The legal drugs trade is pulling in high profits.

The outlet is one of an estimated 30 “head shops” operating in Ireland — and causing concern to health bodies and anti-drug campaigners.

The stores, which are closely monitored by government and law-enforcement agencies, stock drugs paraphernalia; “party pills” that create similar feelings of euphoria to illegal drugs such as amphetamines and ecstasy; incense that can be smoked; and “snow”, a caffeine-based powder stimulant.

They also sold magic mushrooms until a ban was imposed in 2006 by Mary Harney, the health minister, who accused the stores of selling “damaging” substances in an uncontrolled fashion. Earlier this year, the chemical benzylpiperazine, or BZP, which was in several “party pills” on the market in Ireland, was made illegal.

Shane O’Connor, the owner of the Temple Bar shop and a director of IHS, declined to comment on the company’s profits, but said they did not relate solely to the Temple Bar outlet. He called IHS an umbrella company and said its profits related to “a number of different enterprises”.

Jim Bellamy, owner of the Nirvana head shops on Dublin’s South William Street and Capel Street, and an outlet in Bray, said business was booming. “There is obviously a market out there,” he said.

Bellamy declined to comment on his profits but said that his last Vat return, covering two months of business, was €83,000. “My shops are generating big returns for the exchequer,” he said.

The Killiney-based businessman’s Dublin stores open until 4am at weekends to cater for demand. Bellamy said there were 15 head shops with the Nirvana logo in Ireland. He said 12 were run as franchises, but that he provided some with stock.

The latest accounts for his company, Nirvana Headshops, do not make it clear what profits are made by his outlets, as small firms may avoid publishing a detailed balance sheet.

John Curran, the drugs minister, is considering laws to control the sector, which he called “an area of concern”. The government is also thought to be considering making public-liability insurance mandatory for the shops, which could push some out of business.

Bellamy, who also owns two shops in the UK, said: “We would be happy for the industry to be regulated but any heavy-handed attempt to ban shops will be counter-productive. It could lead to more people taking illegal drugs.”

Several hospitals have reported a rise in the number of people having side-effects from legal highs, such as paranoia, palpitations and vomiting. Earlier this month, six people were reportedly admitted to Cork University Hospital suffering ill effects from herbal highs.