He can be found in the Guildhall during Act 3, where he sells various alcoholic beverages and drugs. While some drugs can be found in areas around Baldur's Gate or looted off the corpses, Severn is the only trader that regularly sells and restocks them.
Speaking with Cheeky Nora reveals that they had a brief affair but Severn politely broke it off, insinuating that she was only interested due to her fetish for "monsters."
Unlisted Quest
Speaking with Nora will lead to her requesting the party to ask Severn why he broke it off with her. He will state that he broke it off because he isn't interested in her sexual proclivities. Returning to Nora will result multiple skill check options to convince her that he is no longer interested. If succeeding one of the checks, she will accept his disinterest and say she has a reward for the party.