Inside the bag was 14 wraps containing a total of 12.86g of cocaine.
Watts, 30, was also found to be in possession of another quantity of 2.39g of cocaine and MDMA.
Sasha Bailey, mitigating, said things had started to "fall apart" for Watts when contact with his son ended at the same time as a relationship with his former partner.
Miss Bailey added: "He started dealing drugs to pay off the debt and fund his own habit."
However, recorder Jeremy Benson QC told Watts a custodial sentence was "justified".
At Ipswich Crown Court on Wednesday, Watts was jailed for three years - less 49 days spent under curfew while on bail.