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Learn more about the history, current regulations, and overall status of licensed cannabis in Oceanside, California. We also will be explaining issues and areas of improvement that will help secure the long-term viability of licensed cannabis, support the local economy and ensure reasonable access to commerical cannabis.

Since 1992, cannabis dispensaries have been prohibited in Oceanside per City zoning regulations. But hanks to the extensive education and lobbing efforts of a dedicated group of local cannabis activists, the subject of cannabis access in Oceanside kept emerging, was voted on numerous times, and was finally, in limited form, licensed as outlined in the history below.

In Oceanside, Proposition 64 received 39,952 votes in favor, for a passing rate of 56.87%, and today’s campaign for both medical and adult-use access in Oceanside is led by Oceanside for a Safer Community, a pro-cannabis group that recently had to suspend signature gathering for its November 2020 ballot initiative due to the Covid-19 crisis.

Patient Advocates Support Licensed Cannabis

Licensed cannabis has strong support among patient advocates who should not be denied local access to cannabis, which was declared an essential service by Governor Gavin Newsom in not one, but two categories: Essential Retail Medical Goods and Supplies, and Health Manufacturing/Pharmaceutical manufacturing.

Unfortunately, Oceanside, like many other cities that have approved at least some commercial cannabis is struggling with a number of issues on the path to a licensed market.

Issues in Oceanside to Question:

  • Zoning Changes – What zoning changes are needed to ensure sufficient consumer access and eradicate the illicit market?
  • Limitations of Medical-Only – Has medical-only licensing limited the ability of Oceanside manufacturers and distributors to compete in the licensed market?
  • Preserve Agricultural Heritage – Local farmers see commercial cannabis as something that can save struggling farms and preserve the agricultural heritage of Oceanside. How much and what types of cultivation are needed to ensure this?

 

This article will explain the history of cannabis in Oceanside and dive into more of the regulations information so you can understand how far along the program is in the process. We’ve also created a description of each of the 3 issues that we currently see with the cannabis regulations in Oceanside, CA.

 

Interview with Oceanside City Council Candidates

The Cannabis Roundtable & Election Series is hosted by Blue Water Government Affairs, along with partners Cannabis Real Estate Consultants and the Coastal Pacific PAC, to present a series of webinars on local policy makers who support the future of cannabis legislation in San Diego. Learn more below in these videos.

Featuring Guest Speakers:

These videos offers a unique look at the top candidates and officials leading the way to significant progress for the cannabis industry.

 

History of Cannabis Legalization in Oceanside

In January of 2016, the Oceanside City Council voted to ban cultivation and delivery in Oceanside but instructed staff to return to Council with options for delivery within the City which subsequently passed in March 2016.

After extensive lobbying by local cannabis activists, the Oceanside Medical Marijuana Ad Hoc Committee was created and included local politicians, cannabis professionals and patient advocates. After a series of community meetings, on April 11, 2018, City Council adopted Ordinance 18-OR0199-1 to allow the establishment and operation of medicinal cultivation, testing, manufacturing, distribution, and delivery services but prohibiting dispensaries.

The April 11 Ordinance was followed on May 23rd by a resolution establishing fees for the processing of Cannabis Regulatory License applications and on August 8, 2018, by Ordinance 18-OR0399-1 that eliminated the 22,000-square-foot maximum cultivation size and the 1,000-foot buffer between cultivation and nursery facilities.

On September 5, 2018, Council adopted Ordinance 18-OR0449-1 allowing for a maximum of two Type-9 non-storefront dispensaries.

The application period for the first Oceanside licenses was from June 25, 2018, to October 1, 2018, and the City received 27 applications, comprising 17 cultivation, five distribution and five manufacturing applications. After a multistage scoring and interview process, staff recommended the top five scoring cultivation applicants be licensed as well as three manufacturing/distribution applications. The City Manager approved staff recommendations on April 9, 2019.

Round two of the application process took place from October 2, 2018, through December 3, 2018. The City received seven applications: four for Type-9 non-storefront dispensaries; two for manufacturing and one for distribution. The two top-scoring dispensary applicants were recommended for licensing by staff along with the single manufacturing applicant who scored above the testing threshold. The City Manager approved staff recommendations on May 5, 2019.

 

Morro Hills Agriculutral Area, Oceanside, CA

 

Cannabis Retail Sales in Oceanside

Cannabis Delivery TruckTwo local Type 9 applications have been approved, and one has been placed on the qualified waitlist should a license become available. The limit has been reached for retail licenses and no more licenses will be issued.

