Baby teeth are used as reagents in Mordecai's spells. He purchases them from Talia.
Baby teeth also seem to be an essential ingredient in Mordecai's cakes, which doesn't go well with the rest of MMFEC. Cromwell may have picked up the habit.
One of the two birthday cakes presented to Ma1nfram3 on her birthday in Ep 30, the one allegedly baked by Sharky, contains baby teeth.