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Medical Marijuana Growers Worry About Threat From Superstores

Containers of medical marijuana at the Harborside Health Center

Containers of medical marijuana at the Harborside Health Center

After weathering the fear of federal prosecution and competition from drug cartels, California's medical marijuana growers see a new threat on the horizon. Oakland is about to become the first city to authorize large scale marijuana cultivation. The move could generate millions of dollars in taxes and create hundreds of new jobs. While the measure has yet to pass, current medical marijuana growers fear the move will drive many of them out of business.

Oakland, California is one step closer to becoming the Cannabis Capital of the U.S. following the city's proposal to issue licenses for large scale cultivation of medical marijuana. The city plans to issue up to four licenses to growers willing to pay $200,000 every year and up to 8 percent of gross sales in taxes.

One of the applicants is the iGrow Superstore, which offers just about everything one needs to grow marijuana but doesn't grow any. Co-owner Derek Peterson plans to produce up to 10,000 kilos per year if the city approves his application.

"California has done a phenomenal job of regulating the dispensaries, the sales aspect of it," said Derek Peterson. "What has never been talked about is the cultivation and transportation. That has always been in the dark."

Although the measure has yet to be approved, the issue of permits to grow unlimited amounts of cannabis has many growers green with envy.

Stephen DeAngelo is executive director of Harborside Health Center, the largest marijuana dispensary in the U.S.

"If only large growers of cannabis are licensed, then all of the small and medium-sized growers would become illegal and would be forced to close and would lose their livelihood," said Stephen DeAngelo.

Peterson disagrees. Rather than lose business, he believes local permits could generate large revenues for the city and reduce crime associated with small scale operations.

"You see a lot of home invasion robberies, a lot of home fires, a lot of unsafe conditions," he said. "These permitted facilities will be built out in a code-friendly matter by licensed electricians, civil engineers with LEED [Leadership in Energy and Environmental Design] -certified architects, and I think that's one of the most important things for the local community."

But DeAngelo likens the development of the cannabis industry to the local wine industry.

"To people who say that the only way to organize this industry would be with huge factories, I would ask them what Napa County [California wine region] would look like if there were only four huge industrial vineyards," he said. "It wouldn't be a very vibrant industry and I think the same thing holds true with cannabis."

Oakland's City Council is expected to pass the bill when it comes up for a final vote this month.

But the biggest change could come in November when California voters weigh in on proposition 19. It would legalize the possession and recreational use of non-medical marijuana.