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It’s being called a second Gold Rush. There are rumors of entrepreneurs from Amsterdam sniffing around empty storefronts in Oaksterdam. With polls showing that voters could legalize marijuana in the November election, everyone wants in on the Cannabis action. And that includes broke cities like Oakland.

A proposed ordinance going before Oakland City Council’s Public Saftey Committe next week aims to bring some order to what is already an unruly marketplace. With an eye on curtailing small-time marijuana growers in the city, City Councilmembers Rebecca Kaplan and Larry Reid propose permitting four large, industrial-scale cultivators, who would then supply Oakland’s six dispensaries (the ordinance would add two dispensaries to the currently permitted four) with the 6,000 pounds of cannabis the dispensaries sell a year. Of course, that number will likely climb if marijuana is legalized for everyone, not just people with medical cards.

The ordinance will also come with a tax on the whole cannabis production line, from cultivation to the making of pot brownies. The rate hasn’t been determined, but Kaplan, who announced Wednesday she was running for mayor, said “it would definitely be higher than the 1.8 percent that we now have on dispensaries.” Kaplan said a proposed rate will be decided on next week when City Hall returns from furloughs.

If passed, Oakland's ordinance would be the first to regulate industrial cultivation of marijuana in addition to small-time producers.

Growing marijuana can be lucrative, but the city’s proposed new rules would eliminate small-timers. It would cost $5,000 just to apply for a cultivation permit, and a regulatory fee of $211,000 for the lucky winners. If one has the cash, it’s a small price to pay for the right to produce a crop with an estimated retail value of $7 million. The fee pays for regulating cultivation in Oakland, which will include enforcement against the guys with grow lights in their garages and backyard sheds.

Fire officials and cops have been complaining about this category of grower for a while now. Electrical fires in Oakland have increased from 133 to 276 between 2006 and 2009, a trend that’s partly blamed on indoor marijuana growing. The Oakland Police Department reports that in 2008 and 2009 there were eight robberies, seven burglaries, and two murders “linked to cannabis cultivation.” The cops think those numbers only show part of the problem.

While the ordinance talks only about medical marijuana, it’s clearly designed for a repeal-era marketplace. Richard Lee, the founder of Oaksterdam University and the brains behind Proposition 19, helped craft the ordinance. His inclination was to let a larger number of smaller growers cultivate legally. He likes the idea of modest barriers eliminating the truly shady characters from the business, but he’s also wary of stifling the marketplace. Lee thinks that there are only around a dozen cultivators with the resources to compete for one of the city’s four proposed cultivation permits. Lee estimates that the dispensaries will still buy 20 percent of their cannabis from small growers.

But if the ordinance works as planned, those growers will get less money per pound. Kaplan and Reid expect that the big cultivators will enjoy economies of scale and will be able to drive down the wholesale price of cannabis. The growers will have to do that, however, while submitting their crops and operations to inspections from county agriculture officials, the Oakland Fire Department, and others.

City and county meddling is just the beginning. Lee said that officials from the State Board of Equalization have already stopped by Oaksterdam University to discuss various ways to tax marijuana like cigarettes.