In 1968, Frank Lucas is the right-hand man of Harlem gangster Ellsworth "Bumpy" Johnson. When Johnson dies of a heart attack, Lucas takes control of the Harlem crime scene.
After handing in almost $1 million that he found in a mobster's car, Newark detective Richie Roberts is ostracized in his precinct. After his exiled and addicted partner overdoses on a potent brand of heroin called "Blue Magic", Captain Lou Toback puts Roberts in charge of a task force that targets local suppliers. Lucas buys Blue Magic directly from producers in Thailand and smuggles it into the U.S. through returning Vietnam War servicemen. His low overhead allows him to eventually wholesale Blue Magic to most the dealers in the New York area. With this monopoly, Lucas expands his control to nightclubs, casinos, and prostitution. He buys a mansion for his mother and recruits his five brothers, including Huey and Turner, as lieutenants to spread his empire. During his rise to becoming Harlem's crime boss, Lucas falls in love with Eva, a Puerto Rican beauty queen.
As Lucas' business prospers, he makes a point of operating quietly and dressing with a modest conservatism both as a sign of strength and to avoid attracting police attention. Also, he stays away from the drugs to avoid making hard decisions under the influence. However, Lucas violates these principles when he attends the Fight of the Century with Eva, sporting gaudy clothes that were a present by Eva; Roberts attends the fight, notices the previously unknown Lucas with even better seats than the Italian mobsters, and investigates him. Meanwhile, Lucas needs to deal with Lucchese mafia boss Dominic Cattano, who threatens to destroy Lucas' family unless he gets in on a deal, and corrupt NYPD detectives led by Nick Trupo, who attempts to extort and blackmail him to give them a cut. Lucas must also compete with local crime figure Nicky Barnes, a young gun trying to take over Harlem who has been diluting Lucas' Blue Magic and selling it under the same brand name. After the Fall of Saigon cuts off Lucas' supply, he is forced to rely on the other crime rings.
Roberts' detectives witness Frank Lucas' cousin and driver shoot a woman and then use the threat of a long sentence to get him to wear a wire. The gathered information allows Roberts and his task force to identify and search one of the last planes carrying Lucas' stock, discovering Blue Magic in the coffins of dead returning servicemen. With this evidence they obtain a warrant to follow the drugs into Newark's projects and Lucas' heroin processing facility. In the ensuing shootout, Steve Lucas, Frank Lucas' young nephew who gave up a promising career for the New York Yankees to join Lucas' crime family, is killed. Meanwhile, Trupo, whose prized Shelby Mustang Lucas had destroyed, and his men break into Lucas' mansion to steal his emergency cash supply hidden under the doghouse, killing the dog. As Lucas gets ready to go after Trupo, his mother dissuades him from killing a cop, warning him that she and Eva will leave him if he does. Lucas is arrested after Roberts' team conducts a raid on the shops run by his brothers.
In the police station, Lucas offers to bribe Roberts, but is rebuffed. Instead, Roberts offers Lucas a chance at a shorter jail sentence if he aids his investigation of dirty cops in the NYPD and Lucas duly provides Roberts with the names. In the end, three quarters of the New York DEA are arrested and convicted, and a distraught Trupo commits suicide. Roberts, having just passed the bar exam, defends Lucas as his first client. Lucas is sentenced to 70 years in prison, of which he serves 15 years and is released in 1991.

Question: What is blue magic?
Answer: A brand of heroin
Alternative answer: A potent brand of heroin.