This report is taken from the Scotsman 17 Sep 1836.
“On Wednesday M’Levy, the criminal officer, in passing down the Pleasance, observed a young lad dressed as a sailor with something concealed under his jacket. Mclevy followed him into an entry, where he took from him the parcel he was carrying, which first appeared to be snuff, but on a close inspection proved to be a villainous imitation of the article, consisting of ground peat, ochre, salt &c. The boy was conveyed to the Police Office where he stated that he had been employed by the compounders, who had established themselves in the Cowgate, to vend the article as smuggled snuff. He also stated the names of several shopkeepers who had been weak enough to purchase the article under that impression and on making enquiry at these individuals, it was found that some of them, on discovering the imposition, had committed the very reprehensible act of mixing it was genuine snuff, with a view to disposing of it by that means. The police are on the watch for the principals in this manufacture, and in the meantime have seized on the utensils.”
Snuff is a smokeless tobacco made from ground or pulverised tobacco leaves. It is inhaled or “snuffed” into the nasal cavity, delivering a swift hit of nicotine and a lasting flavoured scent (especially if flavouring has been blended with the tobacco). Traditionally, it is sniffed or inhaled lightly after a pinch of snuff is either placed onto the back surface of the hand, held pinched between thumb and index finger, or held by a specially made “snuffing” device. See https://en.wikipedia.org/wiki/Snuff_(tobacco)