Some drugs are capable of permanently transforming a "sane" individual into one with psychosis or other permanent mental disorders. Even alcohol has been shown to have this effect in some heavy long term users. It's even more common in meth users. It is not "pure bullshit."
Per https://www.health.harvard.edu/blog/teens-who-smoke-pot-at-r... if you have marijuana while young and no other particular risk factors, your chances of becoming psychotic increase by 7/1000. The combination of you had to take it while young and this low rate make it a poor choice of a way to abuse dissident adults.
I don't think it's safe to assume these regimes would favor chemically induced insanity over murder/assassination/execution. For starters, induced insanity wouldn't provide a supply of organs. For another, those in power might fear that the procedure could become reversible, or may have efficacy that wears off over time (these fears may well be ungrounded but still sufficient motivation.) This is to say, there is a finality to death that's hard to match. Furthermore, if it only works "naturally" on a small segment of the population then it's not a forgone conclusion that Putin could snap his fingers and have it weaponized such that it's effective on everybody.
Also keep in mind that inducing insanity reliably can already be done today using very primitive technology. Prolonged sensory deprivation, or even just social isolation, takes a hard toll on people. That's a pretty reliable mechanism from what I understand, and is considered a heinous form torture by many, yet these governments still choose kill people. They could also give people lobotomies or fry their brains [ab]using electroconvulsive therapy, but they still choose to kill people.
There are definitely neurotoxic substances that can induce psychosis or other problems (such as parkinsonianism) but these tend not to be very usable either clinically or recreationally. I think overall, the chance of cardiotoxic or repository depression is more of a common problem with most common recreatioal drugs at common doses.