[The ruling on hospitality when the host deals in narcotics]

The answer – and Allah is the One who grants success – is that what appears to me is the permissibility of both matters; thus there is no objection to eating from his food and borrowing from his wealth.
The proof for that is that the Prophet of Allah (May Allah bless him and his family and grant them peace) used to buy food from the Jews while he knew that they consumed usury and unlawful gain, and likewise did the Companions.
And the Prophet (May Allah bless him and his family and grant them peace) stipulated upon the Christians of Najrān, in his peace treaty with them, that they host the envoys of the Muslims for twenty days.

Source: Min Thimār al-ʿIlm wa al-Ḥikmah vol.2