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Is Pot The Next Big Thing?


Aired 10/4/10

The prospect of legalizing California's $14 billion marijuana industry has many believing the Golden State could find its way out of an economic slump as the marijuana state. Find out who stands to win and lose if the underground pot business goes above-ground.

— Jeff Wilcox sits in an office chair, surrounded by 170,000 square feet of empty warehouse space and tells me we’re sitting in the “first commercial cannabis cultivation facility,” in the United States.

Video unavailable. Read transcript below.

Above: AgraMed founder Jeff Wilcox plans to convert his empty warehouse into a marijuana manufacturing plant in Oakland, California.

Wilcox is founder and CEO of AgraMed, a marijuana production company based in Oakland, California. For now, this vast warehouse space looks more like empty loft space then potential pot factory. But Wilcox said he’s secured $20 million in investment funds (most of it his own money) to make the transformation over the next five years.

“I approached the city of Oakland with a question. If cannabis was in our community could we legally grow it on a large scale, tax it regulate it, bring in union jobs,” Wilcox said.

Oakland’s city council liked the idea and recently passed legislation allowing large scale medical marijuana cultivation and harvesting.

That city’s decision may be a harbinger for what’s to come as Californians go to the polls next month to decide whether to legalize recreational marijuana state-wide. Proposition 19 allows possession of small amounts of marijuana for personal use, and it gives cities and counties the power to regulate and tax commercial marijuana sales.

Agramed’s business plan includes employing 300 people and producing 58 pounds of marijuana in a single day. That’s 33,000 joints. At today’s street value, that amounts to $330,000 in marijuana.

For now, the pot can only be sold for medicinal purposes and Wilcox’s company would have to operate as a non-profit. But if Proposition 19 passes, and marijuana becomes legal in California – all of that changes.

“Now if Proposition 19 passes, there is an avenue for profit company,” Wilcox said.

The marijuana trade is estimated to be worth $14 billion in California -- twice the value of the state’s leading agricultural commodity – dairy.

Given the size of the market, the potential for new jobs, and the promise of healthy profits and tax revenue, the prospect of legalizing marijuana in California has many believing the Golden State could find its way out of an economic slump as the marijuana state.

So far, nearly 300 people have expressed interest in applying for licenses to operate marijuana factories in Oakland. That city plans to issue only four permits later this year.

Wilcox hopes he’s gets one of them.

But one marijuana seller’s vision is another marijuana seller’s bad dream.

Enter Dwane Waters.

Video unavailable. Read transcript below.

Above: Dwane Waters is a self-described cannabis consultant and vendor who worries how legalizing marijuana in California would affect his business.

Waters describes himself as a “consultant…a vendor in what we call the cannabusiness.”

Waters operates his un-licensed marijuana business out of an un-marked second floor office space in Berkeley.

“I can honestly say this much about this industry at this time. There’s a lot of old money that doesn’t want the new money to come in. It’s very political,” Waters said.

In California, a pot grower can harvest an ounce of marijuana at a cost of $20 – and sell it for $400.

That profit margin will likely diminish dramatically if marijuana is mass produced and legal. The Rand Corporation, a national think tank, estimates the price of pot could drop by 80 percent.

And that’s a prospect that doesn’t sit well with Dwane Waters.

“But at this point in time, I hope the initiative doesn’t pass because I need a little more room. And we will be affected by the industrialization and corporatization of this industry. Can you imagine going to Wal-Mart and going to the pharmacy and being able to buy marijuana?

“This is what they are talking about,” Waters said.

Pete Dunbar is Chief of the Pleasant Hill police force in Northern California. He represents the California Police Association as their spokesperson against Proposition 19.

“Marijuana equals money,” Dunbar said.

Dunbar is worried cities may see Proposition 19 as a quick way to make a buck. Government analysts say the proposition could generate more than a billion dollars in revenue for the state.

