Tuesday, July 6, 2010
City of Oakland: Pot Farm Taxes To Net $38 Million Per Year
Regulation & Legislation David Downs — Tue, Jul 6, 2010 at 1:46 PM
The City of Oakland's cutting-edge approach to its medical cannabis sector is about to make national headlines again with the long-awaited release of city plans for licensing large-scale marijuana grows. If the draft ordinances pass, the city stands to reap almost $38 million in taxes per year by growing one-fifth of all statewide medicinal marijuana.
The city is looking at permitting up to four large-scale grows with no limitations on each farm's size. The rules would still let patients and caregivers home-grow up to 96 square-feet, but larger grows would require a $211,000 cultivation permit to be issued starting January 1, 2011.
The potential rules go before the city's Public Safety Committee on Tuesday, July 13, and represent the first attempt by the city at regulating its numerous indoor cultivators.
The staff report from Councilman Larry Reid and Councilwoman Rebecca Kaplan's offices says permitting large-scale grows will increase safety by undercutting the price of homegrowers; who are prone to fires and robberies. The Oakland Fire Department and Police Department told city staff of seven cannabis-related electrical fires in 2008 and 2009, though “many more cannabis-related fires have likely gone unreported.” Residential electrical fires in Oakland rose from 133 in 2006 to 276 in 2009. Police tallied eight robberies, seven burglaries, and two homicides clearly linked to cultivation in the last two years. “Again, these statistics are likely to understate the extent of the problem.”
"You've got people who are going around putting their own systems in place the wrong way and the fire department says there is potential for even greater fires to happen in residences," Councilman Reid told Legalization Nation.
Permittees will be subject to heavy regulation including quarterly reports, a perennial state of audit, taxes, a $5,000 application fee, and a $211,000 yearly registration fee. Potential permitees would be ranked on a points system by the planning department, with bonus points for local ownership, local hiring, third-party oversight, and community benefits.
The Alameda County Agricultural Commissioner would help monitor pesticide and pest testing at permitted farms, and the Department of Weights and Measures would be involved as well. THC testing mandates in the draft rules present a potential boon to the nascent cannabis testing industry.
Most proposed farms range in size from 20,000 square feet to 100,000 square feet, the city says. Any grower who didn't have a permit would be limited to less than 96 square-feet, and would be required to lock up their farm, keep no more than 49 ounces on-site, hardwire all electrical, get city approval for rewiring, and maintain a low profile without neighbor complaints.
The draft rules would also up the number of local dispensaries from four to six, allow for them to be near each other, allow on-site consumption, mandate THC testing, track how much dispensaries get from city grows, and increase annual fees from $30,000 to $60,000.
The city says increasing the amount of dispensaries prevents market domination by any particular one. That explanation would seem to contradict permitting just four huge, large-scale grows where the city is essentially picking a winner; a fact that has some local dispensaries grumbling.
The City of Oakland's four dispensaries made $28 million in gross sales in 2009 and dispensary sales are up 40 percent from 2008. Locally, they dispensed 6,000 pounds of cannabis last year, which required 45,000 square-feet of growing space. The state as a whole consumes an estimated 175 tons of medical cannabis per year, which requires 1.75 million square-feet of growing space. Oakland assumes it can grow 20 percent of the state's supply on a combined 350,000 square-feet, netting the city almost $38 million annually.
Comments (5)
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And one other thing: The "staff report" drafted by Kaplan/Lee and company is replete with factual errors and outright lies. The rhetoric used by Kaplan about the so-called spike in residential fires...well, THAT'S the precise reason why professional growers prefer industrial properties: It's safer for the neighborhoods and reduces such risks by already having high-voltage power installed. But no, Oakland's plan will forbid growing in industrial properties (except for the hand-chosen four), and insist on "unsafe" residential grows. WTF??? Clearly, the Oakland "plan" is eliminate all competition to their chosen four, and in the process -- wiping out virtually every legal medical cannabis collective in Oakland. You show me a collective of three patients able to get by on 96 square feet of cultivation area. Give me a break. MMJ patients -- show your outrage!
