Balfour is the ex-husband of Jennifer's sister, Julia. He is charged with the shooting deaths of the sisters' mother and brother, as well as Julia's 7-year-old son.
The Chicago Tribune said witness Reginald Jones told the court Tuesday he frequently bought cocaine from the singer's brother and occasionally helped Jason handle customers who came to the Hudson family home to buy drugs.
Jones also said he caught Balfour spying on Julia, who was living with her mother, brother and son, just months before her three family members were killed.
Prosecutors have argued Balfour was angry at Julia because she asked for a divorce and had a new boyfriend, but Balfour's defense team has said Jason's drug-dealing exposed his loved ones to criminals and violence.