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After Federal Scrutiny, Oakland Revisits Pot Farm Plans

City Council will vote Tuesday, but city attorney still won't sign off

The Oakland City Council is set to discuss re-jiggered pot farm regulations Tuesday – but the city’s lawyers still haven’t signed off on the controversial plans that have put the city in a national spotlight.

Officials froze ambitious plans to permit four enormous, unlimited-in-size marijuana growing operations late last year after the Department of Justice raised concerns that they would violate federal drug laws -- and fall outside of state medical marijuana protections. Alameda County District Attorney Nancy O’Malley went as far as to say that city officials could be jailed if it went forward.

City Councilmember Desley Brooks rewrote the legislation to accommodate those concerns, as The Bay Citizen first reported. In the newest iteration (read it here), the pot farms would each have to be owned by a dispensary. Five permits would be available and the farms would be capped at 50,000-square-feet each. The changes are meant to address concerns that stand-alone pot growing businesses would fly in the face of state law, which requires medical marijuana to be grown by not-for-profit collectives.

But a spokesman for City Attorney John Russo, who raised a red flag about the pot farm plans, said that Russo hasn’t signed off on the new version.

“This wasn't provided for us to review,” said Alex Katz, Russo’s spokesman. “We didn’t see it until it went into the package on Friday.”

However, Brooks said that the city attorney was provided with a draft – and even made comments on it in an opinion sent to the City Council. 

“They said there were multiple options," Brooks said. "One option that we could follow was one similar to mine.”

In response, Katz didn’t deny that Russo had seen a draft, saying “if that’s true, the version that appeared on the agenda is not the one that we reviewed.”

Katz said the city attorney is currently working on “amendments to the ordinance that we want to submit to the council for their consideration that would be safer from a liability standpoint.”

Brooks said that she’s confident that her plan has solved most of the problems, saying “from a legal standpoint nothing’s 100 percent, but I think this puts us real close to compliance.”

The changes would mean that ambitious potrepreneurs can apply for a permit to grow and sell marijuana. The city already has four dispensaries and is expected to expand that number to eight. 

Oakland officials had initially hoped to reap huge tax benefits from allowing pot to be cultivated in the city limits. A $211,000 fee, plus taxes, would’ve flowed into the cities depleted coffers. Now, those dreams may be out of reach, since the grows won’t be separate from dispensaries, which already pay the city a 5 percent business tax. Brooks’ revision includes the fee, but she said that keeping it is still an open question that will be discussed.

The changes are good news for Oakland’s established dispensaries, such as the enormous Harborside Health Center, which already have their dispensary permit. For potrepreneurs like Jeff Wilcox, who’s been planning an enormous pot farm factory and spurred the legislation, it means they’ll have to open a dispensary as well.

Oakland’s attempt to regulate cultivation is putting it at the vanguard. Several cities around the Bay Area have rules for dispensaries, but none for cultivation. Oakland officials have been looking into regulating grow operations not only to generate new taxes, but also to squelch problems such as fires from jumped wires that are attendant with under-the-radar growing operations.

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