Yes, of course they can. I believe I already answered a similar question, but anywho, yes. They were specifically trained and specifically chosen for just such tasks. Just to elaborate, humans have 5 million olfactory receptors. read more
Certainly, dogs can Smell drugs outside the body or even if it was in close proximity to a person (A recent handler of drugs). Dogs also show bias in deference to their handlers. They sense what their handlers want and they occasionally raise false positives. read more