Australia’s Billion Illicit Vape Market: Etomidate-Laced Devices Found in Melbourne

Australian health authorities issued an urgent warning after vape products sold in Melbourne were found to contain etomidate, a powerful hospital-grade anaesthetic that can cause profound sedation, breathing difficulties, and loss of consciousness. The discovery marks the latest escalation in what experts describe as a predictable consequence of Australia’s prohibitionist approach to nicotine vaping. Victoria Health issued the original alert on June 29.

What Happened

Victoria Health issued the alert after products marketed as “space vapes,” “space oil,” and “k-pods” tested positive for etomidate, synthetic opioids, and other dangerous substances. Users purchasing these products have no reliable way of knowing what they are inhaling — a scenario harm reduction experts warned would unfold when legal access to regulated nicotine products was restricted.

The contaminated devices were found in Melbourne, but authorities believe the problem extends across the country. The Australian Border Force has acknowledged that enforcement alone cannot solve the illicit market, which has become highly resilient, adaptable and increasingly sophisticated.

The Scale of the Problem

Australia’s illicit nicotine market is now estimated at $7 billion annually. According to the Australian Bureau of Statistics, nicotine use surged nearly 40% from 2017 to 2025 despite strict anti-smoking measures, heavy tobacco taxes, and tight vaping regulations. Illicit products now account for approximately 80% of all nicotine and tobacco consumed in Australia — up from just 12% eight years ago.

For context, illegal tobacco makes up about 11% of total use across 38 European nations, 38% in Canada, and 27% in New Zealand. Australia’s 80% places it in a league of its own.

Organised crime groups have become deeply involved, with law enforcement reporting links to money laundering, violence, human trafficking, and drug trafficking. Firebombings of tobacconists have become increasingly common as criminal networks compete for market control.

The core issue is not about regulated nicotine vaping. It is about what happens when legitimate supply routes are cut off and consumers are pushed into underground markets. Unlike licensed nicotine vapes made under quality-control standards, illegal products operate entirely outside regulatory oversight — no ingredient disclosures, no manufacturing audits, no product testing, no accountability.

This pattern is not unique to Australia. In the UK, NHS psychiatrist Dr Hilary Reed recently reported a sharp increase in psychosis cases potentially linked to synthetic cannabinoid-contaminated vaping products. Research from the University of Bath found that roughly one-quarter of vaping devices confiscated in UK schools contained synthetic cannabinoids rather than the substances users believed they were consuming.

Why It Matters

Australia’s experience is a real-world case study in regulatory failure. Despite spending years tightening restrictions on nicotine vaping products — requiring prescriptions for nicotine e-liquids, banning imports, and cracking down on retailers — the country now has one of the largest illicit nicotine markets among developed nations.

The irony is stark: policies designed to protect public health have created an unregulated market where products can contain hospital-grade anaesthetics without any consumer protection. Harm reduction advocates argue that regulated access to safer nicotine products would dramatically shrink the black market, as seen in the UK and Sweden.

The Victorian Health Department has urged anyone who has purchased “space vapes” or similar products to stop using them immediately and report to health authorities. The broader question remains whether Australian policymakers will reconsider their prohibitionist approach or continue down a path that has demonstrably failed.

Keep Reading

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• South Australia’s “Operation Shutdown” Closes 71 Stores, Seizes $4.2M in Illicit Tobacco and Vapes