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Officers raided the Flaka club, which shut its doors six months ago, and were reportedly shocked at finding its central dance floor being used as a hydroponic growing facility with up to 2,000 plants.
The policemen were "shocked by the sheer amount of plants in different stages of growth," a statement said.
Four people were arrested on suspicion of drug sale and attempting to grow the illegal plant, including the son of a famous Israeli crime boss whose name is barred from publication. The club's operators denied wrongdoing. A judge will rule Sunday if to extend their arrest or not.
The Flaka club was one of Tel Aviv's most famous dance venues for Mediterranean music.