To the casual observer, Robert Holding seemed a kindly milkman who was attentive to his elderly customers as he delivered their daily pints.

To the less casual observer – specifically, a surveillance team from Lancashire police – Holding, 72, turned out to be a drug dealer who was supplying cannabis from his milk float to an elderly clientele.

His customers, who smoked the resin to relieve their aches and pains, would leave notes with their empty milk bottles to say how much of the drug they required. His reputation as a drug dealer spread rapidly among 17 of his customers in Burnley, Lancashire.

When detectives searched Holding's home last July they were astonished to find wraps of cannabis resin stashed among the eggs in his milk crates.

Today at Burnley crown court, Holding was given a 36-week jail sentence suspended for a year after he admitted possessing and supplying the drug.

The prosecution said Holding would get through a 9oz (255g) bar of cannabis resin every three weeks in sales to his customers and would not make "a great deal of profit".

Sarah Statham, prosecuting, said: "He said customers would leave notes saying, 'Can I have an ounce, or an eighth?' He only sold to existing customers who were old and had aches and pains."

The court heard Holding immediately confessed to supplying drugs but did not believe he was doing anything wrong.

Judge Beverley Lunt said: "You purport to justify this by saying you are helping out elderly people with ailments."

She said Holding was wrong in his belief that cannabis was not harmful and he was not a philanthropist, but a drug dealer. Had he been a philanthropist, she said, he would have "given it away".

However, she had taken into consideration that his wife is suffering from Alzheimer's and in a care home, and might not recognise him if he was jailed.

Philip Holden, in mitigation, told the court: "From the outset there is a particularly peculiar set of circumstances, and it is a bizarre case." He said his client was acting in the misguided belief that he was providing a public service. He suffered from depression and had been "extremely frank" to police.

Holding told the Guardian. "I don't think what I was doing was that wrong. A couple of them have got MS and others have got arthritis. I was just giving them something to help. I have had letters of support from all over the country, including one from Scotland. I have had a lot of trouble with the papers and all the lies that have been published."

Holding said his oldest customer had been 92 but was "no longer with us". Although he is teetotal and does not smoke, he began dealing in cannabis after being horrified to hear how much one of his elderly customers was paying for the drug.

"She had arthritis and her husband had MS and was in a wheelchair," he said. "They wanted it for the pain relief but it was costing them a fortune. I would sell them an eighth of an ounce for £4.10." The street value is £9.

"I had an old woman who I used to give a bit of cannabis to and she would put it under her tongue for the pain." He said he had never been tempted to try it.

Cannabis has been shown in studies to help ease pain from arthritis and other conditions but it was upgraded to class B last month after concerns by the government about mental health risks.

Acting on tip-offs from concerned residents, Lancashire police launched a discreet surveillance operation, tailing Holding as he completed his round in his milk float. A subsequent search of his home yielded 167g of cannabis.

Local police beat manager John Fisher said: "This was a good example of community policing after we received information from local residents that he was up to no good.

"The cannabis was wrapped and ready to go for the next day's delivery. Whatever he delivered was left on the doorstep with the milk."

He added: "However, there is a very serious side to this because at the end of the day he has broken the law supplying an illegal substance. It is certainly unusual in somebody so old.

"He probably thinks he is doing a community service but he is blatantly breaking the law and has to be dealt with. I would call him an eccentric."

A neighbour of Holding's said many residents were supportive of him. "To be fair, he did know what he was doing was wrong but the people he supplied to all had medical problems, so it is said. Although he acts it, at the end of the day he is not a stupid bloke and he must have realised what he was doing was wrong."

The MS Society said it did not condone illegal drug use, although there are clinical trials under way about the benefits of cannabis.