Friday, March 04, 2011

The New York Times ran an article yesterday (p. A16: "Oakland's Bid to Cash in on Medical Marijauna Hits Federal Roadblock" by Malia Wollan). The hopes of growing their own have been dimmed considerably in recent weeks, with an exchange of letters between the city attorney and federal law enforcement officials making it clear that Washington will not tolerate plans for the large-scale marijuana farms the City Council approved last July. City officials had hoped to use the massive indoor growing facilities to raise some $38 million annually in fees and taxes at a time when the city is struggling with a $31 million deficit and 17 percent unemployment.
Hundreds of well-heeled investors and would-be farmers poured in from across the country to vie for four cultivation permits. Then, in December, just weeks before the city was set to issue the permits, the Council voted to stall the plan after the city’s attorney, John Russo, and a county district attorney warned the Council that the marijuana cultivation ordinance thwarted state law and that city officials could be held criminally liable.
Wollan quotes Allen St. Pierre, executive director for the National Organization for the Reform of Marijuana Laws as saying that Oakland is the centre of medical marijuana in the US, and that the Department of Justice is paying closer attention in Oakland because they’re mindful of the fact that there is enough political and commercial chutzpah to actually get this done. The only thing stopping these entrepreneurs from breaking ground tomorrow is this letter from the feds.
Thearticle notes that dozens of groups spent months and hundreds of thousands of dollars on business plans, including Ben Bronfman, an heir to the Seagram liquor fortune and fiancĂ© of the rapper M.I.A., who leased 11 acres of land by the airport where he and partners had hoped to install enormous greenhouses that would produce environmentally friendly marijuana using a massive, experimental carbon-capturing device. “Cannabis is a more constructive thing to have in our society than alcohol,” he said.
Jeff Wilcox, a former commercial real estate developer turned medical marijuana advocate, was one of the first in line for a cultivation permit. He spent $120,000 and two years developing a $20 million plan to transform a 172,000-square-foot office park he owns into a high-tech facility capable of growing 23 pounds of medical marijuana a day, an annual crop worth up to $58 million. In accordance with city rules, much of that money would have been turned back into city coffers and into nonprofit organizations.
Many of the investors who flocked to Oakland are now taking their money and their marijuana know-how elsewhere.
“I applaud the city for pushing the envelope, but it’s frustrating for those of us who spent a lot of time and money on this process,” said Derek Peterson, a former Wall Street banker turned marijuana entrepreneur who spent $80,000 on his permit application.
Fourteen states and the District of Columbia now have medical marijuana laws on the books; Peterson is applying for a permit to do just that in Arizona.
“Right now Oakland is far too visible for this kind of investment,” said Scott Hawkins, who worked as a consultant on a permit application on behalf of Richard Lee, the founder of Oaksterdam University, a medical marijuana trade school here. “Investors don’t want to risk their capital in this situation unless things can get worked out between the City Council and the Department of Justice and the city attorney’s office.”
So that is a setback for the city, I guess they'll just have to keep on paying high fees to dealers and stay in the red with the city budget. This will help keep the Mexican cartels in business shooting each other up and any civilians who get in the way of their drug runs to Gringoland.

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