Shag, also known as rolling tobacco and loose tobacco is fine-cut tobacco

Tobacco

Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...

 used to make self-made cigarettes by hand rolling the tobacco into rolling paper or injecting it into filter tubes. It got its name from the finely cut strands appearing like 'shag

Shag (fabric)

A shag is a rug or carpet that has a deep pile, giving it a shaggy appearance. Shag carpeting is sometimes evoked as an example of the esthetic from the culture of the 1970s in the United States....

' and was originally considered poor quality. Various types of cut are used; most shag blends use a simple mixture of cutting styles, consisting mostly of loose cut but also krumble kake, ribbon cut and flake may be used.