1) No, no where in the section defining what constitutes the offence of trafficking does it state the accused must be in direct possession of the illegal substance.
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2) Aiding and Abetting – The guilt of a person in a criminal case may be proved without evidence that he personally did every act involved in the commission of the crime charged. The law recognizes that, ordinarily, anything a person can do for himself may also be accomplished through direction of another person as an agent, or by acting together with, or under the direction of, another person or persons in a joint effort. (cited from textbook and online reference)
So, if the acts or conduct of an agent, employee or other associate of the person are willfully directed or authorized by the person, or if the person aids and abets another person by willfully joining together with that person in the commission of a crime, then the law holds the person responsible for the conduct of that other person just as though the person had engaged in such conduct himself. Notice, however, that before any person can be held criminally responsible for the conduct of others it is necessary that the person willfully associate himself in some way with the crime, and willfully participate in it. Mere presence at the scene of a crime and even knowledge that a crime is being committed are not sufficient to establish that a person either directed or aided and abetted the crime. (cited from textbook and online reference)
3) Greyeyes should be guilty of aiding and abetting in trafficking of cocaine. This is because Greyeyes was not actually in possession of any of the cocaine but acted as a mediator in which to help sell the cocaine to the undercover police officer. He took the undercover police to the location, expressed the intent to purchase the illegal substance and then accepted payment for helping the undercover police officer find and buy cocaine.
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4) No police officers should be allowed to pose as drug dealers to catch drug users. The act of possessing and trafficking illegal, addictive, and dangerous substances is already extremely immoral and police officers are just using more effective means to catch these criminals. If drug users cannot be certain of whether or not the people they are dealing with are police officers or not will become a useful deterrent in the widespread and often anonymous sale of drugs.