Allegedly dodgy tobacco was found in five out of seven Blackpool shops during raids by Trading Standards, the council said.
Around 2,000 packs of illicit cigarettes were seized alongside around £3,000 cash, the authority told The Gazette.
Images released earlier today appeared to show allegedly illicit cigarettes and tobacco pouches stashed in a hidden compartment behind packets of sweets, and an empty drawer hidden behind a skirting board.
The use of sniffer dogs - called Birch, Bruiser, Buster, Billy, and Ted - from specialist firm Wagtail UK was credited with the find, while officers from Lancashire Police also helped.
A council spokeswoman said: "Illicit tobacco is a significant problem in Blackpool and is responsible for a very large percentage of the tobacco that gets into the hands of children.
"We are proud to be taking a tough stance against those who sell illicit tobacco, and will continue to do so."
The council did not name the shops, but is understood to be preparing to launch legal cases against them.
Illicit tobacco takes several forms.
It can be legally made elsewhere and imported into the UK without duty fees being paid or the appropriate health warnings being present.
They can also be counterfeit knock-offs masquerading as legal brands despite being made illegally.
Last year, an operation to disrupt the sale and supply of illegal tobacco in Blackpool uncovered more than 45,000 cigarettes and 17.6 kilos of hand-rolling tobacco from five shops in the
Around 13 officers from the Government's Revenue and Customs department (HMRC) were joined by Trading Standards and Lancashire Police officers for the searches last September.
Some 414 knock-off USB charger cables were also seized.
Elaine Davies, who runs an HMRC taskforce, said at the time: "The sale of illegal tobacco will not be tolerated by us or our partner agencies.
"Disrupting criminal trade is at the heart of our strategy to clampdown on the illicit tobacco market, which costs the UK around £1.8 billion a year. This is theft from the taxpayer and undermines legitimate traders.
“We encourage anyone with information about the illegal sale of tobacco or alcohol to report it online or call the Fraud Hotline on 0800 788 887.”