Is it permissible to give zakat al-mal to needy nephews (sister's sons) who smoke and support their families, by purchasing essential groceries for them?

It is permissible to give zakat to your poor nephews (sister's sons), and it is better due to the hadith: "Charity given to a poor person is one charity, but charity given to a relative is two: charity and upholding the ties of kinship."

Zakat should be paid in cash, not in goods. The fact that they smoke does not prevent you from giving it to them, unless you know for certain that they will use it to buy cigarettes, in which case it is forbidden to give them cash.

You can inform them that there is zakat for them and then, acting as their agent, purchase their necessities for them. This is a good solution.