Michimaru Obara, 48-year-old monk at Eikoji shrine in Iwate prefecture (state), is suspected of cultivating about 5.3 pounds of marijuana, according to a police official who refused to give his name due to policy.
Authorities also suspect the monk sold at least 1.7 ounces of the illegal plant to an office worker near Tokyo, the official said.
Obara has already been arrested for drug possession, after police found marijuana at his home last month. The monk has admitted he cultivated the plant for personal consumption, but denies selling his harvest, reports said.
Drug penalties in Japan are harsh. Convicted drug users face up to life in prison under anti-narcotics laws, although most first-time offenders get suspended prison terms.