Dispensaries are the retail arm of the cannabis industry, where the direct-to-consumer sale of cannabis, cannabis products, and accessories happens. In Oceanside, there will be two Type-9 dispensaries, which are non-storefront retailers whose state licenses allow for the sale of cannabis goods by delivery only. A physical location is required for this license type, and it must be located in an industrial zone. There will be no in-person, storefront cannabis sales in Oceanside unless changes are made to Ordinance 18-OR0449-1.

 

Cannabis Production in Oceanside

The next application round, for Medical-only Distribution, Manufacturing, and Testing will be held from August 17, 2020, through October 1, 2020.

The City has issued ten cultivation licenses and two nursery licenses to applicants from the first application period. The limit of 12 cultivation licenses has been reached, so no further licenses for cultivation will be issued in Oceanside. On June 24, 2020, the Oceanside City Council voted to add recreational cultivation to the list of approved cannabis business types, but that is for cultivation only; manufacturing, distribution, and retail sales will remain medical-only. While 12 licenses have been approved, only five Conditional Use Permits have been processed so far.

There are an unlimited number of manufacturing, distribution, and testing licenses available in Oceanside, but few applications have been approved or even submitted compared to the other license types. Excessive zoning restrictions have limited the suitable properties available, artificially inflated the prices of those properties, and effectively limited the employment and tax revenue generating potential of this license type in Oceanside.

 

The Issues – Consumer Access

Oceanside approved two Type-9 retail licenses in 2018, or delivery-only retail. Consumers who want to visit a dispensary to learn about the products available, how they are manufactured and used, or simply have a more personal shopping experience must travel outside the City of Oceanside to do so. This places an undue burden on Oceanside residents and reduces local tax revenue.

We must ask ourselves, “what is the appropriate number of cannabis retailers for a city of almost 200,00?” A quick search at the California Department of Alcohol Beverage Control found that there are over 100 Active Active Off-Sale Retail Licenses in the City of Oceanside for alcohol. Active Off-Sale is the alcohol license type closest to cannabis retail licenses and represents only one of at least four alcohol license types available.

Per California State law the density of off-sale alcohol licenses is one outlet per every 2,500 residents. With only two retail licenses, Oceanside’s cannabis retailer density is one per every 88,000 residents.

To ensure fair access for all consumers in Oceanside, the City must address the fact that there is insufficient access to this essential service. Especially while we are still under stay-at-home orders, it is critical that cannabis be available locally to residents in all parts of the city.

 

The Issues – Tax Shortfall

It is an undisputed fact that cannabis tax revenue in California has fallen far short of the projections that were made in the lead up to the Prop 64 vote in November 2016. And it has been widely reported that the majority of cannabis sales in California take place in the unlicensed or illicit market. Reporting on the size of the illicit market varies, but everyone agrees that it is large and thriving. Localities must take on the challenge of eliminating the unlicensed market if they hope to realize the full potential of cannabis revenue, which is even more important now that we are facing enormous budget deficits.

To do this, store-front, or in-person, retail cannabis sales must be allowed or consumers will simply shop in nearby towns or continue to visit unlicensed shops. Due to the unprecedented financial crisis created by Covid-19, Oceanside’s 2020-21 budget approved on June 3, 2020, reflected a $8.65 million drop in projected tax revenue. With over 57% of Oceanside voters having voted for licensed cannabis, it seems foolish to continue to hinder employment and tax-generating licensed cannabis businesses.

 

The Issues – Preserving Oceanside’s Agricultural History

Agriculture has been an integral part of the Oceanside community and economy for decades. Yet in recent years, traditional farming in North County has been beset by residential and commercial development and escalating costs for both labor and water. Many farmers in Oceanside believe that being able to grow cannabis on even a small portion of their lands will help support their traditional crops and the long-term sustainability of farming in Oceanside.

As we discussed above, the City has already issued 10 cultivation licenses and two nursery licenses, which are medical only, and no further licenses will be issued as the maximum has been reached. Just a few weeks ago, on June 24, 2020, the City Council voted 4-1 to add recreational cultivation in Oceanside, though that does not address the matter fully, and more cultivation licenses are needed. While the City’s 10 cultivators can now sell into the much larger recreational market in California, manufacturers, distributors, and retailers are still limited to the medical market only, which has shrunk in every state that has both adult-use and medical markets.

 

Learn more about San Diego recreational cannabis laws and history.