Reporting from Oakland — Oakland could approve a plan Tuesday to set up four marijuana factory farms, a step that could usher in the era of Big Pot.
The proposal is a testament to just how fast the marijuana counterculture is transforming into a corporate culture. And it has ignited a contentious debate in Oakland that could spread as cities face pressure to regulate marijuana cultivation and find ways to tax it.
"Everybody knows it's going bigger and big money is moving in," said Dale Gieringer, an Oakland resident and prominent marijuana activist. As the state edges toward legalization, he said, more businessmen will seek to capitalize on a fast-growing market in a recession-hindered economy, forcing cities to make difficult choices on how to exert control.
If the City Council approves the plan, one Bay Area businessman has already made it clear that he intends to apply for a cultivation permit. Jeff Wilcox, who owned a successful construction firm and has already incorporated as AgraMed, hopes to convert his empty industrial buildings near Interstate 880 into an enormous production facility. He plans to manufacture growing equipment, bake marijuana edibles in a 10,000-square-foot kitchen and use two football fields of space to grow about 58 pounds of marijuana every day, many times the amount now sold in Oakland.
What caught the City Council's attention was Wilcox's projection that he could hire 371 employees and pay at least $1.5 million a year in taxes. Oakland faces severe budget deficits and has already let go of 80 police officers.
Last week, a council committee sent to the full council the proposal to allow four large cultivation operations, worried that a delay might allow other cities to get the jump on Oakland. "I do want to encourage a few large growers because I think that's where the industry's going, and I don't think you're going to be able to hold that back," Councilwoman Jean Quan said.
But it has ignited intense opposition from medical marijuana activists, dispensary operators and growers in Oakland, who complain that the plan fails to include the growers who have risked federal prosecution for years to supply the city's four dispensaries. Normally secretive, they have started to speak out.
"It's not providing a pathway for folks to become more legitimate," said Dan Grace, an owner of Dark Heart Nursery, which raises about 10,000 pot clones a month in a 3,000-square-foot space. Grace said that his operation could triple its size — if Oakland allowed it.
Oakland takes pride in setting new marijuana precedents. It was the first city to regulate dispensaries, make marijuana crimes the lowest police priority and enact a special tax on marijuana. And Richard Lee, who operates one of its dispensaries, put the marijuana legalization initiative on the November ballot.
Even if Oakland approves the plan, it faces a serious obstacle: the feds. The Obama administration's policy is to leave medical marijuana operations alone if they are in "clear and unambiguous compliance with state law." In a memo, one council member wrote "this proposal is not legal under state law according to our city attorney." City Atty. John Russo's office declined to release his memo, citing attorney-client privilege.
Drug Enforcement Administration agents remain on the hunt for major growers. This month, agents raided a collective in Mendocino that was complying with the county's new cultivation ordinance, ripping out all 99 of its plants. The San Francisco DEA office referred questions on the Oakland proposal to the drug czar's office, which called it "the latest example of ongoing efforts to legitimize, through local ordinances, activities that remain illegal under federal law."
Said James Anthony, an Oakland lawyer who thinks the proposal should accommodate smaller growers: "There are no giant cannabis factories anywhere in the world, and it strikes me as a rather odd assumption that the first one is going to come into existence in the United States of America. I don't know. Maybe."
Oakland's proposal, drafted by council members Rebecca Kaplan and Larry Reid, would still allow small unregulated cultivation in homes but is intended to supplant hundreds of larger operations, establishing the four industrial operations "as the only legal model."
They argue that medium-size operations, often in gutted homes and illicit warehouses, are a hazard, causing electrical fires and drawing violent crime.
Many cities and counties are grappling with this issue.
Some, such as Redding and Tehama County, have placed strict limits on marijuana growing. . Long Beach has required its dispensaries to grow all of their marijuana on site. In Los Angeles, the City Council did not explicitly require collectives to grow on site, but the city attorney's office says that state law requires it.