Heroin thats 100% pure and turns blue when u put some chemical to it. It could be smoked because it's pure enough as opposed to injected. Frank Lucas used it as the brand name for the heroin he was selling during the late 60's and early 70's. He made millions off of this because he was able to cut off the middle men and go directly to the source in vietnam to buy it. Jay-z also made a song called "Blue Magic" on his soundtrack "American Gangster" based off the movie.
"Blue Magic, that's a brand name, like pepsi. That's a brand name, I stand behind it, I guarantee it. They know that even if they don't know me any more than they know the chairman of General Mills"