Importing whole-leaf (ie. 'unprocessed') tobacco is easy. It just takes time. (About six weeks from go to whoa).
The Government has been threatening to make changes to the whole legality but it's still relatively simple as of right now.
However, there's a few things to know -
1. Yes, it's totally legal and free of duty - so long as you're importing 'whole leaf' (not stuff that has been partially processed and not still on the stem).
2. Despite hearing figures like 'ten pounds', if you buy more than 8 pounds at a time you are very likely to invite difficulties. It's a bit unclear just to what the threshold is for Customs to declare a consignment to be a 'commercial quantity' but if they do they'll want excise duty from you at over NZ$1000/kg. What is certain, however, is that once the totalcost of an order exceeds NZ$400 (including freight) you will have to pay Import Duty.
I order in eight pound lots. At the current exchange rate this costs around NZ$360 keeps me safely inside the $400 threshold.
3. Don't order anything other than tobacco in the parcel if you don't want to pay extra costs. This is because when they heat treat the package (and it's declared on the label to be anything other than solely tobacco) they will separate the items and charge you an additional courier fee to deliver it.
4. You will almost certainly get hit with an extra $45 Treatment fee. This is what makes the process 'take time'. They really stuff around. The parcel only takes a week to reach NZ but usually six weeks pass before it drops on to your doorstep.
So, really, all this aside, the process is that 'simple'. Just go ahead and order with confidence. You'll need to buy a decent shredder - that's all.
You should find that, once you have de-stemmed and shredded the leaf it will have cost you about NZ$140 a kilogram. Loose tobacco (bought in a 50g pack) at the store would cost you around $1800, so the imported wholeleaf is about a twelfth the price. (I get mine down to at least a fifteenth of the price because I don't waste the stem).
There's lots to this whole matter, and I don't want to confuse things, but although what Riverstone has said about being allowed to only grow 15kg of dried leaf for personal use is true, I don't know just what limits are applied to imported wholeleaf. As far as I know, provided it is imported in 'small' quantities (not subject to Duty) I think it is quite lawful to possess and use, but not sell, any quantity.