Executive summary
Malaysia has effectively reinstated liquid nicotine under the Poisons Act 1952 after withdrawing its appeal in a High Court case that invalidated the 2023 exemption. The ruling reclassifies vape liquids and gels as controlled poisons, creating immediate legal uncertainty for retailers, distributors, and tax authorities. Despite the 2024 Control of Smoking Products for Public Health Act providing a regulatory framework for vaping, the absence of clear implementation rules leaves the market in limbo. The government faces mounting pressure to clarify the legal status of existing inventory and halt further excise collections, while industry stakeholders warn of operational disruption.
Regulatory risk: The reinstatement of liquid nicotine under the Poisons Act introduces immediate criminal liability for possession and sale without a license, creating a high-stakes compliance environment for retailers.
What happened
On September 4, 2026, Malaysia’s Ministry of Health confirmed it would not pursue further appeal of a High Court decision that struck down the 2023 regulatory exemption allowing liquid nicotine to be used in vaping products. The court ruled that the exemption violated the Poisons Act 1952, which classifies nicotine in liquid and gel forms as controlled substances. As a result, all vape liquids and gels containing nicotine—whether synthetic or tobacco-derived—are now legally classified as poisons under the Act, requiring special licensing for import, manufacture, and sale.
Simultaneously, the Control of Smoking Products for Public Health Act 2024, which was intended to establish a comprehensive regulatory regime for vaping products, remains unimplemented. While the law outlines licensing, product standards, and advertising restrictions, no subsidiary regulations or enforcement guidelines have been issued. This gap has left the market without a clear path for legal operation, even as the Poisons Act now criminalizes unlicensed activity.
Since 2023, the government has collected more than RM354 million in excise duties on vape products. With the legal status of these products now in question, MPs from multiple parties have called for an immediate halt to all vape-related tax collection and a review of refunds for past payments. The Ministry of Finance has not yet responded to these calls.
Why it matters
This reversal marks a significant policy U-turn after years of gradual market liberalization. The 2023 exemption was seen as a step toward recognizing vaping as a harm reduction tool, aligning with global trends in regulated nicotine delivery. The reclassification undermines that trajectory and signals a return to a prohibitionist framework, despite the existence of a modern regulatory law.
The contradiction between the Poisons Act and the 2024 Act creates a jurisdictional conflict. The Poisons Act imposes criminal penalties for unlicensed possession or sale, while the 2024 Act establishes a civil licensing system. Without harmonization, businesses face dual legal risks: criminal liability under the Poisons Act and potential civil penalties under the new public health law.
Market impact
Malaysia’s vape market, valued at approximately RM1.2 billion in 2025, is now in operational crisis. Retailers are scrambling to determine whether existing inventory can be legally sold or must be destroyed. Importers are halting shipments, and distributors are pausing sales pending regulatory clarification. The uncertainty has already led to a 40% drop in online sales volume, according to e-commerce analytics from major platforms.
Small and medium-sized vape retailers—many of which operate on thin margins—are particularly vulnerable. Without clear guidance, many fear they may face prosecution for selling products that were legally available just months ago. The lack of a transition period or grace clause increases the risk of criminal liability for good-faith operators.
Consumer sentiment is shifting. Surveys conducted by the Malaysian Vape Association show a 32% decline in new user sign-ups since the ruling, with many citing legal uncertainty as a deterrent. The market may see a rise in black-market activity if legal channels remain blocked.
Regulatory impact
The reinstatement of liquid nicotine under the Poisons Act represents a major setback for regulatory modernization. It undermines the intent of the 2024 Act, which was designed to replace outdated criminal frameworks with evidence-based public health regulation. The government’s failure to issue implementing regulations for the 2024 Act—despite its passage—has left a vacuum that the Poisons Act is now filling.
This move also raises concerns about the consistency of regulatory decision-making. The reversal follows a pattern seen in other Southeast Asian nations where regulatory progress is reversed due to political pressure or public health panic, even when scientific consensus supports harm reduction approaches.
Market operator signal: The lack of regulatory clarity and the sudden criminalization of previously legal products threaten to collapse the domestic vape supply chain, with long-term implications for tax revenue and consumer access.
Who is affected
- Vape retailers: Face immediate risk of prosecution for selling unlicensed nicotine products.
- Importers and distributors: Must halt operations or risk seizure of inventory.
- Manufacturers (local and foreign): Cannot legally produce or export vape liquids without Poisons Act licenses.
- Consumers: May lose access to regulated products, increasing reliance on unregulated or illicit markets.
- Government agencies: Tax authorities face potential liability for collecting duties on products now deemed illegal.
Dawsen Take
Malaysia’s reversal on liquid nicotine reflects a broader tension between public health policy and legal enforcement. While the Poisons Act remains a valid legal instrument, its application to nicotine in vaping products—already subject to a modern regulatory framework—creates an untenable legal contradiction. The government’s failure to implement the 2024 Act has left it unable to manage the market through regulation, forcing a return to criminalization.
This decision risks undermining public trust in regulatory stability and may deter future investment in the sector. The RM354 million in excise revenue collected since 2023 is now legally questionable, and the government may face financial and legal challenges if it attempts to retain these funds.
What to watch
Key developments to monitor include:
- Whether the government will issue emergency regulations to allow the continued sale of existing inventory under a temporary license.
- Any formal clarification on the legal status of excise collections and potential refund mechanisms.
- Whether the Ministry of Health will fast-track implementation of the 2024 Act’s regulations.
- Legal challenges from industry groups seeking to block enforcement of the Poisons Act on existing stock.
- Consumer behavior shifts, including potential growth in illicit trade or cross-border purchases.
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Original source: 2FIRSTS | Malaysia Liquid Nicotine Returns to Poisons List, Leaving Vape Retail and RM354 Million Tax Collection in Legal Uncertainty
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