Authorities carried out search warrants at 34 tobacco shops across Melbourne on Wednesday and Thursday.
They seized more than 36,000 vapes, $400,000 worth of cigarettes, 30kg of tobacco, two kilograms of cannabis, cocaine and two expandable batons.
A Northcote man, 40, was charged with drug offences and bailed.
Five others were released pending further inquiries, bringing the total number of people arrested as part of the investigation to 13.
Searches were carried out in Bentleigh, Bacchus Marsh, Broadmeadows, Bundoora, Carlton, Hoppers Crossing, Glenroy, Kurunjang, North Melbourne, Flemington, Northcote, Moonee Ponds, St Albans, central Melbourne, Strathmore, Footscray, Melton West, Melton South, Collingwood, West Footscray, Reservoir, Fitzroy, Sunshine, Keilor Downs and Mernda.
Police say there have been more than 30 serious incidents linked to their probe during the past seven months, including 27 suspicious fires.
Investigators believe they could be linked to conflicts between criminal syndicates competing for profits.
Victoria Police said they included members of Middle Eastern organised crime groups and outlaw motorcycle gangs that used youths, street gangs and low-level criminals to carry out offending.
Detective Superintendent Jason Kelly said a large portion of Victoria's 800 tobacco shops had been infiltrated and lives were at risk.
"The arsons have shone a light on the tobacco trade," he said.
"So what I suspect is this has been going on for quite a number of years and it's now escalated in terms of the conflict between organised crime."
Australian Border Force Commander Clinton Sims said several syndicates were involved in the illicit tobacco trade.
"We're seeing legitimate business owners being extorted money, we're also seeing organised crime taking ownership of stores," he said.
Det Supt Kelly said the price of illegal tobacco could be as low as $15-$20 a packet, less than half of what legitimate product retails for.
He urged members of the public to stay away from cheap packets as every sale puts money into the pockets of criminals.
"The sale of illicit tobacco funds other criminality such as the importation of illicit drugs and firearms, again we need to do everything we possibly can to cut off the revenue streams of organised crime," he said.
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