“ I think the term morally bankrupt is probably an apropos term to think about we’re just thinking about marijuana and money, we’re not thinking about the short term and long term consequences of this. I think it’s very short sided,” Dunbar said.

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Avatar for user 'Buzzby'

Buzzby | October 4, 2010 at 1:46 p.m. ― 6 years, 4 months ago

It seems like the members of the vocal opposition to Proposition 19, whether pot growers, pot sellers, or law enforcement, all have something in common: they stand to lose money or jobs if it passes. The pot growers and dealers want to maintain their 1000% markup over the cost of production. The cops want to keep their federal drug task force grants, the want to keep their arrest counts high without much work or risk, and they'd hate to give up the money obtained by seizing people's houses, cars, boats, and airplanes.

Vote "YES!" on Proposition 19. Marijuana is a recreational drug similar to, but much safer than, alcohol or tobacco. It should be treated the same way and the people who choose to use the safest recreational drug known to Man should not be punished for making the wise choice.

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Avatar for user 'CaliforniaDefender'

CaliforniaDefender | October 4, 2010 at 2:54 p.m. ― 6 years, 4 months ago

Legalize, regulate, and heavily tax.

There is no substantive difference between marijuana and tobacco or alcohol.

Either ban all three or legalize all three.

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Avatar for user 'Joanne Faryon'

Joanne Faryon, KPBS Staff | October 4, 2010 at 3:51 p.m. ― 6 years, 4 months ago

Thanks for commenting Buzzby and CaliforniaDefender. We surveyed all elected officials in SD County on where they stand on Prop 19 - less than a third responded. We'll post all the results soon.
And, Kyla Calvert reporting Wednesday on prison stats for marijuana offences.

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Avatar for user 'Leonard Krivitsky'

Leonard Krivitsky | October 5, 2010 at 9:56 a.m. ― 6 years, 4 months ago

Cannabis is less physically addictive than caffeine, while the so-called "gateway drug" theory is a complete fantasy, and it was just recently called "half-baked" as a result of a scientific study. CNN reported that Cocaine use has dropped sharply, by 30% since 2002, which is really good news. I worked in addiction medicine for years, and this is what I can advice on the matter: Any suppression of Cannabis use will be immediately followed by an increase in alcohol/hard drug/prescription drug abuse! You don't believe me? Then maybe you will believe the Big Alcohol lobby that is financing the Cannabis Legalization opponents for exactly this reason. Right now Cannabis is just simply perceived as a much safer alternative to alcohol/hard drugs, which is precisely how it should be perceived. To have a society in which there is NO psychoactive substance use is an illusion, and it will be good for our government to realize this. So then, it becomes a matter of "safer choices", just like with the sex education. And Cannabis is, without a shadow of a doubt, a much safer choice than alcohol or hard drugs! Just very recently a research study in addiction medicine has determined that Cannabis may actually serve as an "exit" substance for recovering alcoholics/hard drug addicts! And there is another extremely important property of Cannabis that the prohibitionists would love to keep secret: Cannabis use suppresses violent urges and behaviors and, as one prestigious textbook says, "Only the unsophisticated think otherwise" Then, of course, there is a potential of Cannabis in chronic pain, where other drugs may be ineffective (or physically addictive), with very important potential consequences for our wounded veterans, many of whom have chronic pain. It is also worth noting that Cannabis may have certain preventative value for such devastating conditions as cancer and Alzheimer's disease. And all this comes with no danger of overdoses or induction of a physical dependence! Let's be very happy that the cocaine abuse rate is dropping. Let's not interfere with these dynamics, and then we can possibly achieve what has already been achieved in the Netherlands where the drug overdose rate is 85%(!!) lower than in the US, and that is with much more liberal Cannabis possession laws than in this country! Maybe it is time to give up "dogma" about Cannabis, and to start listening to the experts, if we really want to lower the alcohol/hard drug use in this country, and the accompanying dependencies and overdoses!

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