Most people I know who still smoke tobacco grow and cure their own which is easy to do, but also there is a flourishing black market where chop chop sells for about half the price of taxed tobacco. As it costs so little to produce here or smuggle in the sellers are making big tax free profits.
If the tobacco tax was not so high then more people may buy legal tobacco and the government would collect some tax instead of none. Tobacco use is not declining only legal sales are.