Excise officials seized around 120 grams of brown sugar worth over Rs 12 lakh in the Jaleswar area of Baleswar district on Sunday.
Acting on a tipoff about the drug being carried in a car from West Bengal to Bhubaneswar, the excise sleuths intercepted the vehicle on NH-60 near Gayatri Petrol Pump early in the morning.
During search, the brown sugar was found in the car. Police arrested the three occupants of the vehicle in this connection.
The arrested were identified as Shivaprasad Mohanty (37) of Jagatsinghpur, Subash Bhoi (21) of Balianta in Khordha district and Chandan Kumar Bhoi (25).
They had procured the drug from West Bengal with an intention of peddling it in Bhubaneswar and nearby areas, sources said.
Police have also seized cash of Rs 2,820 and three mobile phones from their possession.