The move was branded a "clear abuse of police powers" by NSW Greens MP David Shoebridge, who backed a bid by several concertgoers to seek an injunction in the NSW Supreme Court.
One of the plaintiffs, Tom Raue, said drug detection dogs get it wrong "most of the time" and it seemed "really unfair" that he could be kicked out when he was doing the right thing.
"Even after they find no drugs they're going to keep you out of the festival - that's just outrageous," Mr Raue said.
Loading
"We need to stop the drug dogs. People have overdosed after seeing drug dogs approach them - they take a weekend's worth of pills at once. This isn't a harm minimisation approach, it's a harm maximisation approach."
The plaintiffs sought orders that police be "restrained from excluding or evicting" them from Above & Beyond on the basis of a drug dog indication, and sought a declaration that excluding revellers was "beyond [the] statutory powers" of police.
But Justice Michael Pembroke poured cold water on the application on Friday morning, telling barrister Sean Brennan his clients did not have a cause of action to complain in advance.
"We don't waste our time with hypothetical issues like that," Justice Pembroke said.
"If I may say so, the prospect your client will be evicted from the concert is hardly justification for bringing this claim in advance."
Justice Pembroke urged the plaintiffs to reconsider the injunction, which was a "waste of everyone's time", and said he could not see any alternative but to dismiss it if it was not withdrawn.
When the parties returned to the court after discussions, it emerged a summons had not been filed in the case, which meant the proceedings had not formally commenced.
Justice Pembroke said the plaintiffs' legal team could move forward on the basis they can make an application "when some rights of your clients have been infringed or there is an immediate threat".
Speaking outside court, state Greens MP Jenny Leong said the powers that police were using to exclude people from the music event remained unclear.
"We will continue to campaign for the need for a reduction in harm when it comes to drugs, and continue to stand up against the fact that we don't want police to use their powers to intimidate young people," Ms Leong said.
"Our absolute hope is that no young people have their rights violated on the weekend."
Any patrons denied entry to the event after a drug dog indication will be given a refund, promoters said.
Georgina Mitchell is a reporter for the Sydney Morning Herald.
Morning & Afternoon Newsletter
Delivered Mon–Fri.