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Poisons the target.
If the existence of Toxic, a move that 100% outclasses PoisonPowder, isn't enough reason to not use it, there are plenty more reasons besides. The fact that all Pokemon that learn it can also learn Stun Spore, Sleep Powder, or the powerful Spore also spells doom for PoisonPowder. The fact is that paralysis and, most importantly, sleep are much more important forms of support than both forms of poison. Don't use PoisonPowder, as all of its potential users always have a better status move, better even than Toxic.
Toxic is a better alternative, as it badly poisons the target instead of regular poison.