A second-hand shop owner was arrested in Cape Town on Wednesday after he was found to be in possession of drugs, police said.

Constable Mbulelo Mafuna said he was apparently also doing business without the proper trading documents.

The 35-year-old Ethiopian was arrested at his shop at the corner of Hout and Burg Streets, with two women, aged 18 and 30.

"They were arrested during [an] operation aimed at checking for compliance by second-hand dealers," said Mafuna.

He said police seized R81,500 in cash and a quantity of the drug Cat --methcathinone, which is similar to an amphetamine and can be snorted, smoked or injected.

The three would appear in the Cape Town Magistrate's Court on Thursday on charges of non-compliance with the Second-Hand Dealers Act and possession of drugs.