Why is the poppy known as the flower for Veterans Day?

The use of the poppy as a symbol on Veterans Day is derived from its symbolism in the poem “In Flanders Fields” by John McCrae. These poppies bloomed across some of the worst battlefields of Flanders in World War I, their brilliant red colour an appropriate symbol for the blood spilt in the war.
The reason for the Poppy is that it is a plant which thrives on disturbed ground. The seeds, which are produced by the millions in the seed heads, lie dormant until the soil is broken up. The shelling in the trenches was perfect for the poppy, which grew in their millions when nothing else did. The poems came later, the poppies came from the activity and the blasting of the ground.
The enduring tradition began in WWI when John McCrae wrote this famous poem:

In Flanders Fields
“In Flanders Fields the poppies blow
Between the crosses, row on row
That mark our place; and in the sky
The larks, still bravely singing, fly
Scarce heard amid the guns below.
We are the Dead. Short days ago
We lived, felt dawn, saw sunset glow,
Loved and were loved, and now we lie,
In Flanders Fields.
Take up our quarrel with the foe
To you from failing hands we throw
The torch; be yours to hold it high.
If ye break faith with us who die
We shall not sleep, though poppies grow
In Flanders Fields.”
John McCrae 1915

Moina Michael, an American woman adopted the custom of wearing a red poppy in memory of the sacrifices of war and also as a symbol of keeping the faith.

A French woman, Madam Guerin, visiting the United States, learned of the custom and took it one step further. When she returned to France she decided to hand make the red poppies and sell them to raise money for the benefit of the orphaned and destitute women and children in war torn areas of France. This tradition spread to Canada, the United States and Australia and is still followed today.

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