Oakland Ruling Helps Pot Farms Go Corporate

Image: Chelsea Daniele/Flickr

The “Wal-Marting” of weed, as this AP journalist calls it, is well underway in Oakland, where the city council approved industrial-scale pot farms. From the San Francisco Chronicle:

Council members and proponents of marijuana cultivation regulation viewed the proposal as smart public policy: It would generate revenue, ensure that fire and building codes are enforced, keep neighborhoods safe from robberies, and further position Oakland as the center of the state’s cannabis economy.

The regulations will award permits to four indoor marijuana farms. There will be no size limit, but there have been proposals for farms as large as 100,000 square feet – about the size of two football fields.

The regulations will require applicants to have a minimum of $3 million worth of insurance, hire security and pay a $211,000 annual permit fee. The city will be begin to issue permits in January and will allow the industrial farms to sell only to medical cannabis dispensaries.

From the AP:

Oakland’s four retail marijuana stores did $28 million in business last year, and if sales remain constant, the city would get $1.5 million this year from a dispensary business tax that voters adopted last summer. A similar tax on wholesale pot sales from the permitted grow sites to the dispensaries would bring in more than twice that amount, the city administrator’s office has estimated.

The move, and fledgling efforts in other California cities to sanction cannabis cultivation for the first time, has some marijuana advocates worried that regulations intended to bring order to the outlaw industry and new revenues to cash-strapped local governments could drive small “mom and pop” growers out of business. They complain that industrial-scale gardens would harm the environment, reduce quality and leave consumers with fewer strains from which to choose.

Those marijuana advocates are probably right, but since when has that stopped corporate activity? Oakland already taxes pot at 9.5%; the state of California is also inching towards taxation and legalization of marijuana. Taxes could make a dent in the state’s $38 billion deficit, if the economics hold up.

If California voters pass Prop. 19, which legalizes pot, in November, corporate pot farms may pop up all over the state, leading the way for other states to consider legalization.

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Written by Drea Knufken

Drea Knufken

Currently, I create and execute content- and PR strategies for clients, including thought leadership and messaging. I also ghostwrite and produce press releases, white papers, case studies and other collateral.