Pizza Gigi’s owner, 57-year-old Salvatore Crimi, sold the drug from the restaurant, Toronto police alleged.
They have seized marijuana with a street value of 1m Canadian dollars ($1m; £618,811) from a takeaway pizza restaurant, cocaine, other drugs and 8,000 Canadian dollars in the search.
Investigators obtained a raid after watching customers enter and leave without any food.
The restaurant was popular with University of Toronto students, has been at its location for 30 years.
Toronto Pc Wendy Drummond told the BBC the restaurant was located in a residential area and that the investigation had been sparked by neighbors’ complaints.