Police spotted two men, aged 52 and 49, acting suspiciously on Stafford Road at around 5.40pm on Wednesday, March 24.
A spokesman for Staffordshire Police said: "The 49-year-old, from the Cannock area, was found in possession of a small amount of crack cocaine.
"A subsequent search of the home address of the 52-year-old man found a quantity of cash, class A drugs, a bladed article and a quantity of cannabis.
"A 19-year-old man from Birmingham, who was present at the address, was also detained.
"The 49-year-old man was interviewed by police before being issued with a conditional caution.
"The 52-year-old man, from the Cannock area, was arrested on suspicion of possession of supplying class A drugs, while the 19-year-old man was arrested on suspicion of being concerned in the supply of class A and B drugs.
"Both remain in police custody."