Pubdate: Tue, 20 Jul 2010
Source: San Francisco Chronicle (CA)
Page: A - 1, Front Page
Copyright: 2010 Hearst Communications Inc.
Author: Matthai Kuruvila, Chronicle Staff Writer
Referenced: The draft ordinance
Cited: Proposition 19
Bookmark: (Cannabis - California)


Oakland is on the verge of giving the city's blessing to large-scale 
marijuana farms, a plan that has provoked a backlash from small-time 
growers who fear being pushed out of the booming pot business.

The proposal before the City Council tonight would authorize 
officials to issue permits to four indoor marijuana farms. There 
would be no size limit, and some suitors who have expressed interest 
in winning licenses are proposing growing operations as large as 
100,000 square feet - roughly the size of two football fields.

Although the farms could initially sell only to medical cannabis 
dispensaries, council members supporting the measure believe the 
measure would position the city to reap dividends if state voters 
pass a November initiative to legalize recreational use of marijuana.

But unlike critics of the state measure, Proposition 19, the main 
opponents of the city aren't of the law-and-order variety. Instead, 
they're at the grassroots of this still nascent economy: bud pickers 
for dispensaries, small-time growers and connoisseurs of cannabis. 
Little guy in trouble

They see the megafarms squeezing out the little guy on economies of 
scale, industrializing the crop the way big business has done to food 
and creating monocultures in a pot industry that now grows hundreds 
of varieties.

"What they're doing is eviscerating a whole cottage industry here in 
Oakland," said Robert Raich, an attorney who works in the cannabis industry.

But proponents say larger farms and lower prices embody the future of 
legal pot. It's criminal activity that keeps prices artificially 
high, said Richard Lee, president of Oaksterdam University, which 
teaches people how to operate in the cannabis economy.

"A lot of these growers want to keep things as they are now," said 
Lee, who wants the city to create permits for medium-size and small 
farmers, too. "These people are more scared of legalization than they 
are the cops." Planning for growth

Council members and other proponents of the measure see growth as 
inevitable. And they see Oakland, long at the forefront of the 
state's legalized marijuana movement, as the logical place.

"This is an industry that's going to grow," said Councilwoman Jean 
Quan. "I'd like to see it grow here."

Truth is, it already does. But it's done mostly in the shadows.

Thanks in part to the city's early licensing of medical marijuana 
dispensaries, cannabis cultivation abounds in Oakland, in homes, 
warehouses and seemingly abandoned buildings. Wholesale marijuana 
sales totaled an estimated $28 million last year, according to a city 
staff report.

By creating a legal way to grow pot, the city believes it could reap 
money from business license taxes and the $211,000 that farm 
operators would pay for an annual permit. Safer city

City leaders say the growing regulations would also make the city safer.

Shoddy wiring at illegal marijuana farms is known to have caused at 
least seven electrical fires in 2008 and 2009, the city says. 
Officials also suspect that pot-growing operations are partly to 
blame for a doubling in the number of residential fires in the city, 
from 133 in 2006 to 276 last year.

Illicit cannabis growing also attracts crime. In the last two years, 
there have been two homicides, eight robberies and seven burglaries 
in Oakland that were clearly linked to marijuana cultivation, 
according to a city report.

City-licensed growers would be required to have a security plan, 
guards, restricted access and camera surveillance. They would have to 
conduct employee background checks and undergo building code inspections.

Stricter regulations might push some pot farms out of the basements 
and homes where they now operate. For safety reasons alone, Quan 
said, that would be a good thing.

"I want these grow facilities out of the neighborhoods," she said. 
Helping small growers

Council members Rebecca Kaplan and Larry Reid, the sponsors of the 
licensing legislation, believe that creating a legal 
marijuana-growing system will undercut the illegal one. But they 
concede that the expense of qualifying for a city permit might be 
prohibitive for most smaller operators.

Small growers, said Ada Chan, an aide to Kaplan, "would not be able 
to compete well."

One of the interested large-scale growers is Dhar Mann, the owner of 
iGrow, a marijuana farming superstore near the Oakland airport.

Mann hopes to operate a 57,000-square-foot farm in East Oakland, but 
says he'd start out with a modest 10,000 square feet until he sees 
what the market will bear.

He said smaller growers could easily band together to try to win a permit.

"There's no reason that anyone else can't do it," he said.

Kaplan, who like Quan is running for mayor in November, says she'll 
come back to the council with regulations that would qualify small 
and medium-sized growers for city permits.

Some advocates of legalized marijuana, however, worry that Oakland is 
putting itself and the movement in harm's way.

Although the federal government has recently taken a hands-off 
approach to the state's small pot farmers, Oakland could be inviting 
a crackdown by sanctioning large operations, said Dale Gieringer, 
state director for the National Organization for the Reform of Marijuana Laws.

Cities have no experience regulating pot farms, and it's bound to 
take Oakland time to work out the kinks, he added.

"Oakland wants to be on the forefront of this and start allowing 
industrial size," Gieringer said. "It's a bold vision, but it's also 
one that's vulnerable to error, raids and technical glitches."
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MAP posted-by: Richard Lake