The Silicon Valley of Cannabis?

Oakland takes steps to approve large-scale indoor marijuana farms:

After hours of public testimony, the City Council voted 5 to 2 to permit large-scale indoor marijuana plantations. The struggling city, which faces a $31 million deficit and has a 17 percent unemployment rate, estimates that the marijuana factories could bring in as much as $38 million annually in fees and taxes.

"As the industry continues to emerge and grow, we know that other cities are looking at this," said Councilwoman Rebecca Kaplan, who is running for mayor. "It's important for Oakland to be a vital part of the growth and development of licensed facilities."

While the city has been one of the most welcoming in the state to medical marijuana purveyors, how the drug is grown has been largely unregulated. Oakland's new law, which requires a final vote from the City Council next week, would bring large-scale marijuana cultivators above ground, mandating that they pay a $211,000 annual fee, provide security, conduct criminal background checks on employees, install camera surveillance and fire-safe electrical systems, and buy insurance.

If the plan receives final approval, the city would begin issuing large-scale production permits in January.

Later in the story, one hopeful pot entrepreneur is quoted as pitching the project by asking the City Council, "You want to be the Silicon Valley of cannabis?" Whole thing here.

Comments

[FatDrunkAndStupid]

So given the fees, regulations, and requirements, the only people they are really being "welcoming" to is giant corporations or those with access to large amounts of capital. Small business need not apply. Working poor can maybe get a minimum wage job at the new farm if they somehow managed to get through life without being busted on some penny ante charge. Got to love leftist politicians. The true champions of the poor!

[Cthorm]

So What? This is one city that is putting a very high annual fee for growers to operate openly within the city. If Modesto came forward with a fee of $500, smaller growers would start off there. Oh, and somehow I doubt "giant corporations" are going to flock to Oakland to spend $200k to grow pot: are you kidding me?

[John]

It is bullshit. It is better than prohibition but not much else. Replacing an insane prohibition scheme with a government sanctioned oligarchy is not exactly ideal.

This was sadly predictable. The exact same thing happened when they legalized gambling. Instead of just making it legal and open to competition, they gave exclusive rights to the politically connected.

In the future the DEA will be enforcing the monopoly not prohibition.

[Cthorm]

This is a city-level regulation. City-level regulations are easily curtailed through competition. Look at Cleveland. With any luck, Los Angeles will have the foresight (or more likely oversight) to have much more lax requirements, prompting large scale growers to locate there instead. Hell, if they don't do it right, Riverside will: they've got plenty of cheap warehouses to grow in too.

[skr]

Or more likely some small mountain town that has a brand that can confer special provenance.

[Cthorm]

There is plenty of room for different brands, flavors and growing techniques. Earthy-types will prefer mountain or coastal outdoor strains from select regions. For me, I'll take the selectively-bred hydroponic stuff from the climate-controlled warehouse.

[skr]

I think it will be difficult for a warehouse to compete with giant greenhouses in climates that are more conducive. They can still be hydroponically grown and have lights but with a lot less hvac overhead. Can probably get away with evaporative coolers especially since they will only need the lights on to control photoperiod.

[R C Dean]

So given the fees, regulations, and requirements, this is not ideal, but a lot better than full prohibition.

[Apologetic California]

Or more likely, the Modesto of Cannabis.

[Joe_D]

This is a good thing. But now it's clear that the left supports legalization because they feel a terrible need to have a virgin industry to regulate, and regulate hard!!

[Geotpf]

That's not why the "left" is for medical pot, and you know it. They are for it for the same reason they are for univseral health care-they want everybody to be able to get the best medical treatment possible.

[SugarFree]

they want everybody to be able to get the best medical treatment possible.

And they don't care who they have to rob, bankrupt or what they have destroy to do it.

[John]

It is for the children.

[SugarFree]

If by that you mean the bill, you are correct.

[Azathoth]

And I thought they were for medical pot so that everyone'd be too baked to realise that they were getting a stale pack of twinkies insteady of a new hip.

[Geotpf]

Won't these huge farms have a big bull's eye for the Feds to raid?

[Cthorm]

If the Feds start raiding businesses which are legal under State and City laws, they'll really force the issue. I don't think they'll be on the winning side this time.

[jasno]

Wow... up until you pointed that out, I was completely against this measure.

Now we'll have a large, high-profile, local-government supported growing operation just hanging right there in front of the feds. If they raid, we win, if they don't, we win.

Nice job Oakland. Sorry to hear you won't make much money off of this though, since people will just get their weed from Berkeley, or their old street dealers.

[TallDave]

Yep. Eventually, a policy like this collapses under the weight of its own absurdity.

[scott clark]

I actually think the Feds will be on the winning side. CA will roll over, the city will roll over in favor of the DEA, and any Federal grant money for roads and schools and medicaid support that the Feds threaten due to the CA drug trafficing. CA voters may be upset, but mid West politicians and Southern politicians would probably keep on keeping on in support of the DEA.

[jasno]

I take it you're not from California - or maybe you are, because most Californians don't have a fucking clue either.

