Police stopped a vehicle believed to be involved in drugs activity near to the Blue Bell pub on Ladgate Lane in Middlesbrough on Wednesday night, 10 January.
When officers approached the black Ford Focus the passenger of the vehicle fled, making off on foot. Officers chased him and he dropped a bag as he managed to escape.
The bag contained a large quantity of drugs suspected to be heroin and crack cocaine, and a large quantity of cash.
The driver of the car, a 33-year-old man, was arrested on suspicion of possession with intent to supply class A drugs. He was taken to police custody for questioning and later released on police bail pending further enquiries.