Please do not lose sight of the young man's future career and the implications even a passing connection with somebody dealing in illegal drugs might have. Despite Richard's, I believe unhelpful, comment that "To make matters worse I doubt whether the university will do anything useful", I would still advise speaking to the university if he is training for a licence to practice in some field allied to medicine. At the very least they will have it on their records that he reported it should the need arise for such evidence to be produced to a professional body etc.