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Level 1 means there is no lock on the holster and the only retention is friction from the holster itself holding the gun in.

Level 2 means there is a lock or snap that must be either pressed or undone before the gun can come out of the holster.

Level 3 means there are two locks. Most police departments use level three. For example it may have a hood that has to be folded over then a button depressed to release the gun from the holster