A court hearing was held Tuesday in Nogales, Sonora, for 42-year-old Yanira Maldonado of the Phoenix suburb of Goodyear.
She and her husband said they were returning from the funeral of her aunt last Wednesday when the bus they were on was stopped at a military checkpoint about 90 miles from the U.S-Mexico border.
Maldonado was arrested after soldiers inspected the bus and reported finding the marijuana underneath her seat, according to a spokeswoman for the army in the northern state of Sonora.
Gary Maldonado claims his wife was framed and says authorities originally demanded $5,000 for her release.
The Mexican Embassy in Washington, D.C., said in a statement Tuesday that Yanira Maldonado's "rights to a defense counsel and due process are being observed." The embassy didn't respond to allegations she was framed.
Maldonado is a naturalized U.S. citizen who was born in Mexico, her family said.
She was taken to a state prison in Nogales after being turned over to federal prosecutors, said the army spokeswoman Denisse Coronado. A federal judge will decide whether Maldonado should face trial, Coronado said.
Gary Maldonado's brother-in-law Brandon Klippel said military officers from the checkpoint were expected to testify at another court hearing Wednesday.
"I know there's people out there saying or asking, 'Did she really do it? Are you sure?' And you know, it hurts to see that," Anna Sota, Maldonado's 21-year-old daughter, told Phoenix TV station KPHO. "If you would've known my mom, if you've met her, you would know she had nothing to do with it."
Patrick Ventrell, acting deputy spokesman for the U.S. State Department in Mexico, confirmed Maldonado's arrest but referred all questions to her attorney and Mexican authorities.
Sen. Jeff Flake, R-Ariz., is "personally monitoring the situation, and he has had multiple conversations with the deputy Mexican ambassador," his office said in a statement.