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This change does affect small collectives; mine will be forced to close because of the miniscule 96 square foot cultivation area allowance. In the meantime, the Oakland City Council will create a monopoly of huge medical marijuana growers. You should expect outrage from medical marijuana patients, collectives, and small medicine growers. Oakland's plan does not allow adequate cultivation space for legal collectives, yet grants cultivation permits to four handpicked millionaires, allowing them to grow as much marijuana as they want, and they can sell their inferior product to any dispensary in California. The author of Prop. 19 (who surely will receive a permit) will reap millions $$$. Jack Herer was right: Cannabusiness is a far greater threat than we realized. November is just a few months away. You can choose between poor, mom-and-pop gardeners versus rich, corporate opportunists. This is just a taste of what you might expect with Prop 19. Vote NO on Proposition 19.
Please clarify in view of ski's remarks--how would this law affect people growing solely for their own use on the scale allowed by current law (which I seem to recall is defined either by number of plants or square footage).
Even Len Tillem said on the radio yesterday (http://www.kgoam810.com/Article.asp?id=186…) that landlords shouldn't worry about tenants growing a few plants for personal use, what they should worry about is large-scale operations with illicit 220-volt systems and mold in the walls. If this law would change that I think it's a step in the wrong direction.
Pretty sick. Oaksterdam trains hundreds (thousands?) of graduates to grow what the clubs will no longer buy, now that their vertically integrated monopolies have programmed their captive regulators to squeeze out the little people. Maybe Oaksterdam U can start a new class in monopoly capitalism? Seems like their graduates are learning something about it right now.
Gee, I wonder if weed would grow in the sun?
How convenient the city will only allow four "farms" - only 4 clubs in the city are legal, and yet there's a 5th club running illegally in the heart of downtown (way to go city of Oakland).
I also love how suddenly the city is concerned that home growers are fire hazards. Not every patient who chooses to grow their medicine does so in a shoddy, DIY way. There are plenty of electricians in the patient community who offer proper wiring services to ensure safety and compliance.
Here's my question for the city: if you're so worried about fires, WHY are you allowing any type of indoor grow in large scale? Have you even done the research? You'd be creating the same type of fire hazard on a larger scale (even if it's wired properly). If Prop 19 passes, by some strange circumstance, then you better be prepared to enforce these "farms" being OUTDOOR operations. Greenhouses and land plots cost a fraction of the monies required for such large-scale operations. But no...that would make too much sense. Instead, we'll give the 4 club owners whatever they want since they're dangling so much cash in the city's face.
Here's my question to the four clubs (the only operators with enough capital reserves to open such a "farm" and pay the permits up front): if you're SO into helping patients, why are you spitting in the face of the patients who are currently GROWING the medicines YOU make a huge profit off? How is that compassionate? How is that showing any form of thanks or respect?
These clubs are not about compassion, they're not about finding holistic therapies that involve cannabis, they're only about making huge profits.
WAKE UP people...this is just the tip of the iceberg. It's no wonder Richard Lee's employees are voting AGAINST Prop 19 - he's already fucked his own people over with the unionization effort...and if he doesn't give a shit about his own employees...what makes you think he (or Wilcox and DeAngelo) care about patients' needs and rights?
If Prop 19 does pass, the City of Oakland better step up their responsibility and make sure these permits are difficult to obtain and easy to lose. The city is being played like a fool - and its too starved for revenues not to salivate.
Sorry Lee, you don't get your cake and eat it too while fucking over all the patients who've MADE you what you are. The same goes to Wilcox and DeAngelo. You're profiteers; nothing more. I wouldn't be surprised if one, or all, of these operators won't suddenly show up on city council next term. And good ole Kaplan is opening the backdoor for them to sneak in behind the lime light. Wake up voters...corruption always begins with a smile and a handshake.
The one consolation if this does come to pass is that, like any other consumable commodity, the larger-scale the harvest and processing, the lower quality of the resulting crops.
Peace.
PS - And for all the flamers wanting to pounce...no, I'm not a grower. I am a patient and I belong to a genuine collective that takes care of its members. And if this sort of crap flies, all the small to medium-size collectives like the one I belong to will be forced out of business. Again, where's the compassion in that?
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