The voters passed an initiative. In our state, that means the legislature can't do jack shit to limit the freedoms that the people gave themselves via the initiative process.

So, no, CA won't 'roll over', unless it is by another expensive and drawn-out initiative. The folks who drafted the original initiative are fucking super-geniuses, and even though they may be liberal bastards, should still go down in libertarian history as fucking super-giants.

[scott clark]

By roll over, I meant that the CA gov't, state and local, won't fight to protect the rights of the canabis growers from the predation of the Fed's DEA. For instance, the Oakland police will not arrest DEA agents who destroy the property of otherwise law-abiding industrial canabis farmers. And CA state entities won't file federal lawsuits against the federal gov't asking for injuctive relief from drug enforcement and if they did, I suspect that they would lose. They won't try to fight the federal gov't 'cause the feds can threaten the revenue streams I mentioned above. Now if CA wanted to fight that, they could make the state's employers remit income tax withholdings first to CA, and then CA could decide if they wanted to remit those taxes along to the IRS. But this is a fight CA won't want to have. So I agree a raid would force the issue, you think it would come out in favor of increased freedom or at least more favorible public opinion for drug legalization, I suspect it would come out in favor of the Feds, at least for immediate and medium term time frames. While drug legalization has been gaining ground around the country, I would think it still has a ways to go before the central gov't apparatus would lose in a conflict with any one or even a handful of states.
Don't get me wrong, I am glad Oakland is doing this, but I just suspect there may be some legal trouble brewing over the horizon that does not bode well for state's rights.

[Dello]

My thought exactly: Who's gonna spend the money for a large-scale set-up, only to lose it all to the feds, and be charged all the crimes associated with that huge operation?

[R C Dean]

Well, if I was one of those internet trillionaires, I could see providing the funding for one of these (as a non-profit, of course), just to stir the pot.

I would make sure to never set foot inside of it or have one single thing to do with operations.

Even at that, I'd be risking RICO charges from the feds. So I'd probably plan to spend a lot of time on my island off the coast of Panama.

[Kroneborge]

Actually, I would LOAN the money to some operation to do it. I wouldn't want to put in capital. To likely to be caught by rico or some bullshit as a dealer.

[TallDave]

I would, if I were in the area. You should be able to make back your investment in a year, then it's all profit.

[?]

"You want to be the Silicon Valley of cannabis?"

He had a chance right there to jokingly name it (420 Plain or some other dumb pot shit), get quoted, and maybe have it stick forever.

Shouldn't have smoked up before the show, history-not-making guy.

[The Gobbler]

"The Silicon Valley of Cannabis?"

So there's a pot bubble in our future?

[Tim]

1970 : Pot abundant, cheap, easy to get and illegal.

2020: Pot legal and recognized as a therapeutic drug, regulated by Gubmint Healthcare. As a result pot is now legal but impossible to obtain.

Progress!

[skr]

Unlikely. If it is legal, there will be plenty of people growing it in their backyards. It will be easy to obtain.

[John]

Easy to obtain but the prevalence of workplace drug testing makes it impossible for most to use.

[skr]

I don't know anyone that has ever ben tested in the workplace except a friend who is in the military.

[Tim]

See "raw milk" controversey elsewhere at Reason.

[skr]

Really, I didn't realize it was so easy to raise cows in your backyard in Los Angeles. Oh wait...

[R C Dean]

The more people who can grow and use it legally, the less viable prohibition is.

Lets see if incrementalism works both ways.

[prolefeed]

Tim -- the illegal option is always available. If government stifles too much, black markets always spring up to meet demand.

[prolefeed]

The big question is whether the overreach in fees and taxes and whatnot will make it profitable for cultivation to go legit, or whether it will be more profitable for small growers to continue to operate outside the law, or maybe both -- big growers paying the baksheesh to the state, small growers continuing to risk imprisonment.

[R C Dean]

I think the answer is yes.

[TallDave]

It will depend on how big the economics of scale are relative to the taxes.

Even with 900% taxes, there aren't many home tobacco growers.

[SIV]

Ever try to grow tobacco? Not easy.

Even a brain-dead doper can grow good weed.

[Tim]

Howard Dean,he of the infamous scream, had a plan to legalize medicinal marijuana back when he was Gubnor of Vermont. Basically it involved THC pills produced at enormous expense by pharma and maintained the ban on growing. Typical.

[Tim]

BTW the people who actually tried both said the techie wonder pills didn't alleviate symptoms.

[TallDave]

Glorious.

Even a few years ago, this seemed like a pipe dream.

[grass roots]

it is funny to me that the only people in the running for these massive grows are those that have been growing illegally for years. They were lucky enough not to get pinched and now with their windfalls and the help of the crooked, greasy, myopic, forever misdirected oakland city council are eliminating the competition. These mega grows will kill the cottage industtry. Once again wealth will be transfered from the many to the few under the guise of tax revenue. Has anyone even thought about how much pot will be produced? 80% will just leave the state tax free anywayz. The california market is saturated as it is. I hope like hell the feds have the balls to enforce their laws.

[IceTrey]

Are the Feds going to arrest the officials of Oakland for conspiracy to manufacture marijuana?