Complex sentence: Some states had legislation forbidding "giveaways" or "enticements" to buy (such as a free lighter or an ashtray) was circumvented by making the steel case the packaging.
Split into simpler sentences: Some states had legislation forbidding "giveaways" or "enticements" to buy (such as a free lighter or an ashtray). This legislation was circumvented by making the steel case the packaging.