The warning in a letter from U.S. Attorney Melinda Haag offered the first clear signal that the Justice Department would not tolerate even city-sanctioned growing operations, despite the Obama administration's hands-off approach to states that have legalized medical marijuana.
"The department is concerned about the Oakland ordinance's creation of a licensing scheme that permits large-scale industrial marijuana cultivation and manufacturing as it authorizes conduct contrary to federal law," Haag wrote in the letter to Oakland City Attorney John Russo dated Tuesday.
Russo spokesman Alex Katz declined to comment on Haag's letter but said Russo was planning to draft amendments to Oakland's medical marijuana regulations to address cultivation issues. Those would likely be brought before the council in the next few weeks, he said.
The Oakland City Council had asked Russo to seek guidance from federal authorities, even as the council in December put the application process for growers' licenses on hold following a warning from the Alameda County district attorney that the city's ordinance also likely violated state law.
In July, Oakland became the first city in the country to authorize the licensing of marijuana cultivation operations. Until Haag's letter, federal law enforcement officials had kept quiet about what might happen if the city actually went through with its plan.
Haag's letter acknowledges an October 2009 Justice Department memo instructing federal prosecutors to avoid going after patients complying with state laws regarding the medical use of marijuana.
Since then, California has seen a drop in raids on medical marijuana dispensaries compared with the Bush administration years.
But Haag wrote that her office will vigorously enforce federal anti-drug laws against illegal manufacturing and distribution of marijuana, "even if such activities are permitted under state law."
She warned that not only operators of marijuana farms but also landlords, property owners, financiers and others could face prosecution and the loss of property for growing marijuana under Oakland's law.
A revised measure brought before the Oakland City Council this week sought to bring the city's cultivation plans into compliance with state law by tying each farm to an individual pot dispensary.
California's landmark 1996 medical marijuana law allows users only to grow pot for themselves or obtain it from a designated primary caregiver. Hundreds of pot dispensaries throughout the state have operated largely free from interference from authorities by having users designate the dispensary as their primary caregiver.
Alameda County District Attorney Nancy O'Malley said in her December warning to the council that she doubted whether the farms, as conceived under Oakland's original ordinance, could qualify as primary caregivers. She also warned that even councilmembers might face criminal prosecution if the farms were allowed to open.