Potions are able to heal your Morphs back to full health. This can also be done by using the date and times setting cheat in Cheats. You can use them in town or while out adventuring and exploring the island with your Morphs.
How to Obtain:
-Purchasing at the store for 2 Cash.
-Lining up 3 Potion icons on the slot machine. Which can be found when searching a treasure chest.
-Very rarely on an unsearched tile.
-Even more rarely as a prize for a practice game in the training building.
-Very rarely dropped from Morphs for a reward in battle.