Shopify is about to pull the plug on vape sales across its entire platform, and a $9 billion illegal market is what forced the move.

The Ottawa-based company, which provides the back-end infrastructure for millions of online merchants, will ban all vapes as soon as this week, according to two sources familiar with its plans, first reported by Reuters. The decision follows sustained pressure from a bipartisan coalition of 25 state attorneys general who have spent over a year pushing Shopify to stop hosting merchants selling unlicensed e-cigarettes.

The problem they're trying to fix

Most vapes sold in the United States are technically illegal. The FDA has granted marketing approval to just 45 e-cigarette products, nearly all of them tobacco-flavored. Everything else, including the vast majority of flavored, disposable vapes widely sold at gas stations and convenience stores, lacks the legal clearance required to be imported or sold. Most of these products are manufactured in China.

That illegal market is now worth roughly $9 billion, according to British American Tobacco, whose U.S. business has been squeezed by the competition. Critics, including big tobacco companies, argue the FDA's narrow approval process has created a vacuum that illegal sellers have filled. Attorneys general argue the result is a massive public health problem with limited accountability.

Shopify is not the only piece of infrastructure getting squeezed. Mastercard separately warned its financial partners in May that unlicensed vape sales violate its standards, according to a notice obtained by Reuters. It told those partners, the financial institutions that process card transactions on its network, that they are responsible for making sure the merchants they onboard aren't breaking the law. Mastercard said it would launch investigations into stores selling illegal vapes and could fine both retailers and the institutions that enabled their transactions. "We have zero tolerance for unlawful activity on our network," the company said.

What this actually disrupts

The Shopify ban will cover all vapes sold through its platform in the U.S., regardless of whether they hold FDA approval. That breadth is significant. It means even the small number of legitimate, licensed sellers will be caught in the net.

But the practical disruption should fall mostly on the illegal side. A relatively small share of authorized vape sales happen online, one of the sources told Reuters, so licensed players like British American Tobacco and Juul should face limited fallout. Illegal vapes, by contrast, depend more heavily on e-commerce channels to reach buyers. One source said the ban could have a "chilling effect" on the broader market of unlicensed sellers.

The geographic scope of the ban is still unclear. Shopify did not answer questions about whether it would extend beyond the United States.

The bigger pattern

What's happening here is a strategy that regulators have increasingly turned to when the actual point of sale is too fragmented to police directly. Rather than chasing thousands of individual vape shops or small online merchants, attorneys general are targeting the infrastructure those sellers depend on: the platforms that host their storefronts, the payment networks that process their transactions, the financial institutions that sit in between.

It's the same logic behind earlier crackdowns on opioid distributors and illegal firearms dealers online. You can't easily shut down every seller, but you can make it significantly harder for them to collect money or appear in a searchable storefront.

The question now is whether removing the e-commerce layer actually reduces access, or simply pushes buyers toward the gas station counter and the brick-and-mortar vape shop, where enforcement has historically been spotty and the $9 billion market has already taken firm root.