Panchanan Das, 45, was arrested after the contraband, worth at least Rs.1.5 crore, was found in his house, district Superintendent of Police Anup Sahu told IANS.
Raids are being conducted by the police in different places in the town, on the basis of the confession Das made, that others too were involved in the drugs' racket.
The district headquarters town of Puri, about 56 km from state capital Bhubaneswar, is a famous beach location on the Bay of Bengal coast; the 11th century Jagannath Puri temple also attracts many pilgrims each year.
Millions of people, including a large number of foreign tourists, visit the town each year. Drug peddlers consider many such visitors potential buyers.