I knew that a 'special cigarette' was something to do with marijuana, but I did not know that it was a covert device. In my (rather limited, and definitely not worldly) experiance, a 'special cigarette' was rather a lazy codeword or catchphrase for a joint, usually accompanied by some sort of obvious facial expression. Imagine:

Group of people smoking weed at a party. A person, not in good knowledge about smoking, walks over to the group

Newcomer: Hey, what are you guys smoking, is it a cigarette?
A Person smoking the joint: It's a special cigarette ((winks)).

Okay, not the best example, but I'm sure you get the picture.

In my understanding, it is not only limited to cigarettes - I've encountered:
  • Special coke: Coke with Vodka - drunk out of a coke can.
  • Special beer: Beer with speed in it, unobtrousively put in my beer at the Punk Pub Crawl.
  • Special vodka: Vodka with codeine in it.