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Officers were called to the property on Alexandra Road at around 11.58pm on Monday following a report of a break in at the address.
A number of discarded cannabis plants were found outside the premises and an operational support unit was then called upon to gain entry to the building.
Inside, officers discovered a large-scale sophisticated cannabis production set-up on all five floors of the house, with in excess of 1,000 plants at various stages of growth or harvest.
A full audit of the factory will take place today but it is estimated that the plants could have a street value of around £400,000.
Insp Dave Vickers, Morecambe police, said:
"This is a significant seizure of cannabis plants from what appears to be a very organised and sophisticated production system.
"The seizure of these plants, along with equipment being used to grow them, will prevent a large amount of drugs from reaching our streets.
"Drug abuse has a number of knock-on effects which cause problems for out communities - crimes such as burglary, car crime and robbery are often committed to fund a drug habit.
"We are committed to tackling those who produce and sell drugs in our neighbourhoods and our investigations into this particular set-up are ongoing."
NOTE: a Vietnamese male, aged 28, was arrested on suspicion of producing class B drugs and possessing class A drugs (ecstasy); a 20-year-old Vietnamese male was arrested on suspicion of producing class B drugs.
Both are currently in police custody.
Police Force: Lancashire
Address:
Alexandra Road
Sandylands
Morecambe
LANCASHIRE
LA3
The location of the incident marked on this map is approximate