API Labs Inc. wants to refine the plants into medicinal opiates such as morphine, codeine and oxycodone.
The company was licensed by Health Canada in 2011 to conduct research, but RCMP have expressed concerns that the plan could attract criminals.
Glen Metzler, API's managing director, says it wants to locate the processing plant in Lethbridge, with local farmers growing the poppies on a contract basis.
He says the processing plant could create up to 300 jobs and would include a security plan to keep out organized crime.
Lethbridge city council has agreed to send a letter of support for the project to the federal government. (CJOC, The Canadian Press)