Growing pains - Page 3

Oakland and other Bay Area cities move to regulate and tax medical marijuana cultivation

The marijuana business is booming in Oakland and other Bay Area cities, now local governments are seeking a piece of the action

Kaplan, who has been working on her ordinance for almost a year and got help from students in UC Berkeley's Goldman School of Public Policy, agreed that the current legal requirements for growing medical marijuana are unclear: "There isn't a right way [to permit cultivation facilities] under state law. The law isn't clear."

Attorney David Owen, who has researched medical marijuana laws for the new SPARC dispensary in San Francisco and for local growers, echoed the point. "The short answer is that we know so little about the boundaries of state law."

Prop. 215, the 1996 measure that legalized medical marijuana, was broadly written and then codified largely by Senate Bill 420, portions of which were later struck down by the courts. But enforcement of marijuana laws has primarily been done by the federal government, which backed off after President Barack Obama took office, leaving state and local officials to regulate a fast-growing industry using standards that the courts have yet to clarify.

"We don't have appellate court decisions to interpret a lot of key terms in state law," Owen said. "We don't really know what state law says."

For example, Owen said the widely used term "dispensary" doesn't even appear in state law. Local jurisdictions often define how much pot a patient can grow. For example, Oakland allows groups of three patients to grow up to 72 plants in 96 square feet. But most of those standards haven't been held up by the courts. And even though state law says growers must be part of the same collective as their patients, Owen said, "In theory, you could have a collective with 37 million members."

Although Owen said a large scale doesn't necessarily make a marijuana operation illegal, he said permitting a 170,000 square foot facility is bound to draw attention from the feds: "I guarantee the DEA will be at their doorstep the day they open."

Council member Nadel said Oakland could be liable then as well, noting that it would be permitting a facility that would meet about 60 percent of the entire Bay Area's demand for 35,000 pounds of pot per year. "Thus, to prevent diversion to illegal markets and collective members outside of the cultivation collective (which would violate state law), the city must act responsibly and set a limit on the total size of cultivation allowed in Oakland. While the memo from the Council members discusses the alternative method [permitting a smaller capacity], it does not recognize the problems with projecting sales to dispensaries outside the Bay Area," Nadel wrote.

Kaplan said the ordinance is a starting point that can be further refined by staff. But she emphasized the need to regulate the industry, warning of risks to Oakland residents. Her measure's staff report attributes at least seven house fires, eight robberies, seven burglaries, and two homicides to unregulated growing operations in 2008 and 2009. Kaplan also said she worries about the possibility of "another Oakland Hills fire."

Yet Kaplan, who is running for mayor, also told us the taxes are important in a city that was recently forced to fire 80 police officers. "Given Oakland's budget crisis," she said, "the revenue for the city is no small thing."