The social network has apologised, saying a glitch had prevented it from properly screening posts and removing those that violated its policies.
Marketplace offers users a way to buy and sell items to and from others in their local area.
An earlier version of the facility used to be available on Facebook's website.
The New York Times was among the first to report the problem, and said some of the adverts "would not have been out of place on the online black market Silk Road", whose operators were arrested in 2013.
The BBC spotted adverts for cannabis, a snake and what appeared to be prostitution among the content.
"As we expanded Marketplace access, we encountered a technical issue that prevented our reviewing system from identifying some posts that violated our commerce policies and community standards," a spokesman for Facebook said.
"As a result, certain posts with content that violated our policies were made visible to people visiting Marketplace.
"We are working to fix the problem and will be closely monitoring our systems to ensure we are properly identifying and removing violations before giving more people access to Marketplace. We apologise for this issue."
Facebook has previously faced criticism for hosting adverts for illegal products,including guns, drugs and counterfeit goods, elsewhere on its services.