I know this is late in the thread, but I worked at the Goodman this past spring. We used one herbal cigarette per show. This was posted on numerous signs throughout the lobby. I knew of no other legal hurdles at the time.
There are two main brands that I have used, Dream & Ecstasy. My actor prefered Dream (said they were less harsh), but only Ecstasy was available. Both smell terrible. But if the ventilation is good, the audience won't notice for long.
While preparing for this tour, I discovered New York State passed a law prohibiting the import of herbal cigarettes. Since then, I've traveled out to Hoboken, NJ to purchase them. For this particular production, the Goodman purchased a carton of Ecstasy cigs online.