Two men from Douglas and a 32-year-old man from Liverpool were held in connection with the discovery, which followed a raid at a property in Douglas on Thursday.
They are suspected of being involved in the "importation and onward supply" of the Class B drug.
The men were remanded in custody and are due to appear in court later.
Det Sgt Paul Holland said: "Seizing this amount of cannabis prior to the TT race period puts a significant dent in the availability of obtaining the drug during a busy time."
Cannabis with a street value of £25,000 has been seized and three people arrested on the Isle of Man.