Oakland Approves Four Marijuana Factories

July 21, 2010— -- Oakland, California, gave preliminary approval Tuesday night to a plan to license four large-scale marijuana factories in a move intended to take its largely underground pot counterculture to new corporate levels.

The controversial plan makes Oakland the first city in the nation to license wholesale pot cultivation, or what one proponent called the "Silicon Valley of Canabis." The 5-2 vote came after two hours of heated debate.

"This is a monumental step forward," Dale Gieringer, an Oakland resident and marijuana activist.

The measure, which pitted small and midsized "gardeners" against larger producers, initially allows the large farms to sell only to medical marijuana dispensaries. The ordinance must still be approved on a second, final vote.

The cash-strapped city stands to benefit later if voters pass a November initiative to legalize recreational use of marijuana. In addition, Oakland's four marijuana factories would pay an annual fee of $211,000, which would support a city staff to ensure they are operated safely and securely.

The ordinance has provoked a backlash from small-time growers who fear exclusion from the booming pot trade.

"This is about big money," Gieringer told ABCNews.com. "These are, by far, the largest facilities ever proposed in the United States. With only four competitors, it's going to be an oligopoly."

Sponsors of the ordinance have vowed to pass regulations to qualify small and midsized growers for city permits.

Oakland would still allow small unregulated cultivation in homes but replaces hundreds of larger operations with the four industrial operations "as the only legal model."

The midsized operations are often set up in gutted homes and warehouses, posing fire hazards because of electrical fires and spawning violent crime.