Commentary for Kiddushin 134:5

The Torah prohibits Canaanites from residing in the land of Israel (there are no Canaanites anymore). According to this baraita, the child of a non-Canaanite man and a Canaanite woman is considered a non-Canaanite. The verse proves that there are people in your land you can buy—i.e. not everyone in your land is considered a Canaanite.

The second half of the verse proves that you can buy slaves from those just born in your land, meaning not from your land. This would refer to the child of a slave (one who belongs to a Jew) who has a child with a non-Jewish (and non-Canaanite) woman. Such a child is considered a slave. But you cannot buy slaves from those who dwell in your land, i.e. those whose fathers are Canaanite.