I'm pretty sure he was talking about pipe weed. I don't think pipe weed could actually "slow your mind", it was just Saruman's way of saying that Gandalf spends too much time with the Hobbits, and that the stupidity of the Hobbits is "rubbing off on him" so to speak.
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If you would convince a man that he does wrong, do right. Men will believe what they see.~Henry David Thoreau
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