Economic Anxiety Makes City Mellow On Pot Farms

The Oakland city council this month approved a landmark ordinance to license four large medical marijuana cultivation and processing facilities. The controversial plan could provide millions of dollars in tax revenue. But how much of this is legal, and who decides? From member station KQED, Michael Montgomery reports.

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California could become the first state to legalize marijuana use if voters approve an initiative on the fall ballot. But some California cities are already starting to rev up the marijuana industry. This month, the Oakland City Council moved forward on a landmark ordinance to license four giant medical marijuana cultivation centers. The plan could bring millions of dollars in tax revenue to the city's cash-starved government.

But it's not known how much of this is legal, and who decides. From member station KQED, Michael Montgomery has the story.

MICHAEL MONTGOMERY: Jeff Wilcox doesn't look anything like a pot kingpin. He's polite, laughs at himself, and dresses in crisp business casuals. But if he has his way, Wilcox could become owner of one of the world's largest licensed marijuana farms.

MONTGOMERY: The complex is about two-thirds empty.

MONTGOMERY: Walking across a deserted parking lot, Wilcox surveys a cluster of empty offices, then enters a cavernous warehouse the size of a football field.

MONTGOMERY: It is about 43,000 square feet. This warehouse has been vacant for 10 years, looking for a tenant.

MONTGOMERY: The warehouse is part of a sleepy, seven-acre business park that Wilcox bought 12 years ago. It's squeezed between a major freeway and the Oakland harbor. Wilcox wants to devote the facility to pot cultivation, provided he can convince the city to award him one of four medical marijuana growing permits.

MONTGOMERY: We looked at it like a land developer would look at a project. What's the benefits to the city for jobs and revenue? We figured if 100,000 foot, at the maximum, was under cultivation, at today's rate, the revenue would be about $60 million.

MONTGOMERY: You've talked about having the capacity to grow 21,000 pounds of marijuana cannabis a year. That's a lot more than consumed in the entire city locally.

MONTGOMERY: Exactly, and that was always the objective by the City of Oakland.

MONTGOMERY: Meaning that medical marijuana grown here could be sold to dispensaries around the state, with Oakland getting a healthy cut from a sales tax. This year's scale of the plan has raised a lot of eyebrows, even among marijuana advocates like Dale Gieringer. He directs the California chapter of the National Organization for the Reform of Marijuana Laws.

MONTGOMERY: The pot farm that's envisioned here is an unprecedented size, at least for any legal facility in the United States or in North America, probably.

MONTGOMERY: The question is, is this legal? California's vague medical marijuana laws allow collectives or cooperatives to cultivate medical marijuana for members. But Gieringer says the laws don't address commercial growers and wholesalers.

MONTGOMERY: Here, we're introducing a whole new layer of intermediate suppliers who basically sell it to other collectives and dispensaries. It's not strictly kosher under state law, and I'm sure it could be subject to litigation.

MONTGOMERY: Or, perhaps, raids by federal drug agents.

MONTGOMERY: They would be a significant target.

MONTGOMERY: Tommy Lanier directs the National Marijuana Initiative, which is funded by the White House Office of National Drug Control Policy.

MONTGOMERY: If you're going to facilitate transportation, production, distribution on such a large scale, the federal government would be involved in that.

MONTGOMERY: Both the DEA and the Department of Justice declined to say whether they'll take action against Oakland over the pot farms. Oakland City council member Rebecca Kaplan, who co-authored the plan, says she believes the Obama administration will respect local laws.

MONTGOMERY: We're certainly taking them at their word, knowing that we're working to create responsible regulations.

MONTGOMERY: But council member Nancy Nadel says the city should revise the ordinance to a more modest scale.

MONTGOMERY: You don't want a Banana Republic. You don't want your city's - all of your industrial property to all be tied up in this one crop. You want to have a diversity of businesses in your city.

(SOUNDBITE OF VEHICLE)

MONTGOMERY: Back at his Oakland warehouse, Jeff Wilcox says he agrees. That's why he says he's registered his business as a nonprofit, and is offering space to smaller growers and other entrepreneurs. Wilcox says the key is bringing marijuana cultivation out of the shadows and into the realm of the professional business.

MONTGOMERY: There is new the guard coming in - people like me that can get things done legislative-wise and business-wise. So in essence, you could say big business is here, or you could say the end of prohibition, possibly, and the future of a new industry.

MONTGOMERY: With a lot of luck, Wilcox says he could have his first crop of industrial-grown medical marijuana ready for harvesting sometime next year.

For NPR News, I'm Michael Montgomery.

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