Three people have died and 11 have been taken to hospital after taking what is believed to be the drug Spice.
Newcastle City Council said it was likely there was a particularly toxic variety in circulation after all three deaths occurred within 24 hours on Friday and Saturday.
Cleveland Police also said the number affected in the short space of time suggested they had taken a bad batch.
The council warned there was no way of knowing the effect of taking drugs.
"These drugs are variable in quality and purity so you can never know what you are using and the effect of mixing with other drugs or alcohol," a spokesperson said.
Cleveland Police said it was investigating and warned drug users "to be aware, refrain from their use, and seek immediate medical attention if they become unwell".
The force and the council have not specified the exact locations where the drug was circulating.