What can we tax next? How about marijuana?

Governments around the world have tried to clamp down on medical marijuana but one Californian city has taken a different approach: if you can't beat 'em, 'tax em.

After becoming the first US city to impose a special tax on medical marijuana dispensaries, Oakland could soon become the first to sanction and tax commercial cannabis-growing operations.

Selling and growing marijuana remains illegal under US federal law.

Two Oakland council members are preparing legislation, expected to be introduced next month, that would allow at least three industrial-scale growing operations.

One of the authors, councillor Larry Reid, said the proposal is more of an effort to bring in money than an endorsement of legalising marijuana use - although the council has unanimously supported that, too.

The city is facing a 42 million dollar budget shortfall. The tax that voters approved last summer on the four medical marijuana clubs allowed under Oakland law is expected to contribute a million dollars to its coffers in the first year.

A tax on growers' sales to the clubs could bring in substantially more, he said.

Mr Reid said: "Looking at the economic analysis, we will generate a considerable amount of additional revenues, and that will certainly help us weather the hard economic times that all urban areas are having to deal with."

A report prepared for AgraMed, one of the companies planning to seek a grower's licence, said its proposed 100,000 sq ft project near the Oakland Coliseum would produce more than two million dollars in city taxes each year.

The marijuana nurseries under consideration would have more in common with factories than rural cannabis farms.

Dhar Mann, founder of an Oakland hydroponics equipment store called iGrow, and Derek Peterson, a former stockbroker who now sells luxury trailers outfitted for growing cannabis as a co-founder of GrowOp Enterprises, have hired an architect to draft plans for two warehouses where marijuana would be grown and processed year-round.

Their vision includes using lights, trays and other equipment manufactured by iGrow and creating an online system that would allow medical marijuana dispensaries to see what cannabis strains are in stock, place orders and track deliveries.

Mr Mann said: "We are emulating the wine industry, but instead of 'from grape to bottle,' it's 'from plant to pipe'."

The pair say they intend to operate the marijuana-growing business they have dubbed GROPECH - Grass Roots of Oakland Philanthropic and Economic Coalition for Humanity - as a not-for-profit organisation. They anticipate gross sales reaching 70 million dollars a year.

After paying their expenses, they would funnel the money to local charities through a competitive grant process.

The discussion in Oakland comes amid a statewide campaign to make California the first state to legalise the recreational use of marijuana and to authorise cities to sell and tax sales to adults.

Supporters say licensed growers would create hundreds of well-paying jobs.

The local branch of the United Food and Commercial Workers union has already signed up about 100 medical marijuana workers, and the growers are expected to have union shops as well, said Dan Rush, special operations director of UFCW Local 5.

Allowing medical marijuana to be grown openly could also give patients a better idea of where their pot is coming from. Many growers hide their identities to avoid federal prosecution.

Oakland has already developed a reputation as one of the US's most pot-friendly cities.

Self-described "guru of ganja" Ed Rosenthal, a popular writer of cannabis-growing how-to books, lived in Oakland for 25 years before moving recently to a more affluent borough nearby. He credits the city's positive attitude toward marijuana to a critical mass of activists who have flocked there since the 1970s.

"The whole population of Oakland is just very progressive," Mr Rosenthal said. "It's the radicals who couldn't afford Berkeley or San Francisco who all moved to Oakland."