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Police were conducting the operation on State Highway 94 on Friday, checking for drink-driving, the use of seatbelts, cellphone use and other driving offences.
Staff stopped a car coming from Gore and heading towards Te Anau, police said.
They caught a strong smell of cannabis and invoked a 2012 Search and Surveillance Act search of the vehicle.
Two large chilly bins located on the rear seat of the vehicle were found to contain 1kg of cannabis head and more than $500 in cash.
The sole occupant, a 29-year-old man from Te Anau, admitted he had just bought the cannabis in Gore.
Te Anau staff continued inquiries at the man’s home in Te Anau, where they seized more cannabis, more than $2000 in cash and drug-dealing
Sergeant Tod Hollebon, of Te Anau, was pleased with the outcome.
"This has resulted in police taking a substantial amount of cannabis off the street, and uncovering a significant growing operation," he said.
Further investigation was carried out and revealed a 45-year-old Gore man was allegedly responsible for the sale of the drugs.
A search of a Gore property was undertaken and about 3kg of cannabis, several cannabis plants and $10,000 in cash were seized from that address, police said.
"I am proud of our local police working together across the borders in Riversdale, Mataura, Gore and Invercargill, which has resulted in two arrests so far," Sgt Hollebon said.
Both men were arrested. The 29-year-old will appear in the Invercargill District Court on drugs charges and the 45-year-old man will appear in the Gore District Court on similar charges.
Inquiries were continuing and further charges could be laid, police said.