The police know who the gang members are. The whole neighborhood knows who the big drug dealers are, and the police know it too (and gangs and drugs are completely intertwined). It's all a matter of playing the game right to get articulable probable cause that the dope is in one particular location at one specific time.
Suspend the Constitution and my conscience though, and that guy is out of business before my first donut break tomorrow. Of course, then your police department really is the Gestapo. That would be worse than keeping the Constitution and having to live with the gangs. It really would be.
Knowing a guy is a big time dealer because everyone talks about it is not good enough to arrest him or search him under the Constitutional rules of the game. You need actual evidence, and he doesn't have to be that smart to keep you from getting that evidence.