There is an old adage about a fool and his money parting ways, and the bigger the amount of money that is dissipated, the bigger the fool. In 1998, the Master Settlement Agreement (MSA) between big tobacco and the 46 States (four States had already signed separate agreements) and territories was agreed upon. The MSA covered a lot of ground, including specific restrictions on big tobacco in regards to advertising, sponsorship, and youth targeting. The big kicker to the whole deal, however, was the truly massive payments to the signatories, based on cigarette sales, to which it was estimated that the States would receive in the neighborhood of $200 billion dollars in the first 25 years of this settlement. While the ostensible reason for the payment to the States was to help setup programs to discourage youth smoking and to set aside funds for medical needs that addressed smoking health issues, there was nothing mandated to the States which would force their hand in doing so. Not too surprisingly, most States have spent little money on smoke cessation; instead, they have used this "found money" to help cover budget deficits, to replace school bonds, and to provide general health and elderly care.
Unfortunately, the States have also run into some problems with the bonds that they issued for this revenue stream. While the States were wise to project that smoking rates would decline in America, their projections of the decline in smoking was too pessimistic, in other words, the amount of cigarettes being consumed in the United States has been declining at a far higher rate than anticipated, which has a material impact on the amount of money to be received and consequently impacts negatively the worth of their bonds issued. Additionally, whenever there are massive amounts of money involved; one should thereby anticipate that there will be novel legal disputes. Big tobacco has fought against the States in regards to how much money that they should be paying as part of the MSA because they are allowed to reduce their payment based on market share that has been loss to manufacturers that were not signatories to the MSA, especially when the States have been lacking in "diligent enforcement" of collecting those payments from the other cigarette manufacturers. This means, that most States will not collect as much money as they anticipated from big tobacco, because in actuality they are settling their disputed payment amounts for less than full value to the dollar.
As disappointing as the foregoing has been to the States, many States have done their constituents a far greater disservice through the securitization of these cigarette-based bonds in exchange for upfront and discounted money today. This is the same type of problem and ill-thinking that brought down the mortgage and housing industry in 2008 and is threatening to wreak havoc in State governments today that have already spent their tobacco money and now are on the hook in the future to make good on their payments to the bondholders, sometimes with massive balloon payments.
Consequently, it isn't any real stretch of one's imagination, to conclude that States do have a vested interest in the amount of smoking and the annual consumption of cigarettes in their State, and they might well conclude that they need more smokers.