Yes hallucination is a side effect of long term Chantix use in some people and if you do start hallucinating while taking Chantix you should stop taking the Chantix and speak to your doctor about it.
Other side effects that Chantix can cause are agitation, hostility, depression, suicidal thoughts, panic, aggression, anxiety, anger, paranoia, abnormal sensations and even confusion.
When you experience those things or any of those things a doctor should be told about them because the Chantix could be doing you harm and you should cease taking Chantix until a doctor advises you to continue or switches you to something else.