"Once the child has a substance he has claimed is an illegal drug, how is the principal supposed to verify that it is indeed powdered sugar? "
In a totalitarian regime where laws are structured so as to revoke common sense as a tool for principal determinations, the principal shall not challenge the veracity of the child's statement: "it is a drug." In a totalitarian regime, the principal is required by law to call the police so the police (the one and only true totalitarian authority) can determine the veracity of the child's statement...then naturally, in a totalitarian regime, the child is punished whether it was a drug or simply Dixie Crystal from grand ma's pantry. This is done in a totalitarian regime in order to socially engineer the behaviors of other children who might consider playing such a silly little game while attending public schools.
Anyone of right mind knows that in a totalitarian regime, there is zero tolerance for child's play especially in public schools.
Then perhaps the child should not lie about what is in the bag? He has some responsibility here.