Green’s Dictionary of Slang

cut adj.3

[cut v.6 (4)]

1. of drink, adulterated, diluted, weakened.

[US]Stephen Graham N.Y. Nights 75: Our rye is cut many times over.
[US]V.F. Nelson Prison Days and Nights 205: Plenty of liquor – good stuff, too; none of this cut stuff.
[US]‘Lou Rand’ Gay Detective (2003) 77: ‘Say, Joe, this is sure better liquor than we got out there.’ Cannelli laughed. ‘It better be. It isn’t cut.’.
[US](con. 1958) R. Farina Been Down So Long (1972) 48: Nasty lush: ethyl alcohol cut with Gallo sauterne and tequila.

2. (drugs) adulterated, diluted.

[US]N. Algren Man with the Golden Arm 24: Nifty Louie was pushing a heavily cut grade of morphine.
[US]E. Reid Mafia 68: In Italy [...] the price per kilo ranged from $1000 to $ 1500; you can figure the dope pushers’ profit on the cut stuff they sold their customers.
[UK]T. Keyes All Night Stand 121: I’ve got this very good congo, not cut, ya know.
[US]B. Greer Slammer (1977) 90: I could get an ounce off the street — uncut — five grand.
[UK]M. Amis London Fields 36: The heroin, the cut coke, the Temazepan, the dihydrocodeine he has always refused.
[Scot]I. Welsh Trainspotting 12: That meant thit it [i.e. heroin] wisnae cut too much, wi anything too toxic.
[US]C. Goffard Snitch Jacket 40: A few ounces of pot, 10 or 12 skankweed dime bags generously cut with oregano.
[US]Codella and Bennett Alphaville (2011) 119: A pair of upper tier main dealers [...] are stepping on already cut dope he fronts to them.
[Aus]D. Whish-Wilson Zero at the Bone [ebook] It was uncut. He never used cut. She’d have been used to street shit, 10 per cent pure. But this was all pure. She’d hit ten times her usual spike.

In compounds

cut deck (n.) [deck n.4 (1)]

(drugs) heroin or morphine mixed with powdered milk.

[US]Goldin et al. DAUL 54/2: Cut-deck. Adulterated morphine or heroin mixed with powdered milk.
[US]ONDCP Street Terms 7: Cut-deck — Heroin mixed with powdered milk.