A Denver-Based Firm Is Using Huge Diesel Generators to Grow Cannabis in East Oakland. Now the City Is Trying to Shut Them Down

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he city of Oakland is warning the Colorado owners of a major cannabis production complex in East Oakland that they may face significant fines and criminal charges if they don’t quickly remove unpermitted diesel generators that have been running around the clock for more than a year to power the facility’s operations.

But with the city’s previous warnings to the company apparently going unheeded, frustrated residents of a historic live/work building that’s part of the cannabis complex are threatening to take action themselves to shut down the generators.

Residents of The Cannery building have raised alarms for the past 20 months about the industrial generators and the pollution they’re emitting in a part of Oakland that has long suffered from hazardous air quality due to proximity to Interstate 880 and factories in the area.

So far, the city has been unable to curb repeated building and fire code violations by Denver-based Green Sage, the firm that owns The Cannery and an adjacent building called The Tinnery.

The notice sent Monday to Green Sage and its owners — Ken Greer, 41, a former Massachusetts stockbroker, and Bruce Miller, 70, a real-estate agent with addresses in Los Angeles and Wyoming — gives the firm 30 days to stop using the seven generators currently operating at the San Leandro Street complex.

The threatened prosecution and other sanctions would add to the legal challenges facing Green Sage, whose Oakland operations have been entangled in more than two dozen lawsuits in state and federal courts in California, Colorado and Virginia.

Oakland City Councilmember Loren Taylor, who represents the district that includes the Green Sage properties, says the situation shows the city needs to move faster and have better enforcement mechanisms in place when confronted by “out of bounds” cannabis operators.

“While I am grateful that this notice of violation has been issued with clear timeframes for required remediation and clarity around the penalties for insufficient response, this is an example of how our system works too slowly for the needs of tenants who are forced to deal with unbearable conditions on a daily basis,” Taylor said in an email statement.

The company began installing generators at the complex in July 2020 after a PG&E transformer serving the buildings failed and a power line caught fire — apparently because of a sharp increase in power demand related to the cannabis operations. As many as nine generators have operated simultaneously at the site since then, with seven on site now.

The city alleges several violations of the state fire code and city ordinances, including operating the generators, using and storing diesel fuel without permits and exposing workers and residents at the complex to diesel fumes that pose “a grave risk to health and safety.”

The Monday notice says failure to stop using the generators by April 22 could result in the company having its property declared a public nuisance and being fined as much as $1,000 a day. The city also warned Green Sage that if it doesn’t comply, it could be referred to the Alameda County District Attorney’s Office for criminal prosecution of the alleged fire code violations.

The notice included 20 images of conditions at the two Green Sage properties, including two huge diesel generators stationed adjacent to the soot-blackened facade of one of the buildings.

Green Sage did not respond to an email seeking comment on the violation notice. In past statements to KQED, Greer has said he and Miller are “avid environmentalists” and that the generators are necessary because PG&E is unable to supply enough power to the facility’s energy-intensive cannabis growing and processing operations.

PG&E disputes that assertion.

Green Sage paid $20 million in 2016 and 2017 to buy the two San Leandro Street properties — The Tinnery, at 5601 San Leandro St., and The Cannery, at 5733 San Leandro.

The Cannery was not just any big brick building waiting for an out-of-town entrepreneur to turn it into a weed factory. It was one of Oakland’s first live/work artists’ communities and the long-time home of the celebrated abstract expressionist painter Arthur Monroe. He became the building’s first artist-tenant in the mid-1970s and lived there until his death in 2019 at age 84.

Deteriorating living conditions at the building since Green Sage acquired it — including the 24/7 diesel emissions from the unpermitted generators — have reduced the number of tenants in its 20 residential units from 32 to 10 over the last two years.

Cannery resident Alistair Monroe — the son of painter Arthur Monroe — and former building manager James Dawson have been leading efforts to get the city to respond to the generators and say it’s past time for decisive official action.

That led them to send an emailed ultimatum earlier this week to city officials giving them until Thursday afternoon to have the generators shut down.

“We are done asking nicely and are now demanding that the generators be shut down,” the email from Monroe and Dawson said, warning they would join with community supporters to shut down the generators themselves if the city didn’t act.

In an interview, Monroe and Dawson said they might be able to do that by blocking tanker trucks that each day deliver the thousands of gallons of diesel fuel the generators need to keep running.

Monroe said that the ultimatum remains in place despite the city’s new violation notice to Green Sage.

“We have NO FAITH that letter will resolve any issues with Green Sage,” Monroe said in an email after the city sent the notice of violation.

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he threatened generator shutdown action follows years of efforts by Monroe, Dawson and other tenants to get the city’s attention about conditions at The Cannery.

They met with initial success when the City Council passed an ordinance in 2018 barring residential evictions in Oakland’s so-called “Green Zone,” a 10-mile-long, L-shaped strip on the edges of West and East Oakland designated for industrial cannabis operations.

The Cannery residents also have succeeded in getting the city to warn Green Sage and its cannabis tenants against expanding operations into vacated live/work spaces, which is prohibited by the 2018 measure.

They’ve had far less success getting action on the generators.

“We have been alerting the people who have the ability to do something about this for quite a long time,” Dawson said. “And I don’t know if it’s a bureaucratic process or what it is, but it’s just not stopping. Twenty months is a long time for this to go on sort of uninterrupted 24 hours a day.”

Until Monday’s notice of violation, residents’ complaints about the generators have led to several preliminary enforcement actions by both the city of Oakland and regional air regulators.

