LARGE POT FARMS ON VERGE OF APPROVAL IN OAKLAND

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."