Occupying about 6,000 square feet in a North San Jose industrial park — about as much space as three average houses — Harborside Health Center is among the city’s largest “cannabis collectives.”

But Harborside would have to become five times as big to comply with a proposed new law requiring that medical marijuana providers grow all their product on-site. The City Council will consider the law on Tuesday.

“It’s not pragmatic or workable,” said James Anthony, an Oakland lawyer who represents several San Jose pot clubs.

Tuesday’s council meeting will mark another key milestone in San Jose’s two-year odyssey aimed at making medical marijuana a legal commodity. Among the key issues the council needs to decide:

Once approved, the proposed rules would mark San Jose’s first formal acceptance of medical marijuana businesses since the late 1990s, when the city allowed zoning for them after voters made California the first state to legalize medical marijuana.

For much of the past decade, however, San Jose was seen as hostile toward medical marijuana.

Those with doctors’ approval to use it had to go to Berkeley, San Francisco and Santa Cruz to buy the drug from dispensaries tolerated by those cities.

Two years ago, Councilman Pierluigi Oliverio revived the idea of regulating the clubs in San Jose. And last year he sponsored a successful city ballot measure to tax the collectives.

That 7 percent tax has generated $1.6 million since the city started collecting it in March, with anywhere from 64 to 79 collectives making the payments each month.

But taxing collectives — the city demands payment regardless of the clubs’ legal status — is easier than figuring out how to regulate them amid the fog of conflicting state and federal laws.

California’s medical marijuana law is among the most permissive in the country, allowing doctors to recommend the drug for just about anything — from mild depression to terminal illness — and leaving it unclear how marijuana may be distributed to patients.

Medical marijuana is illegal under federal law. But President Barack Obama’s Justice Department signaled two years ago that federal drug agents wouldn’t bust pot clubs operating within state law, inspiring scores of new storefront dispensaries to open in California and other states where medical pot is legal. More recent Justice Department missives, however, have narrowed what federal authorities might tolerate.

None of San Jose’s 100-plus collectives satisfy current city law, despite efforts by many of them to cooperate with city officials. But a few have thumbed their noses at the city, refusing to pay the marijuana tax and arguing that state medical marijuana law trumps local regulations.

Of all the decisions facing the council, the collectives’ biggest concern is the requirement for on-site cultivation, something they call a “poison pill” that could kill the whole program.

City officials say on-site cultivation is needed to ensure that collectives aren’t buying weed on the black market from drug cartels — and that what they are distributing as “medicine” with city approval isn’t tainted with pesticides and other harmful impurities.

But the pot clubs argue that growing enough marijuana on-site to meet the demands of the market, particularly if the city allows only 10 collectives, would require huge, 30,000-square-foot indoor marijuana farms consuming massive amounts of electricity.

The collectives note that the U.S. Justice Department, in a June 29 memo, specifically stated that it would prosecute “large-scale, privately operated industrial marijuana cultivation centers” — precisely what the 10 collectives could become.

Oliverio suggested as a compromise to ease the on-site growing requirement, and that the city allow each collective to have one off-site growing house within the city as well.

“It has exactly the same problem,” Anthony said in response. “It’s provocative to the federal government.”

Contact John Woolfolk at 408-975-9346.