A 17-year-old male from the Norwich area was arrested after he escaped a property at The Maltings through a back window during the raid, just before 9am.
He was chased through Fleece Meadow to the car park of Morrisons supermarket where he was arrested.
It is believed he dumped the drugs, believed to be heroin, during the chase.
The 17-year-old has been taken to Wymondham police station to be questioned.
A man in his 20s has also been arrested for being concerned in the supply of class A drugs and is being questioned by police.
Police with a sniffer dog have been searching the area and the property.
At present just a small amount of cannabis has been found but searches are continuing.
The raid was carried out as part of Operation Gravity, which is targeting violent drug gangs across the county.
Sergeant Matt Abbs, from Dereham police, said: 'After high profile arrests in Norwich, King's Lynn, Great Yarmouth and London gangs are targeting market towns including Dereham, Thetford, Watton and Diss.
'It is an ongoing issue with drugs in Dereham, like it is any other town of comparable size.
'When we get one gang another one will come in, looking for gaps in the market. 'We are carrying out raids every week and some days doing three or four to send out a message and to protect the victims, including the 17-year-old who we arrested this morning.
'It is young lads like this who are being used by the bigger gangs to sell their drugs.
'They may owe a debt and be subjected to threats of violence, which is why they do it.
'They are victims as well.'
PC Joe Jermy, beat manager at Dereham police station, said he hoped such raids would send out a message to drug gangs.
He said: 'Dereham is not a soft touch.
'As soon as we hear about drugs activity in the town we will act on it.'
Anyone aware of illegal drug activity in their community should contact Norfolk police on 101 or Crimestoppers, anonymously on 0800 555111.
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