a federal illicit nicotine strategy and addressing inconsistencies in vape laws across the country, to cracking down on illicit online sales and increasing enforcement and seizures of illicit products.
But as long as there are incentives to sell on the grey market, including some driven by government restrictions on things such as flavours or high taxes on legal products, Irvine said he’s not convinced any amount of inspections or policing would be enough to tackle the problem.
“If governments think that they can legislate their way to a better world and disregard the law of unintended consequences, they’re just dreaming,” he said.
However, Leuprecht said targeting the demand side can also help make a dent, including through better awareness among vape sellers and users, particularly youth, of the risks of grey market products and how to recognize them.
“They’re not familiar with the risks that they’re exposing themselves to, with the associations with organized crime that that’s feeding, with the fact that these don’t pay, that these don’t remit taxes properly,” he said.
And while experts say illicit vapes pose clear risks, they’re perceived as more distant than issues like the drug crisis, where the risk of physical harm or death is more immediate. As a result, the vape issue might not get the attention or resources required to see real change.
“In this province, there are lots of other bigger concerns,” Gallant said. “I’m sure against the backdrop of all kinds of other things, most people don’t perceive it — even your public policymakers — as really that big of a deal.”
Spokespeople say the issue is on the radar of both Manitoba RCMP and provincial enforcement officers.
While Mounties work to seize contraband tobacco “with the goal of disrupting the activities of criminal organizations involved in the illegal tobacco trade,” a spokesperson said they couldn’t comment further.
Manitoba enforcement officers gave 48 warnings related to provincial excise stamps on vape products after more than 1,000 retail inspections between October and the end of June, a provincial spokesperson said.
While repeat offenders can be fined, the spokesperson said officers first try to educate retailers and ask them to remove the products, many of which were old inventory pre-dating an April 2025 requirement to have an excise stamp, they said.
