Oakland’s smaller medical marijuana growers could face legal uncertainty after a divided City Council voted to offer licenses for industrial-scale marijuana farms starting in January 2011.

“Tonight you’re going to make an historic vote. This could be the first vote for medical cannabis cultivation,” Jeff Wilcox said during the two-hour public comment. “My idea was the Silicon Valley of cannabis, an office park for pot.”

Wilcox plans to apply for one of the new permits to open a 7.4-acre farm called AgraMed. He said he had originally been working with Stephen DeAngelo, the executive director of the massive Harborside Health Center cannabis dispensary before they split ways over ideological differences.Council members Nancy Nadel and Jean Quan both voted against Ignacio De La Fuente’s motion to approve an ordinance to license four large farms to supply licensed Oakland’s four licensed dispensaries, and others, with marijuana. Council president Jane Brunner abstained.

While the city council pledged to move forward on creating a separate license for small growers, Arturo Sanchez, an assistant to the city administrator, said that enforcement of marijuana farms outside of code will begin once the ordinance takes effect in January.

If the Council is unable to approve a separate ordinance for smaller farms, marijuana growers would be stuck renting space in one of the licensed industrial spaces, or else they would be required to limit their gardens to a maximum of 96-square-feet (about the size of a small bedroom) if they want to stay within the law. This prospect drew over 120 requests to speak.

“I speak on behalf of the small and medium-sized growers,” DeAngelo told the Council. “For the past several weeks they’ve been coming to me terrified, some of them with tears in their eyes, asking me to stand up for their interests. It’s not the role of government to choose the winners and the losers in the market place.”

Several small grower proponents told the Council that the proposal would create a system similar to share-cropping in which entrepreneurs would be required to work as tenants if they wanted to grow legally grow cannabis. Council Member Desley Brooks expressed concern that the people with the money to start one of the four large-scale operations would be able to gain an economic advantage over smaller growers, but she acknowledged that’s the nature of capitalism.

“This issue is about jobs. It’s about jobs and taxes,” said union leader Dan Rush of UFCW 5, or in his words the “United Food and Cannabis Workers.” He said his union supports the legislation, but it isn’t against smaller-scale growers.

“The city has an obligation to put 80 police officers back to work. We should do everything we can to create those jobs,” Rush said. “Union 5’s position is we want unity in this industry and we want uniformity in this industry.”

Councilwoman Rebecca Kaplan, who proposed the ordinance with Larry Reid, spoke of the need for additional licensing for small growers and most of the Council seemed to share her sentiment. But the city has also suggested that industrial-scale operations are necessary to help combat a surge in residential fires that are believed to be the result of unsafe marijuana grows.

“The people setting the fires are stoners with dreams — making everybody look bad,” said Max Allstadt, a West Oakland carpenter who trims marijuana for a smaller grower to supplement his income.

Allstadt said that Oakland’s small growers are experienced professionals who are safely growing the best marijuana in town. He said that while licensing is not a major issue for these growers as they can easily stay under the radar of Oakland’s cash-strapped police and code enforcement officers, it is the proposed marijuana tax hike the city is considering that could really cause problems.

On Thursday, the City Council will consider putting a new marijuana tax on the ballot for the Nov. 2 general election. Marijuana dispensaries currently pay the same 1.8 percent gross receipts tax as other shops in the city, but the new tax proposal calls for anywhere between an eight and 12 percent tax on each dollar spent at cannabis establishments. The medical marijuana community has suggested, a more modest 5 percent, according to a city report.

The tax could bring in more than $3 million dollars in city revenue at the current rate of sale, but Quan said that the tax won’t generate quite as much money as some suggested.

Brunner on the other hand indicated that the primary reason for moving forward with industrial grow operations was to capture this anticipated tax revenue. She tried to make the ordinance contingent on the voter’s approval of the new tax, but her suggestion died after other council members refused to tie the two issues together.

See Oakland Local's coverage of the marijuana business here.