Oakland has moved closer to becoming the first city in the United States to authorize wholesale pot cultivation.

A computer image of a marijuana growing operation envisioned by Gropech, one of the companies interested in running a city-licensed marijuana plantation in Oakland, Calif. (Gropech/Associated Press)The California city's council voted 5-2 with one abstention late Tuesday to license four operations where marijuana would be grown, packaged and processed.

The vote came after more than two hours of public comment, with speakers divided between those who opposed the measure —largely on the grounds that it could put small medical marijuana growers out of business — and those who said it would generate millions of dollars in taxes and sales, and would create hundreds of jobs.

The plantations would not be limited in size — one potential applicant for a licence intends to produce over 9,525 kilograms of pot a year — but they would be heavily taxed and regulated.

Those vying for one of the four licences would have to pay $211,000 US in annual permit fees, carry $2 million worth of liability insurance and be prepared to devote up to eight per cent of gross sales to city taxes.

High hopes

'Do you want to be the Silicon Valley of cannabis?' —Jeff Wilcox, proposing a commercial grow-op

Proponents of the measure touted the possibility of Oakland becoming the U.S. cannabis capital, especially if California voters approve the legalization of recreational marijuana in November.

"Do you want to be the Silicon Valley of cannabis?" said Jeff Wilcox, a local businessman who proposes to build AgraMed, a three-hectare plant with a bakery, a lab and 9,300 square metres of cultivation space.

But Stephen DeAngelo, executive director of Harborside Health Center, the largest medical marijuana dispensary in the world, said small growers were terrified that the ordinance would mean the end of their livelihoods.

One of the co-sponsors of the council initiative, Rebecca Kaplan, said it would not take effect until January, allowing time to come up with a plan for medium-sized growers.

Councilwoman Nancy Nadel said she worried about the quality of the product, wanted environmental protections and questioned why council was voting on the measure now if it wasn't going to take effect until January.

The measure will go before council members one more time for a final vote, but the outcome isn't expected to change.