What will you do if something like this is happening around you? Why would a drug dealer want to learn Bitcoin if not for a safer haven for running the business?
If you believe that by teaching him how to use bitcoin, it will help him overcome his busniess and start a new life as a better person, then sure but if you fear that he might use it to improve his drug dealing business, I would advise against it. I mean It won't be that good to just use bitcoin for a way of payment of selling drugs, you just think what's the best for you and for him i guess:)
If the OP knew what his neighbor's real goal in learning bitcoin was, he wouldn't hesitate and come up here to ask our opinion. I think what he's afraid of is that his neighbor is using bitcoins for their illegal work and that will affect OP's safety if his neighbor gets caught. The OP is in a dilemma because he doesn't want to offend his neighbors, nor does he want to lose his own safety. But in my opinion, to avoid the risks, OP should refuse rather than teach him bitcoin.