Donovan Ruiz was arrested on Thursday after a two-week drugs investigation.
Police claim Ruiz, 23, “was involved in the sales of suspected fentanyl to residents of Ventura and Los Angeles Counties”.
“Ruiz is suspected of being the source of supply of fentanyl to many users in Ventura County,” they said.
“Fentanyl sold by Ruiz was eventually consumed by a victim in the city of Thousand Oaks who later overdosed and died.”
Fentanyl is the drug that was found in Prince’s body when he died.
Sergeant Eric Buschow told People magazine that the arrest was “related to a narcotics overdose that occurred within the last two weeks”.
Ruiz’s bail was set at $500,000 (£383,000) and he will appear in court on Monday.
US media reports that the suspect is the son of one of Cher’s assistants and lives at her Malibu mansion.
They published photos showing emergency vehicles outside the property.
Police told People magazine that Cher had nothing to do with the incident. She was also not at home at the time of the arrest because she is on an international tour.