Sacred Haven of Debauchery

In Heroes of Might and Magic III, I had a lot of grenades. In fact, my castle was full of weapons. Several assault rifles, several sniper rifles, and a few other things. I also collected different types of armor.
In Heroes of Might and Magic II, I don't remember how it was with grenades, but near San Francisco, there are Hobbits hanging around, and they definitely have grenades. However, it's not easy to kill them at the beginning of the game.