Wolverhampton Council’s licensing sub committee will meet on Tuesday to discuss the future of Diamond Banqueting Suite in Skinner Street.
It follows a police raid which resulted in the arrest of four men aged 18, 24, 29 and 30 years old.
The men were eventually detained when a police dog pointed officers to the lift they were hiding in after realising the exits to the building were blocked, West Midlands Police said.
The men have since been released under investigation.
The force has now called for a review of the premises licence, held by Paramjit Singh, in support of the prevention of crime and disorder objective.
Should committee members decide to take action, they could completely revoke the licence or suspend it for a period of up to three months.
In evidence submitted ahead of the hearing, Wolverhampton Police’s Aimee Taylor said officers had attended Diamond Banqueting Suite on April 20 following reports of a smell of cannabis coming from the location.
She said Mr Singh had told her he had leased the venue out to someone else for three weeks but failed to provide any details of the tenant.
Miss Taylor said he only allowed them into the kitchen area of the building and refused access anywhere else, before leaving.
Officers returned the next day following reports of further activity and forced entry when the men and cannabis factory were discovered.
She said: “As entry was being forced three males were seen by officers attempting to escape from inside of the premise through the side door of the property.
“The males then ran back into the premise which was then made secure by officers and a search was conducted.
“Due to the premises being extremely large, a police dog was requested in order to locate the males.
“The police dog paid particular attention to a lift that was used to gain access from the kitchen area to the main building. Four males were subsequently located and arrested at the scene.
“Upon entry to the upper floors of the premise a very large industrial scale cannabis factory had been set up.
“There were hundreds of cannabis plants in growth as well as hundreds of small plants ready to be grown.
“There was also a significant amount of bags of soil and further equipment ready to grow further plants. There was also rooms prepared ready to facilitate further grows.
“It is estimated that the value of the entire contents found at the premise is worth one to three million pounds in revenue.
“The rooms were set up with lighting, heating and ventilation. Due to the amount of electrical appliances that had been put in place to supply the growing areas, it is believed the main electrical supply has been bypassed.”