The 4-year-old cannabis delivery business MedLeaf, Inc., on San Luis Rey Road will add manufacturing and distribution activities under permits approved Wednesday by the Oceanside City Council.

MedLeaf occupies a 4,800-square-foot building formerly used for 25 years by a general contractor in an industrial park near the municipal airport. It was the city’s first legal dispensary to open after the City Council adopted an ordinance on April 11, 2018, to allow some medical-related cannabis businesses.

The long-term intention is for MedLeaf to become “a cannabis version of a craft brewery,” said Dane Thompson, an associate planner for the city.

So far, the city has no storefront retail sales of cannabis products. However, in November 2023, the City Council agreed to allow up to three on-site sales licenses, including one for MedLeaf that has not yet been authorized. The city is still evaluating applicants for all three licenses.

“We employ 35 people who barely get 32 hours a week,” co-owner Karen Tomlinson told the City Council. The additional activities will help the business compete with others in North County, and will bring more work for employees and tax revenue for the city.

Since 2018, Oceanside’s City Council has taken a number of steps to authorize various types of cannabis businesses.

The council removed the medical-only restriction in 2020 to allow adult-use cultivation and nurseries. Also that year, it approved a schedule of tax rates for various types of cannabis businesses.

Cannabis businesses are allowed only in limited business and industrial zones, and not in the downtown commercial district.

In addition to the two conditional-use permits, the council approved a locational waiver for MedLeaf.

The business is 180 feet from another cannabis business and 130 from the nearest homes, despite the city’s requirement of a 1,000-foot minimum. City staffers supported the waiver because they found no negative effects from the location.

At last count, Oceanside had issued 22 cannabis licenses in various categories from cultivation to distribution, but only five of the licenses were active.

Mayor Esther Sanchez asked the city staff staff to prepare a presentation to the council for later this year on how much tax revenue the city has collected from cannabis businesses so far.