Green’s Dictionary of Slang

an illicit bar or ‘speakeasy’.

1927

(con. 1825) H. Asbury Gangs of N.Y. 21: The cheap green-grocery speak-easies which soon sprang up around the Square [...] Piles of decaying vegetables were displayed on racks outside the store, but Rosanna provided a back room in which she sold the fiery liquor of the period at lower prices than it could be obtained in the recognized saloons [Ibid.] 23: The Five Points gradually declined as an amusement center as the green groceries invaded the district.