Another approach, to this may be a bit more stealth, but limit your exposure being you don't know how high up the ladder this goes.
You might consider a letter, lay it all out on paper and leave it or mail it to the owner.
If the manager is not the owner you really don't know who is in on this or how long it's been going on.
A letter if properlly worded can keep you from any retaliation if he merly decides to call a meeting and it comes out that you "told", on something that may have been going on for a long time.
I remember when I started in business and my boss left me in charge of a 40 person business, and I knew he had plans for me to eventually run one of his stores. He always said , "remember I am your boss, you work for me, and I am the only one who's opinion matters" If it were not for me, none of these people would even know each other.
So when he left, a couple guys went in the back and smoked some pot. It put me in a bad spot when he came back because I knew how he felt about drugs, and he had made himself very clear about it. He said all these mouths I feed will stop eating because one idiot got busted smoking a joint on my property. So I told him. I asked that he please not mention who it came from. Big mistake, he went like an arrow and grabbed these two guys, who were all friends. It took a year for them to start talking to me again, but what he said was right. You two idiots could put all of us out on the street. "It was a high end town", and even though everyone was smoking pot, "most of the clients also, in the 70's" it wasn't spoken about. And the police in Nassau would have closed us down. So be careful how you approach this as you don't ever know how people are going to react. My old boss and I ended up as partners, Because I always told him the truth about anything he asked me. He was the one paying me, not some kid who was hired to sweep the floor, like I was in the beginning. So maybe a letter is a better way. I would start out by saying I needed to make you aware of a situation that exhists, one which I did not know how to handle, so I decided to put it on paper so that it comes out the way I meant for it to come out, sometimes emotions get in the way when you are trying to explain something like this., Just another approach. This way if it is something that he is aware of, "i doubt", you are out of it. He may pull you on the side and thank you, or say nothing. Or he may fire a few people, it's impossible to know.