Pubdate: Tue, 20 Jul 2010
Source: Los Angeles Times (CA)
Page: Front Page, continued on page A10
Copyright: 2010 Los Angeles Times
Contact: http://mapinc.org/url/bc7El3Yo
Website: http://www.latimes.com/
Details: http://www.mapinc.org/media/248
Author: John Hoeffel, Reporting from Oakland
Note: The front page of the print edition has a large graphic of what 
a marijuana factor farm would look like.
Referenced: The draft ordinance 
http://clerkwebsvr1.oaklandnet.com/attachments/25511.pdf
Bookmark: http://www.mapinc.org/find?115 (Cannabis - California)

OAKLAND SEES POT AS EVEN MORE OF A GROWTH INDUSTRY

The City Could OK a Plan to Set Up Four Marijuana Factories

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.

And Berkeley, like neighboring Oakland, decided earlier this month to 
ask voters in November to approve six marijuana production operations 
of up to 30,000 square feet each.

Under Oakland's proposal, the four operations would pay an annual fee 
of $211,000, which would support a city staff to ensure they are 
operated safely and securely. But opponents see it as a steep barrier 
to entry and have proposed a sliding scale based on size.

"The ordinance basically sets up an oligopoly," said Gieringer, the 
longtime head of California NORML, which advocates for legalization. 
"I don't think we want just four humongous growers, not just 
Wal-Marts. We'd like to see lots of microbreweries, rather than Budweisers."

Steve DeAngelo runs Harborside on the Oakland waterfront, the largest 
legal marijuana retailer in the world. From his bright, airy 
dispensary, he and his 80 employees serve more than 600 patients a 
day, selling about 8 pounds of marijuana in about 100 varieties. He 
has nurtured a network of more than 400 patient-farmers, as he calls 
them. Fearing for their livelihoods, he has stirred up much of the 
opposition. "Any new system that is created needs to have a role for 
these pioneers," he said. "It's not the role of government to decide 
the winners and losers in the marketplace."

Standing next to about 60 thriving, 5-foot-tall plants sprouting from 
30-gallon buckets, David Fry, a longtime Oakland grower, said he has 
little sympathy for these growers. "Why do it? It's not legal," he 
said. His operation, he said, is a by-the-book collective with 
members who share the work and the costs.

Scores of applicants are expected for the four permits, which would 
not be issued until January, but two businessmen who have been public 
about their dreams have galvanized opponents, who resent their wealth 
and recent arrival on the scene.

Wilcox declined to discuss his proposal until after Tuesday, when the 
council could vote. But when he spoke last week at the committee 
hearing, he appeared sensitive to the criticism. "I do not want and 
never want to monopolize this industry," he said. "I think we should 
open up some of these facilities for safe sanctuaries for the small- 
and medium-sized growers."

Dhar Mann made a lot of money brokering mortgages and escaped before 
the implosion. In January, he opened iGrow, a 15,000-foot hydroponics 
superstore , pitching it as the first to cater openly to medical 
marijuana growers. He also founded the University of Cannabis to 
teach cultivation classes. And he continues to envision new ventures 
at a rapid clip. "I really saw the pot industry as one with future 
growth," he said.

Mann said he has assembled a team to design an energy-efficient 
proposal for a large cultivation facility that would stack pallets of 
pot plants as high as five levels.. "This is the natural next step," 
he said. "If it is not Oakland, it's going to be some other city 
that's going to do it." 
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MAP posted-by: Richard Lake