John Lewis Thorn was found shot dead in dense Lake Leake bushland in August 2006.

Kalangadoo man Stephen Roy Standage has pleaded not guilty to his murder, and not guilty to killing Ronald Frederick Jarvis in July 1992.

Former Lake Leake resident Simon Peters told the Supreme Court in Hobart yesterday he used to sell cannabis grown by Mr Thorn.

The court heard he would buy the drugs from Mr Thorn for $200 an ounce and onsell it to friends living on the West Coast.

Mr Peters gave details of two drug transactions between himself and Mr Thorn - one for two ounces, and the other for four ounces.

Under cross-examination, Mr Peters acknowledged he had earlier told police the two exchanged drugs for money regularly.

The court heard Mr Peters suggested going into business growing cannabis with Mr Thorn.

``I offered to go halves with him but he said he already had a partner,'' Mr Peters told the jury.

``He told me to stay away from Steve (Standage) . . . that he was crazy . . . I was led to believe they were partners,'' he said.

Coles Bay resident Colin Mason told the court he had helped Mr Standage grow marijuana.

Mr Mason said the accused owned a drug compound near Lake Leake that housed between 12 and 15 cannabis trees about two metres tall.

The court heard the two travelled there together at least 12 times between 2004 and 2006 to water the illegal crops.

Later, former Campbell Town Hotel bartender Michelle King said Mr Standage came into the pub the evening the victim's body was discovered.

Mrs King said the accused was a regular patron at the hotel, and on his visit that day he ate, drank and gambled as he usually would.

The witness gave evidence Mr Thorn's death came up in conversation across the bar.

``(Standage) said that he'd been found and that he thought he'd been bashed and strangled,'' Mrs King told the court.

``He said he thought he'd been killed because he carried quite a bit of money on him.''

The trial continues.