NSW Tobacco Licensing Schemes – Grace Period Expired: Landlords Must Act Immediately

The NSW Tobacco Licensing Scheme commenced on 1 July 2025. The three-month grace period ended on 1 October 2025, meaning all retailers and wholesalers of tobacco and non-tobacco smoking products in NSW must now hold a valid licence. Landlords should urgently confirm tenant compliance and implement monitoring processes to mitigate risk.

Who Needs a Licence

Wholesalers and retailers of tobacco and non-tobacco smoking products in NSW are required to hold a valid tobacco licence which must be renewed annually. With the exception of pharmacies, no premises may sell vaping products. All premises selling tobacco or non-tobacco smoking products must now hold a valid licence.  

Tenants that have not obtained a valid licence must immediately cease trading tobacco products until a licence is obtained. Significant penalties apply for non-compliance.

Key Dates

From 1 October 2025, all retailers and wholesalers of tobacco and non-tobacco smoking products in NSW must hold a valid licence. 

In this regard:

• If you applied on or before 1 October 2025, you may continue trading until your application is decided. If your application is refused, you must stop selling immediately.

• If you did not apply by 1 October 2025, you cannot trade from 2 October 2025 and face significant penalties for doing so.  

• Application lodged after 1 October 2025, only allow trading to begin once a license is granted. 

NSW Health inspectors will monitor compliance, and enforcement action may be taken against unlicensed operators.

Key Implications for Landlords 

• New Lease Termination Powers: Landlords will have the ability to terminate a commercial lease if a tenant is found to be selling illicit tobacco or operating without a valid licence. The power is contained in the Tobacco Legislation (Closure Orders) Amendment Bill 2025 (Bill), which has been passed by Parliament but not yet commenced. If a closure order is issued, the lease is deemed to include a landlord termination right. The tenant will not be entitled to sue the landlord, seek  compensation, or access dispute resolution in respect of such termination.

• Potential Future Penalties: The NSW Government is consulting on the introduction of offences for landlords who knowingly permit unlawful tobacco activity. This may expose landlords to penalties in the future.

Practical Takeaways for Landlords

• Confirm that any tenant trading tobacco or non-tobacco products now holds a valid licence. 

• Monitor tenant operations and respond immediately to closure orders or evidence of unlawful activity.

• Keep records of actions taken to prevent or address breaches, in order to rely on reasonable excuses protections.

Conclusion 

The NSW Tobacco Licensing Scheme now applies in full to all retailers and wholesalers of tobacco and non-tobacco smoking products in NSW. With the grace period now expired, landlords should take immediate steps to confirm compliance and reduce exposure to future risks.

For guidance or assistance in reviewing lease arrangements and compliance obligations, please contact our people.

Eollyn Cortes 0478 727 395

Sagang Chung 0431 435 333