North and South Carolina only entered the lawsuit so as to lessen its effect on the tobacco industry from within. So it should come as no surprise that North Carolina would spend it to help the tobacco industry. North Carolina is probably the only state not being hypocritical with the money.
Amen, NC was very up front about using the money to help tobacco farmers, who were only growing a legal crop.
Part of the problem for tobacco farms is that tobacco provided the greatest revenue per acre of any legal crop. Many farmers had sold off acreage, allowing their farms to shrink to the size of their tobacco allotments.
Now, if they give up their allotment, there is no legal crop that will provide them with the same revenue.