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In Breaking Bad season 3, episode 3, Hank and Gomez are in a low class bar where all the other patrons look criminal. Hank comments that two patrons "are holding", and maybe the bar owner is holding too.

Does he mean they are carrying guns, or drugs, or something else?

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They have narcotics with the intent to distribute. – user6918 Nov 26 '13 at 20:26
up vote 16 down vote accepted

When said in that context "are holding" means "are in possession of narcotics".
Confirmed at Drug Slang Dictionary, toward end of this page.

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Thanks! Somehow Google was not showing me that in its customized search results ;). – A-K Nov 5 '13 at 1:59

Urban Dictionary says that it means "Possessing drugs available for sale".

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Thanks! Somehow Google was not showing me that in its customized search results ;). Can't accept both answers ;( – A-K Nov 5 '13 at 2:00
    
@AlexKuznetsov - no problem! – iandotkelly Nov 5 '13 at 2:52

There is precedence for "holding" as shorthand for anything nefarious, specifically guns, ie "holding heat" but drugs for sale or share is the most common

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