Former construction industry executive Jeff Wilcox has a $20 million bet riding on the future of marijuana commercialization in California. That is what his AgraMed Inc. venture has invested in a warehouse near the Oakland waterfront and a bid to open a "business park for the cannabis industry." He hopes to lease the space to pot growers, bakeries, labs and processing facilities and to create hundreds of well-paying jobs. But Wilcox is in limbo after Oakland officials last week suspended a plan to issue four licenses for factory-scale production of medical marijuana. Wilcox is only the most pronounced of numerous suitors for the coveted permits who suddenly have cause to worry.

Oakland City Council members approved the unprecedented plan to tax and license the industrialization of marijuana in July. At the time, Oakland was preening as the political epicentre for a California initiative seeking to legalize pot as a leisure activity and sanction a marijuana market extending far beyond medical use. But Proposition 19, defeated by voters Nov. 2, drew the ire of U.S. Attorney General Eric Holder, who proclaimed the federal government wasn't going to tolerate retail pot sales in California. Oakland's ambitious cultivation plan designed to service the existing medical pot economy and potential recreational use also drew the suspicion of federal agents, who contacted the city.

Now, the process is on hold amid fears of government raids and warnings that Oakland's bold pot plan may violate California laws mandating that medical marijuana businesses operate as nonprofits. In a Dec. 6 letter to Jean Quan, Oakland's incoming mayor, Alameda County District Attorney Nancy O’Malley, warned that the city ordinance offered no "legal or equitable defence" against criminal prosecution of pot factories opening in town. City Attorney John Russo said he was contacted in October and again in November by U.S. Justice Department officials "expressing concern" over the city's plans. Oakland hoped to cash in on a 5 percent local tax on proceeds from the future pot factories that voters approved in November and a 10 percent tax on recreational sales if California voters passed Proposition 19.