High Times: Oakland City Council Legalizes Industrial Marijuana Farms

It's a place where medical marijuana is already legal, and pot dispensaries are wedged between clothing boutiques and coffee shops. It's got a marijuana university, Oaksterdam, where attendees can learn the ins and outs of pot politics, horticulture, cooking, even "budtending." And a year ago, Oakland became the first city in the nation to tax its pot dispensaries, in a kind of hippie-meets-"the man" effort to get the city out of the red.

So while opponents may see the city's latest move as one more notch on the slippery slope, it's no big surprise that local politicians took Oakland's pot policy one step further this week, approving large-scale, industrial farming that advocates believe could net the cash-strapped city a whopping $38 million each year.

Approved 5–2 by the City Council on Tuesday, the measure will grant industrial cultivation licenses to four lucky growers, in plots that can be as large as 100,000 square feet. Applicants will have to pay a $5,000 administrative fee, $211,000 for an annual permit, and then, of course, they'll be taxed on their sales come January: Oakland levies 1.8 percent on cannabis sales now, and the tax is likely to rise to as much as 12 percent.

Marijuana consumption—for medical use—has been legal in California since 1996, when voters passed Proposition 215. But "medicinal" is something of an open joke in the state, where anyone older than 18 with a doctor's note—easy to get for ailments like anxiety or cramps, if you're willing to pay—can obtain an ID card allowing access to any of the state's hundreds of dispensaries. ("You can basically get a doctor's recommendation for anything," one dispensary told me last October, when I visited his pot shop.) Not all of those dispensaries are legally recognized, however: there's a growing discrepancy over how California's laws mesh (or don't) with local and federal regulations. But Oakland is unique in that it has four licensed and regulated dispensaries. Approved by 80 percent of voters last July—and unopposed by any organization (including law enforcement)—the tax was pushed by the dispensary owners themselves, who hoped the model would prove to the rest of California that a regulated marijuana industry can be both profitable and responsible. "The reality is we're creating jobs, improving the city, filling empty store spaces, and when people come down here to Oakland they can see that," says Richard Lee, the founder of Oaksterdam and the owner of a number of local dispensaries.

The newest measure, meanwhile, has pitted small-scale "garden" growers against those who favor a bigger system they believe will reduce reliance on large-scale drug cartels, ensure a high-quality product, and help cut down on rampant crime among bootleg growers. But the reality is that, while all of that may be true, Oakland can't help but see dollar signs. Advocates have estimated that the newest measure could make Oakland—which faces a $83 million budget deficit this year—the provider of nearly a quarter of the pot consumed by Californians. The state's residents, meanwhile burn through 175 tons of legal marijuana each year. (Do we need to do the math?)

To put the icing on the cake, just imagine what could happen if the public votes to legalize recreational marijuana—a measure, sponsored by one of Oakland's own, that will appear on the November ballot. Harvard economist Jeffrey Miron has estimated that cannabis prohibition costs the nation $7 billion in potential tax revenue; Oakland City Council member Rebecca Kaplan has said the revenue already being generated by the current tax will help save libraries, parks, and other public services. If that's the case, advocates contend, doesn't a taxation measure make simple economic sense? "People are no longer outraged by the idea of legalization," former San Francisco mayor Willie Brown told San Francisco Chronicle last year. "And truth be told, there is just too much money to be made both by the people who grow marijuana and the cities and counties that would be able to tax it." If Oakland has anything to do with it, it's high time the rest of California sees just that.