A 74-year-old grandmother has pleaded not guilty to selling drugs in central Sydney.

Noelene Edwards was arrested at Sydney's Central Railway Station in June during a police operation using a drug detection dog.

Police allegedly found 41 resealable bags containing cannabis in her handbag, and more of the drug when they searched her home at nearby Surry Hills.

Edwards was not present in Sydney's Downing Centre Local Court today, but her lawyer entered a not guilty plea on her behalf.

Bail has been continued for Edwards until her case is heard again next month.

Edwards, who has seven grandchildren and six great grandchildren, is charged with possessing and supplying prohibited drugs.

Last month her bail conditions were relaxed so the grandmother did not have to report weekly to police.

Edwards' lawyer, John Gooley, told the court then his client had no criminal record, had lived at the same address for 20 years and has never held a passport.