At the very end of the movie, when they put up the American Humane Society advisory about no horses being harmed by hair extensions, there was another stating that the Hobbit did not recieve any money from tobacco companies or promote tobacco products in any way.

So maybe they implied the products they were smoking were something other than tobacco, because a distributor like Disney had a policy of not promoting tabacco products to people under the age of majority, or because juristrictions (like Australia - in Australia, tobacco companies paying to include smoking in film are illegal under the Tobacco Advertising Prohibition Act 1992) don't allow it, or because government funding sources/ arts councils won't contribute to a film that promotes tobacco products to minors.

'Pipe weed' I don't mind (except for the implication that it distorts a person's judgement - there is no indication in the book that it does that). Longbottom Leaf, Old Toby, sweet galenas and even Southern Star, with smoke rings in every colour of the rainbow, are all in LotR if not the Hobbit, and might even wear a hint that Radagast had taken too much Lissuin or some kind of tonic Elrond had concocted to give energy to the weary. But the reference to mushrooms, the cross eyes, and the obvious psycodelic references were not justified by the book, and it seems very strange that a film that explictly refrains from promoting tobacco products to minors should be promoting recreational drugs that are not without dangers of their own, and illegal in many juristrictions where the Hobbit is screening.

And in Australia, where we have plain packaging laws for ciggarettes, you can purchase ciggarette packet covers (to cover up the sickening illlustrations of gangrenous feet etc) that promote the Hobbit, even if the Hobbit does not promote tobacco.