Oakland Closer to Becoming U.S. Cannabis Capital

Oakland has moved closer to becoming the first city in the United States to authorize wholesale pot cultivation.

The Oakland City Council voted 5-2 with one abstention late Tuesday in favor of a plan to license four production plants where marijuana would be grown, packaged and processed.

The vote came after more than two hours of public comment, with speakers divided between those who opposed the measure - largely on the grounds that it would put small medical marijuana growers out of business - and those who said it would generate millions of dollars for the California city in taxes and sales and create hundreds of jobs.

The plants would not be limited in size - one potential applicant for a license wants to open a plant that would produce over 21,000 pounds of pot a year - but they would be heavily taxed and regulated.

Those vying for one of the four licenses would have to pay $211,000 in annual permit fees, carry $2 million worth of liability insurance and be prepared to devote up to 8 percent of gross sales to taxes.

Proponents of the measure also touted the possibility of Oakland becoming the U.S. cannabis capital, especially if California voters approve the legalization of recreational marijuana in November.

The measure's supporters have said it could generate millions of dollars for Oakland in taxes and sales, create hundreds of jobs and position Oakland to reap dividends if voters pass a November initiative to legalize recreational use of marijuana reports CBS News 5 in San Fracisco.

Opponents have said it would drive small growers out of business.

The Oakland fire department blames a dramatic rise in the number of electrical fires between 2006 and 2009 in part to marijuana being grown indoors with improperly wired fans and lights. The police department said eight robberies, seven burglaries and two murders have been linked to marijuana grows in the last two years.

"Do you want to be the "Silicon Valley of Cannabis?" said Jeff Wilcox, a local businessman who wants to build "AgraMed," a 7.4-acre plant with a bakery, a lab and 100,000 square feet of cultivation space.

But Stephen DeAngelo, executive director of Harborside Health Center, the largest medical marijuana dispensary in the world, said small growers were coming to him terrified that the ordinance would mean the end of their livelihoods.

One of the co-sponsors of the ordinance, Rebecca Kaplan, said it would not take effect until January, giving the council time to come up with a plan for medium-sized growers.

Councilwoman Nancy Nadel said she worried about the quality of the product, wanted environmental protections and questioned why the council was voting on the measure now if it wasn't going to take effect until January.

The measure will go before the council one more time for a final vote, but the outcome isn't expected to change.