Yeesh, went through that sort of thing with my older son.
The "good news" is that sex between a consenting 16 y/o and an 18 y/o is PROBABLY not a criminal offense. You'd have to check the law where you live, but generally speaking, in most jurisdictions a 16 y/o is considered competent to consent to sexual activity, as long as the other party isn't a teacher, coach, or someone else with supervisory authority. Even with younger teens, there is often an exception where there is not a significant age gap (usually four years or so).
So yeah, kiddo needs to watch it, because mistake as to age isn't usually a defense (even if it's reasonable). The underage drinking (if others were served) is more likely to pose a legal problem.
ETA, I missed the stuff about the drugs. That's a huge worry, too. Lots of kids DO experiment (and that's all it is) but it's always a worry, especially when there's addiction in the family.
Hugs, it is SO tough to parent at that age.