A council in northern New South Wales wants to take advantage of the fledgling medicinal cannabis industry by encouraging the construction of a processing plant.

Medicinal cannabis campaigner Lucy Haslam is already looking to set up a farm to grow cannabis in the Tamworth region, after legislation to legalise the cultivation of cannabis for medicinal purposes passed the Federal Parliament last month.

Mrs Haslam's son Dan sought relief from cancer treatment through medicinal cannabis use.

"The fight for medicinal cannabis really started here with the Haslams," Tamworth acting mayor Russell Webb said.

The council will vote on a Mayoral Minute on Tuesday night proposing to write a letter to Premier Mike Baird indicating strong support for the cultivation, processing and manufacturing of medicinal cannabis.

Cr Webb said it was an emerging industry and Tamworth needed to be ready to act to set up a processing facility when the opportunity arose.

"There's nothing better than having that processing plant established here in our own region, close to where the products are being cultivated and grown," he said.

"It will create jobs for the region and it will create an opportunity for the region to expand the cultivation of those products, and farmers in our region could benefit greatly into the future."

Cr Webb said Tamworth needed to be able to act as soon as a product was available for commercial processing.

"If Tamworth's up and going and ready to forge ahead, then of course we could capture a lot of that market," he said.

"A lot of the herbs and other things that are being grown in China could also be grown around here, if we can develop a hub that can actually grow and process some of those herbs as well as medicinal cannabis."

Cr Webb said the financial benefits would be in the tens of millions of dollars, and the processing could include turning the raw product into tincture drops, topical ointments, creams, capsules and sprays.

Tamworth ideally suited, campaigner says

Speaking to ABC New England's Kelly Fuller, Mrs Haslam welcomed the move.

"I'm really happy that Tamworth council are keen to support it and I see this as payback for Tamworth," she said.

"Our campaign could not have gone as far as it did without the support of the local area, and if somebody's going to be doing this in Australia, we want to own this.

"Why not do this in Tamworth? It's going to be done somewhere in Australia and Tamworth's ideally suited to the cultivation of cannabis. It's a natural progression."

She said there were security benefits as well.

"The closer to the cultivation the better, from a security point of view, but it would be somewhere that's going to comply with all the standards that surround this. It will be producing high standard medicine."

Mrs Haslam is hoping for a licence to grow medicinal cannabis by the end of the year.