They're are large profit margins to be made off of either cutting drugs (if you're nice, with something inert, if you're not, just with something cheap) or for things like LSD, selling research chemicals that are similar yet different and massively cheaper to manufacture/buy than the real thing.
"Hmm, do I potentially poison myself for a savings of a couple of bucks? I might die... but it _is_ three bucks..."
Not really, no.
For example: spike heroin with fentanyl, user dies, other users flock to that dealer who supposedly has extremely high quality heroin.
This tactic doesn't work as much now that the fentanyl epidemic is widespread and known but it certainly happened in the past.
Also, many dealers are addicts themselves. If they run out of money and need more drugs, what's the chances they will sell some bullshit and claim it's something else? What if they get into some other kind of trouble and need fast cash?
Most illegal drugs are potentially deadly, and some share of users are going to die from them. Even rationally, cutting with cheaper but more toxic material can be justified if the increase in profit per transaction is sufficient to outweigh the reduction in the expected number of transactions per customer.
Of course, also, drug dealers may not always act rationally, and may not even understand the hazards (either in isolation or due to combination with the drug in question) posed by ingredients used to cut drugs.
Why are the drugs in the illicit marketplace the ones with such small active doses? Prohibition strongly incentivises the manufacture/transport/sale of drugs with higher potency (per unit volume) -- as the odds of detection go up with bulkiness: https://en.wikipedia.org/wiki/Iron_law_of_prohibition
My guess is 'poison' was a slight hyperbole.
As always with opiates, the real issue is improper manufacturing/labeling. Even IV users would be mostly fine if they had properly labelled IV ampoules.
The point is dealers will cut with unsavoury shit. They're not stupid enough to cut with poison but they are stupid enough to cut with shit that will turn people away.
Actually it's not unlikely.. South Dallas has a problem with stuff - cheap heroin cut with Tylenol PM. cheap and common. about $3 a hit.
Plus emphasis on sedative. Paracetamol has a synergistic effect with opiates. It wouldn't do the opposite of what it's meant to do. It's more like mixing caffeine tabs with heroin.
Heroin cut with Tylenol would be a non-issue to a heroin addict. Heroin is considered dirty to the many people who these dealers serviced (yeah I know). I doubt they served many of any cocaine addicts. Just people with nothing better to do on a Friday looking to have a "good time".
I know they no longer deal because one got run out of town after squandering about a thousand quids worth of the stuff on loan with nothing to show for it.