Guys, calm the fuck down. Some of ya'll're making this shit sound like crack-cocaine or heroine, when it's really more like canabis.
Disclaimer: I'm not saying that what MC is doing here is right from a legal standpoint in this setting. Everything else regarding the morality of the MC's choice is up to you guys to decide on, but you may wanna read the rest of this first before you go off all half-cocked on a fit of autistic rage-screeching. (Trust me, I'm on the Spectrum myself, so I know how it is...)
Canabis is relatively harmless, though it does have the tendency to alter your perceptions - that being how well you perceive sights and sounds around you, and delay your reaction times. That said, the primary dangers in canabis are the same reasons why you're not supposed to drink alcohol and then operate a motor vehicle or machinery.
Canabis is not an addictive substance in the traditional sense. People can become addicted, but it's not a chemical dependence. Instead, it's a psychological dependence, which is an entirely different kettle of fish. Suffice to say, psychological addictions are pretty rare, all things considered, and usually only happen if a person has severe psychological issues in the first place.
It also has quite a few beneficial properties for all kinds of things, not the least of which is relief of severe pain. Cancer patients have used it to thwart the ill effects of chemotherapy (which any cancer survivor will tell you: the cure is definitely worse than the disease!) or help alleviate psychological conditions such as Major Depression and Anxiety Disorder.
And yet, this stuff is illegal in most of North America.
Why?
Simple. It was born out of one of the USA's fits of xenophobia. Way back when the Prohibition Bill was being crafted, someone wanted to do something about all those "Dirty Wetbacks", so they started a campaign that demonized canabis use and inserted it as one of the prohibited items in the bill. And, unlike booze, that part never got repealed and it stayed on the books as a controlled substance.
This "Dragon Tears" incense circumvents the hazards of most halucinogenics in that its halucinogenic properties primarily effect a person's dreams. In fact, from the sound of it, this stuff seems to let normal people have lucid dreams... which is a very rare and very WOW kinda thing! Lucid dreaming is awesome because it's like you're Neo inside The Matrix - you have full control of what you do in your dream, and you remember everything. It's the ultimate form of escapism!
That said, I can understand why this stuff would be restricted. It'd be all-too easy for people to become psychologically addicted to something like this. But at the same time, I could see why there would be people who could use it.
That said, I think this is one of those things where the only reason why it's illegal is to limit how much this stuff gets spread around. As we've seen so far, it's relatively easy to get around all the checkpoints and roadblocks associated with producing and distributing this stuff. In this sense, it'd deter people who are adverse to that kind of risk-reward ratio, and catch only the ones who are not smart enough to stay in the business.
This would leave just enough of a black market so that only those who are desperate enough or wealthy enough would be able to get their hands on this stuff. And this is evidenced in that the kingdom's primary means of curbing the use of this stuff is by policing the trafficking and not dealers. Which, in turn, was evidenced in how easily the Main Character was able to find people who were willing to buy from him.