A Sheffield man was arrested in an alleyway after police officers spotted a group of men and seized 60 wraps of crack cocaine, £1,000 and an axe.
The 18-year-old was arrested on suspicion of involvement in a drugs deal, following the incident in Scunthorpe, Lincolnshire, at around 3pm yesterday.
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He is being held on suspicion of possession with intent to supply a class A drug, possessing an offensive weapon and money laundering.
Humberside Police said he was arrested after undercover police officers spotted a group of men in an alleyway and found the drugs, cash and weapon.