OAKLAND — City Councilmembers Larry Reid and Rebecca Kaplan are planning to propose new legislation possibly as soon as this month that they hope will help limit the public hazards often associated with large-scale illegal marijuana growing operations.

Their plan would work like this: Oakland would sanction a small number of commercial medical marijuana cultivators, regulate them carefully, collect taxes on the revenue and, Reid and Kaplan hope, help keep neighborhoods safer.

"There are a lot of fires that are started by people out there trying to put their own systems in place," Reid said. "Hopefully, issuing these three or four permits will help move it out of residential neighborhoods and into industrial neighborhoods where it's done right."

To supporters of the idea, issuing permits for commercial growing is a logical step after Oakland became the country's first city in 2009 to adopt a voter-approved special tax on medical cannabis dispensaries.

The proposal is limited in scope. The city would issue permits to no more than four cultivation operations, while expanding the number of legally operating dispensaries from four to six, the two council members said. The plan could go to the council's public safety committee as soon as June 22.

Kaplan said if the legislation is passed, the permits would be issued through a process that would take into account safety, environmental and labor standards, among other factors. The operations would be subject to rigorous fire and safety code inspections, she said.


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"The idea is to begin with a small number with very rigorous oversight," Kaplan said. "Once that's up and running and we've seen it can work, we can come back and amend (the ordinance)."

Some are skeptical the initial proposal would do much to stem the dangers of illegal marijuana grows, however.

Sgt. Barry Donelan, an arson and bomb investigator with the Oakland Police Department, said he doesn't disagree with the proposal, but said, "What it means is four of the largest medical marijuana grows potentially won't catch fire. It won't make the marijuana grows going on anywhere else in the city any safer than they are."

The competition to land a cultivation permit could be tough. Jeff Wilcox, executive director of AgraMed Inc.; Dhar Mann, founder of iGrow; and Richard Lee, founder of Oaksterdam University and the main proponent of a November ballot measure that would legalize recreational use of marijuana by adults 21 and older, all plan to pursue one — though Lee said he is generally supportive of licensing more small-scale cultivators as opposed to a handful of larger ones.

It remains to be seen how much revenue the city would receive by issuing the permits, but an economic study commissioned by Wilcox said a commercial growing operation in a 170,000-square-foot facility he owns in East Oakland off Interstate 880 would generate $2 million in annual revenue for Oakland's general fund — which is now facing a $31 million deficit for the fiscal year beginning July 1.

"Oakland's been pretty brave in what they've done on medical cannabis," Wilcox said. "When I started talking to people about this, I got a lot of support up and down from city leaders."

Mann, meanwhile, said he and others working with him plan to launch an operation called GROPECH — Grass Roots of Oakland Philanthropic and Economic Coalition for Humanity. The idea, he said, would be that after the operation covered operating expenses, fees and taxes, it would use what's leftover to fund nonprofit organizations focusing on issues such as education, foreclosure prevention or domestic violence.

The cultivation permits could also mean hundreds of good-paying jobs in an industry now working with organized labor. Almost 100 workers in Oakland's medical marijuana industry voted recently to join the United Food and Commercial Workers union.

Dan Rush, special operations director for UFCW Local 5, which is based in San Jose, said with the Reid-Kaplan legislation, 1,200 to 1,500 medical marijuana workers could end up signing union cards. He said that while the new workers are welcome, the industry should proceed cautiously.

"Local 5 is determined to work with people who are serious and effective in this industry," Rush said. "We're also determined to weed out people who are irresponsible — who allow things like secondary sales, or who allow medical cannabis to fall into the wrong hands."