A long-awaited tobacco licensing scheme will be rolled out in Victoria as black market vapes and cigarettes fuel a spate of store firebombings.
The Victorian government intends to introduce legislation to establish a tobacco retailer and wholesale licensing scheme in the second half of the year.
Premier Jacinta Allan said the move had been recommended as part of a review by the state's Commissioner for Better Regulation.
"The fundamental reason why we are pursuing this pathway is because ... smoking continues to be the leading cause of health illness and disease in our state," she told reporters on Thursday.
Smoking is estimated to kill more than 20,000 Australians each year, including 4000 Victorians.
The incoming Victorian scheme may involve applicants undergoing something akin to a fit and proper person test and the number of licences issued could be capped.
"This is one of the matters that is under active consideration," Ms Allan said.
The commissioner's report suggests a Victorian agency enforce the new scheme but doesn't say which one.
The government will consult with key stakeholders before deciding on an enforcement model and the premier flagged it could learn from other states.
Victoria had previously been the only state without a scheme or formal plans to introduce one, with Queensland's to begin in September.
Federal Health Minister Mark Butler last week introduced a bill to stop the importation, manufacture, supply, and commercial possession of disposable single use and non-therapeutic vapes.
Under the nationwide crackdown, offenders could face up to seven years in prison or be slapped with fines of up to $2.2 million.
Ms Allan said the Victorian licensing scheme would mainly focus on stamping out illegal tobacco as federal authorities were tightening up e-cigarette regulations.
There have been about 40 firebombings in Victoria linked to a conflict over the illegal tobacco trade.
The dispute is believed to include members of Middle Eastern organised crime groups and outlaw motorcycle gangs that use youths, street gangs and low-level criminals to carry out the arson attacks.
The premier attributed the delay in acting on the better regulation commissioner's recommendation to the firebombings, federal vape crackdown and COVID-19 pandemic.
"(The report) was undertaken at the height of the pandemic," she said.
"We were keen to look at how we could move on this last year but we did have to take into account the views of Victoria Police around the organised crime elements with illegal tobacco and also the changes at a commonwealth level."
Victoria's e-cigarette market is estimated to be worth between $306 million to $503 million across 461,000 users, according to the state's parliamentary budget office.
In November, Health Department Secretary Euan Wallace said Victoria was unable to keep track of how many retailers sold e-cigarettes and described manufacturers as "vendors of death".
In a joint statement, Quit, VicHealth, and Cancer Council Victoria said the incoming licensing scheme would ensure retailers are held accountable to existing laws.
"Too many retailers have been selling illicit tobacco, including to kids in school uniforms," VicHealth chief executive Sandro Demaio said.
"A licensing scheme will help us protect children and young people from dodgy operators who are putting profits ahead of the health of our kids."
Opposition consumer affairs spokesman Tim McCurdy accused the premier of caving to mounting pressure after months of inaction.
"Labor's failure to heed earlier warnings has allowed the illicit tobacco trade to grow rapidly, with criminal elements reaping profits," he said.
