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Here in Canada, we have a loophole in the law where indigenous have the right to use tobacco without taxation due to tradition. Which is totally fair - but it also applies to modern mass produced cigarettes for some reason.
As a result of ever increasing taxes on tobacco, I would reckon that at this point 80% of cigarettes smoked in my community have been smuggled off of a reserve. The black market is booming with "Rez smokes" selling for $5-10 a pack while legal cigs go for ~$30.
The federal government recently introduced a regulation mandating a health warning printed on every cigarette. Most agree it's a transparent attempt for the police to spot an illegal smoke in your hand, as Rez smokes don't have warnings on them. They are losing a ton of revenue to the black market, and are trying to crack down with heavy fines for even possessing a pack off of a reserve.
I definitely agree with taxing cigarettes more, but if you get to the stage where organised crime starts doing arbitrage, you've gone too far.