The illicit trade has made headlines across the country as crime syndicates go to war over control of the crowded market, with firebombings their communication method of choice.
And while local police know who those crime gangs are, their federal counterparts are turning their attention to where the products are coming from.
Almost all illegal vapes and a large proportion of illegal tobacco is from China, despite a memorandum of understanding between the Australian and Chinese governments signed last year to help combat the illegal importation of tobacco.
Former head of Australian Border Force's tobacco taskforce, Rohan Pike questioned why China agreed to sign given their government owns Double Happiness, the second leading brand of illegal tobacco consumed in Australia.
"They clearly have the capability in an authoritarian society to crack down if they wanted to," Mr Pike told AAP on Monday.
He said the illegal tobacco trade began when a 25 per cent tax increase was introduced for cigarettes in 2010.
"It's been going up exponentially, really kicked off the problem. And they just created a monster really," Mr Pike said.
Since then, taxes have continued to increase pushing the price to between $40 and $50 a pack.
Border Force seized 6.3 million illegal vapes last year, but millions more made it into the hands of Australians.
The only way to stop it, Mr Pike says, is a substantial increase in law enforcement resources and planning.
"The laws are not specific or widespread enough ... every state has a different regime and the penalties are not strong enough," he said.
In November, Victorian parliament passed legislation to create a tobacco licensing scheme in a bid to quell the tobacco wars.
The scheme, which will require all sellers of tobacco products to hold a licence, is scheduled to be rolled out from mid-2025.
But AAP has been told retailers will have six months from its opening before inspectors begin checking for licences.
Premier Jacinta Allan passed the buck to federal authorities when asked if the regime could be enacted quicker to combat resurgent sales of illegal vapes, particularly those imported from the Chinese market.
"We already have the toughest laws and fine regimes in the nation to address the sale of illicit tobacco products," she told reporters on Monday.
Victoria Police's Taskforce Lunar, set up in October 2023 to investigate the black market and linked firebombings, has carried out more than 200 raids, arrested 80 offenders and seized up to $37 million worth of illegal tobacco products.
SA Police seized more than $2.38 million worth of illicit tobacco and $391,000 in cash in regional and metropolitan raids last week.
More than $2 million worth of tobacco was found in four shipping containers at Burton and Parafield Gardens in suburban Adelaide alone.
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