Real estate agent Donald Morash Jr. fields several calls a day in his Warwick office from people looking for warehouses to grow pot.

The callers aren’t just from Rhode Island. “They’re from Connecticut, Massachusetts, Florida, Maine, Colorado .... My guess is all these people are anticipating legalization here.” They think “it’s going to be a slam-dunk.”

Morash calls what’s happening “another California gold rush. But it’s not gold and it’s not oil, it’s marijuana.”

The rush for indoor grow locations has prompted bidding wars for warehouses and the doubling of lease rates, real estate agents and growers say.

But all the pot speculation — and the resulting backlash from law enforcement and some local leaders — is complicating things for Norman Birenbaum, the top regulator of the state’s decade-old medical marijuana program.

While Smith Hill lawmakers consider whether Rhode Island should join Massachusetts and Maine in legalizing pot, Birenbaum must get a new group of commercial growers, called “cultivators,” up and running to supply the existing and expanding medical marijuana market.

They, too, need warehouse space for marijuana grows. And the possibility of recreational marijuana being approved is making some municipal leaders leery.

Where in the past municipalities might have allowed a handful of large-scale medical marijuana "grows," they worry now about those operations evolving into neighborhood recreational pot shops.

That leaves Birenbaum in a peculiar position: Trying to sell local leaders that the tightened enforcement of the medical marijuana program will keep things in check, while also acknowledging locals can restrict grows through zoning.

Birenbaum worries: “If every single town zoned it out … we’d have a huge shortage" of marijuana for patients.

And a huge black-market problem, he says, because the demand for marijuana for medical purposes “is astronomical.”

Local opposition

At least seven municipalities — North Kingstown, Narragansett, Exeter, West Greenwich, Bristol, Foster and Glocester — are on record as opposing legalized marijuana.

Each has passed a boilerplate resolution, drafted by the state's chief opponent, Attorney General Peter F. Kilmartin, that urges the General Assembly to vote ‘no.’

Further, the North Kingstown Town Council is considering a zoning change that would add another restriction on commercial medical marijuana grows: not within 400 feet of a house.

Cities and towns, however, can’t eliminate marijuana altogether. The state’s 17,220 medical marijuana patients can grow up to 12 plants each in their homes.

And if the state legalizes recreational marijuana under the current bill, communities could ban recreational marijuana businesses only by voter referendum.

Still, some council members in North Kingstown are considering some kind of town surcharge on cultivators to reap more revenue.

“They’ve talked about it,” says Town Clerk Jeannette Alyward, “because the state is getting all this money” by taxing cultivators, including licensing fees of up to $35,000 a year.

'Prohibition didn't work'

The allure of potential revenue from pot — be it for medical or recreational purposes — has caught the attention of other communities.

West Warwick and Pawtucket have been more receptive to commercial medical marijuana cultivators.

In Pawtucket, Director of Administration Tony Pires says the city is in no position to summarily dismiss marijuana’s potential economic benefits.

“When you’re a community like ours that has its financial challenges,” says Pires, “we didn’t want to miss out on any opportunities that it might present to our taxpayers.”

“There’s a tendency for this ‘not in my backyard' syndrome.… But Prohibition didn’t work. It is what it is. We’re going to have to deal with it in an intelligent and public manner.”

The city has put together a task force to aid decision makers of the pros and cons of recreational marijuana if legalization happens.

“If that day comes, we're going to be in the position to hit the ground running,” Pires says. “These are taxpaying citizens, and we need to make a determination as to whether or not that economic opportunity is going to be available here.”

Local support

In West Warwick, the Town Council recently came to the aid of three existing medical grow businesses now seeking state approval to become registered cultivators for the state’s dispensaries.

The West Warwick grow operators, working with the state, had made substantial investments in their properties. But their properties didn’t meet the town’s new zoning regulations for marijuana growing.

For instance, one grower is in a business district; new town regulations say they must be in commercial or industrial zones. At least one other didn’t meet new setback requirements.

The town is requiring cultivators to be at least 1,000 feet from a church, school, park, playground, “or where groups of minors regularly congregate,” and at least 500 feet from a residential district.

Town Manager Mark Carruolo says all three cultivation applicants “were working through the process and doing things properly, and we didn’t want to penalize those individuals.”

West Warwick has since given local approval to two more cultivation applicants, Most of the grows are in the town’s old mills.

Next door in Warwick — where 10 of 16 cultivation applicants with preliminary state approval or full licenses are located — the city is working on new zoning ordinances.

Mayor Scott Avedisian says his concern “is all about public safety,” noting the city once had an application for a dispensary that included a drive-through window.

“We need to make sure we are protecting our people in our neighborhoods and our schools,” the mayor says.

It's no panacea

While there is money to be made for communities in marijuana, the amounts that could be raised will hardly fix any government’s budget problems.

With legalization — and a 30-percent tax — Rhode Island could see $48.3 million in revenue in 2020, advocates say.

But that’s less than 1 percent of Gov. Gina Raimondo’s $9.25-billion budget plan for 2018.

Providence has called on lawmakers to allow cities and towns to impose a local sales tax on recreational marijuana sales — above the proposed 30-percent statewide tax rate.

In Colorado, the first state to legalize marijuana, marijuana sales topped $1.3 billion in 2016. But the state still faces budget problems. The Denver Post reported in March that the state is facing a $260-million deficit this year.

State is tracking

On a recent Friday afternoon in his state business regulation office in Cranston, Birenbaum welcomed visitors from Pawtucket’s marijuana task force, a group weighing whether the city should allow medical marijuana cultivators.

Birenbaum touted the state’s camera surveillance system, which keeps electric eyes on all the grows, and various other tracking and security measures.

While the attorney general may have legitimate concerns about future recreational use, Birenbaum says, “we want cities and towns to see there’s a difference” with a well-regulated medical marijuana program.

Weeks after the tour, Pawtucket gave local approval for three medical cultivation applicants, noting how impressed they were with the state’s ability to track grows and the pot they produced.

Some rents double

Realtor Morash, who owns Abbott Properties, on Jefferson Boulevard, says the competition for warehouse space has doubled the square-foot rent in some cases.

“It used to be $5 to $7 [per square foot] and it’s been heading up to $10 or $11 in some cases,” he says. “It all depends on the size. Bigger the building, less per foot.”

While higher rents are ostensibly good news for property owners, Morash says he tells them they are operating at their own peril because it’s not clear who will get cultivation licenses from the state.

Someone who agrees to lease a warehouse today might be out of the business in a few months if they don’t get approval. So many lease agreements have “kick-out” clauses that allow a grower to walk away if they don’t get a license.

An Exeter property Morash had listed early last week as "approved for cultivation" was under agreement by Friday. Yes, for marijuana growing.

Morash says when someone inquires about warehouses for lease he tells them what he has listed, but that's it. “I don’t even bother to offer to look for them [with other agents] because I know they’re just going to hang up from me and call the next guy."

The really hot callers, he says, ask to be put on a list of willing tenants, but Morash doesn’t bother keeping one:

“I get calls every day. I don’t have to look for anybody.”