Michael Hunt, the Oakland Fire Department’s chief of staff, said in an email earlier this month that the generators should only have been used on a temporary basis and “were never meant for ongoing use.”

Typically, Hunt said, a generator would be approved and permitted for 90 days. He said temporary approval was granted after the July 2020 transformer failure “to ensure that the live/work tenants [at The Cannery] had power. … The generators were at no time permitted as a permanent power source.”

Now that residents are getting power from PG&E, “there is no justifiable need for the generators to be in use to keep power on in the live work units,” Hunt said. “The multiple unpermitted generators now are only augmenting the need for power to support the cannabis-related businesses.”

Green Sage also has come to the attention of the Bay Area Air Quality Management District. Last month the district filed its own notice of violation against the company for failing to obtain a permit to operate the generators. The notice prompted Green Sage to apply for an air district permit, but the agency said as of Monday that application remained incomplete.

In a recent interview at the site, Councilmember Taylor said he was “frankly upset that the warehouse owners have been using industrial diesel generators as a permanent power source.”

“Generators are intended to be temporary, while we’re bridging a gap, not to be a long-term fixture in the community polluting and pushing out the chemicals into the air,” Taylor said.

He said he’d expressed his concerns to city staff about ending the generators’ unpermitted use.

“That is something that we absolutely need to get on top of,” Taylor said. “We need to do more to ensure that it has stopped.”

Earlier attempts by city officials to address Green Sage code violations show just how hard it has been for them to get on top of the situation.

Last October, inspectors from three city agencies toured the Green Sage complex. That inspection, in turn, resulted in a Dec. 7 letter from city officials to Green Sage partners Greer and Miller. The missive noted the “collapsed” PG&E transformer, unpermitted electrical work and the installation of the diesel generators “without city-required inspections and permits.”

The letter said Greer and Miller would need to get both a Fire Department permit and sign-off from the city’s Bureau of Building “for interim use” of the generators.

The message closed by warning the Green Sage owners that “failure to work with the city and take meaningful corrective measures to bring the identified issues into code compliance will result in the city seeking any and all appropriate legal remedies including fines, criminal penalties, suspension or revocation of any operational or occupancy permits and removal of the generators.”

Hunt said inspectors returned to the company’s San Leandro Street properties in early January and “confirmed that state and local fire code violations were present and must be remedied.” But the generators have continued running nonstop.

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n response to emailed questions last month, Greer said the generators are necessary because PG&E isn’t supplying enough electricity for the power-intensive cannabis operations at the Green Sage buildings.

But PG&E says it’s been working with Green Sage to find power solutions.

“While we can’t get into specific customer account details for privacy reasons, PG&E has provided various options and recommended designs to meet the customer’s electric needs,” Tamar Sarkissian, a PG&E spokesperson, said in an emailed statement. “PG&E also has a capacity project in place to help support the growth of its customers in Oakland’s cannabis industry.”

Over the past year, Green Sage has said in a series of communications to tenants, city officials, regulators and KQED that it intends to install some form of clean-burning gas turbines to power their tenants’ cannabis operations.

“Given our current energy challenges, my mission is to help take the cannabis industry off-grid on methane gas from dairy farms, and develop a ground-breaking alternative,” Greer said in an email to KQED. “I am very driven to execute this solution so that other facilities around Oakland (and hopefully worldwide) can do the same.”

The regional air district says that while it has discussed with Green Sage the possibility of gas turbines being installed at its properties, the company has yet to file an application to do so.

But that hasn’t stopped Greer from claiming on social media that generators are already up and running at the San Leandro Street complex, which he calls “the largest indoor cannabis facility in California.” (Industry sources indicate California’s largest indoor pot facility — about five times larger than the Green Sage properties — is actually in the Riverside County city of Blythe.)

In his LinkedIn and Facebook profiles, Greer represents himself as founder and CEO of a company called New Grass Power LLC.

“New Grass Power is a renewable energy company that provides low-cost, reliable power to the largest indoor cannabis facility in California,” his profiles say. “We use turbines powered by renewable natural gas from dairy farms so our facilities can become carbon negative and go off-grid.”

However, there’s no evidence that New Grass Power is providing electricity in Oakland or anywhere else.

In fact, Greer made statements in a January court filing that contradict his online claims about New Grass Power and make it clear that installing diesel generators has been standard operating procedure at the San Leandro Street warehouses.

In a declaration filed as part of an eviction action, Greer described how Green Sage supplies electricity to its cannabis tenants.

“Defendants were advised at the time they signed the lease that plaintiff provides power to all tenant [sic] by renting diesel generators,” Greer wrote. “Upon request from a tenant, plaintiff orders a generator. Generators are only provided when a tenant is prepared to test installed cannabis grow equipment.”

Green Sage, which launched in 2014, says on its website that it aims to help “set the standard for transparency, integrity and accountability in the cannabis industry.” The reality has been more complicated.

Green Sage and its connected firms — it operates under the names of at least half a dozen different limited liability companies registered by Greer and Miller — have frequently found themselves the targets of lawsuits related to its Oakland business in state and federal courts in California, Colorado and Virginia.

The suits have included claims that Green Sage has illegally tried to force residential tenants out of The Cannery, that the firm has failed to live up to conditions in its leases with cannabis tenants and that it has failed to pay contractors for more than $3 million in work done at its San Leandro Street properties.

Green Sage has responded in court with blanket denials to all allegations.