A man is dead and two people are in hospital after taking an unknown substance at the Lost Paradise music festival, west of Gosford.

Key points: The 22-year-old was one of about 11,000 people attending the Lost Paradise festival

The 22-year-old was one of about 11,000 people attending the Lost Paradise festival Police charged three people with drug supply offences and issued another 50 with court attendance notices for possession

Police charged three people with drug supply offences and issued another 50 with court attendance notices for possession The death follows reforms in NSW that mean anyone who supplies a substance that kills someone can spend up to 25 years in jail

The 22-year-old, from the Brisbane suburb of Toowong, died in Gosford Hospital about 8pm last night after attending the Glenworth Valley event.

Lost Paradise began on Friday and has attracted a crowd of more than 11,000 people.

NSW Police said a man and woman remain in a stable condition in hospital after they took an unknown substance and became sick.

Fifty people have been handed court attendance notices for drug possession, despite police working with organisers for months prior to the event to ensure a strict "drug-free" policy was enforced.

Three people have been charged with drug supply offences, including a 21-year-old Sydney man who was allegedly caught with over 100 MDMA pills and a 23-year-old man who allegedly had 80 MDMA pills and 65 bags of cocaine.

Event 'strictly drug-free', say organisers

In a statement, a Lost Paradise spokeswoman said the incident was "very distressing" and extended sincerest thoughts and condolences to the family of the deceased.

"Lost Paradise is a strictly drug-free event that is about celebrating life, love and nature in a fun, safe and welcoming environment," they said.

"A great deal of planning and effort goes into ensuring the safety and welfare of our festival-goers and event staff."

The organisers said they worked closely with local police to make sure revellers respected the drug-free policy.

NSW Ambulance also provided extensive medical support across the site, they added.

"This year, we have also engaged DanceWize NSW, a NUAA program that is funded by the NSW Ministry of Health to educate people on the implications of drug use, and offer peer support and health resources," the statement said.

Police reveal bizarre smuggling methods

Acting Superintendent Rod Peet described planning for the event as "extensive" and insisted the police resources deployed there were adequate.

Police have been searching cars and belongings as people enter the grounds and used drug dogs to detect illegal substances.

More than 11,000 revellers have attended the festival, west of Gosford. ( Supplied: Lost Paradise festival )

But Acting Supt Peet said the methods people were using to smuggle drugs in were becoming very sophisticated.

"People aren't carrying it in their pockets — they aren't that careless — they are quite calculated in the way they are secreting things," he said.

Some revellers used a Vegemite jar with a secret compartment to hide their stash, while modified aerosol cans have also turned up.

"On one instance, certainly someone was quite determined, someone inserted drugs into the stuffing of a barbecue chicken," Acting Supt Peet said.

"I commend my police on their tenacity to search that thoroughly. That is the extent we're going to to insulate this event from drug use."

Acting Supt Peet said police met with organisers this morning and agreed the festival would continue, but hinted at possible changes in the future.

"It's a tragic event and there will be ramifications, one way or another, for the credibility of the event."

Lost Paradise festival organisers said the event had a strict drug-free policy. ( Supplied: Lost Paradise )

Death follows harsher punishments for suppliers

The incident follows the deaths of two young revellers at the Defqon1 festival in Sydney in September, which triggered a fiery reaction from NSW Premier Gladys Berejiklian who initially threatened to shut the event down.

An expert panel was set up to investigate the problem of drug use at music festivals and the Government in October announced a new offence for dealers who supply substances that kill people.

The maximum punishment for the new offence is 25 years in jail.

However, debate about whether pill testing would be a more effective measure continues to swirl despite the Government's opposition to it as an alternative to the "zero tolerance" drug policy.

Pill testing was not considered by the expert panel and Ms Berejiklian has repeatedly argued it would be akin to giving the "green light" for revellers to take substances.

Pill testing advocates reissued their push for a rethink following the Lost Paradise death, including the Take Control organisation, which was launched by drug and alcohol treatment provider the Ted Noffs Foundation.

Spokesman Matt Noffs said the "just say no" strategy had failed and urged the Premier to listen to evidence about pill testing.

Lost Paradise festival organisers describe the event as "a celebration of life, love and nature". ( Supplied: Lost Paradise )

"Young people can get drugs easily, but don't know what they are taking," Mr Noffs said.

"In responding to tragedy we must sometimes face hard truths."

Long-time pill testing advocate and Greens MP David Shoebridge said politics was failing young people.

"Young people want practical advice, real time accurate information and a government that helps them keep safe, not one who's only plan is to lecture and punish them," he said.

Sorry, this video has expired Michael Daley says NSW Labor will explore pill testing if elected

The NSW Opposition has pledged to hold a drugs summit if it wins next year's state election, involving not only parents of young revellers but ambulance officers, police and clinicians.

Leader Michael Daley said pill testing should not be off the table.

"If you're going to hold a drug summit and you're going to say you'll listen to the experts, you can't shut one door to them," he said.

"We'll look at all options."