After the war Germany suffered from hyperinflation. The people had much money but it was nothing worth. Cigarettes were limited and had a high value. That is the reason why they used cigarettes as currency.
I tried it this week with a few friends who are smoking but I had no success. The best thing I got for a cigarette was a piece of chocolate.
I think that these days you have to take other things than cigarettes to replace money. Something which has a greater value and you do not have unlimited access to it. The euro is widely accepted in Germany. We do not have a lot of problems with it. So nobody wants to replace money by cigarettes.
If one day the euro will suffer from hyperinflation an alternative currency would perhaps be a solution.