Wolves youth striker Chris Cornes has been given a six-month suspension after testing positive for cocaine.
He was randomly tested by the Football Association at the club's training ground in February.
The 19-year-old has yet to make a first-team appearance for the club and his future is now under review.
Cornes denies taking the drug and has taken his case to two FA hearings but Wolves chief executive Jez Moxey said: 'We were extremely disappointed to learn that one of our players had tested positive for a banned substance.
'Players know the rules and it is constantly impressed upon them that they must act responsibly.'
The player's ban has been backdated to April 13 - the date when Wolves had imposed an internal suspension on the player.
Academy graduate Cornes is contracted to the club until June 2008 but, according to a statement on the Wolves website, 'his continued employment with the club will be discussed at a scheduled board meeting... and with football management and the Professional Footballers' Association'.
Moxey added: 'Taking prohibited substances is totally unacceptable and the 'strict liability' rules put an even greater onus on them to avoid situations that put them at risk.'