While I do not know if this applies to the Apple smart keyboard, I use the Logitech Create keyboard which also connects via the smart connector and have run into this problem, as well. I found a solution (or more of a workaround) after a little web searching. On the Logitech case there is a button that will bring up the on-screen keyboard. Once you do this you can simply press on the microphone icon on the on-screen keyboard and begin dictation. As I do not own the Apple Smart keyboard, I'm not sure if it has a key dedicated to invoking the on-screen keyboard. If it doesn't, try pressing function-3. If I recall correctly, This should bring up the on-screen keyboard.
Hope this helps.