A man who has admitted dealing synthetic cannabis in Rotorua's central city has been banned from the CBD and warned by a judge he could go to jail.

William Rua, 62, was found by police with $1350 cash and "deal bags" of non-approved psychoactive substance, which police said was synthetic cannabis.

Rua appeared in the Rotorua District Court today and pleaded guilty to two charges - possession for sale/supply of non-approved psychoactive product and possessing the drug.

A police summary of facts released to the Rotorua Daily Post said Rua was at St Luke's Church on Amohia St where he was seen selling synthetic cannabis on Tuesday August 8 at 12.30pm.

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He was sitting on a park bench with a woman who expressed an interest in buying a bag of synthetic cannabis, the summary said.

Rua produced a snap lock bag from his pocket and handed it to the woman and took $18 from her.

He concealed the money in his fingerless glove.

Police later searched Rua's home and found another bag of synthetic cannabis, the summary said.

In explanation, he told police he had only sold synthetic cannabis once during the day.

Police are seeking to forfeit the $1350 in cash which Rua was found with.

Rua's lawyer, Dafydd Malcolm, said in court today his client was a user of synthetic drugs and had "drifted or dabbled" into this offending.

Mr Malcolm asked Judge Hollister-Jones to impose community work and a period of supervision given Rua had not offended for 28 years.

However, Judge Greg Hollister Jones noted the recent prevalence and concern around synthetic cannabis.

"Given this was dealing from a park bench in the CBD, I am going to ask for a pre-sentence report. It is clearly at the upper end and the court will want to look at all options."

Judge Hollister Jones also set bail conditions that banned him from being in the CBD while on bail.

"He is not going back there pending sentence ... This is going to be monitored tightly."

Rua's bail conditions include that he provide written proof if he goes to the CBD to see his lawyer and doctor.

He will reappear for sentencing on November 28 and has been told by Judge Hollister-Jones there are "no promises".