OCEANSIDE — The city has approved a permit allowing its only non-storefront cannabis dispensary, MedLeaf, to operate as a microbusiness, expanding its services to include manufacturing and distribution alongside its existing delivery-only retail operations.
MedLeaf, located at 2935 San Luis Rey Road, applied for two conditional use permits and a location waiver to add the new services to its 4,800-square-foot facility.
Cannabis microbusinesses, as defined by the California Department of Cannabis Control, must conduct at least three activities — such as small-scale cultivation, manufacturing, distribution, or retail — at a single location.
City Planner Dane Thompson likened a cannabis microbusiness to “the industry’s equivalent to a craft brewery.”
According to city staff, MedLeaf’s planned manufacturing activities will focus on infusing cannabis extract or plant material with other ingredients to create branded products. Distribution will involve transporting goods between businesses, including state-mandated laboratory testing.
MedLeaf co-owner Karen Tomlinson emphasized that no physical expansion of the building or extraction equipment is planned, and the facility will remain closed to the public.
“It’s been an uphill battle,” Tomlinson said. “We had a lot of competition; we’ve had to overcome a lot of speedbumps.”
MedLeaf has operated under Oceanside’s delivery-only policy for nearly five years, facing stiff competition from storefront dispensaries in neighboring Vista and Encinitas, which also offer competitive delivery services.
Tomlinson noted that the expansion would provide much-needed revenue to support the company’s 35 employees, who currently struggle to maintain full-time hours due to competitive pressures. She added that cross-training employees in manufacturing and distribution would enhance their skills within the cannabis industry.
The council unanimously approved MedLeaf’s permits and waiver on Jan. 8.
Mayor Esther Sanchez requested that city staff present a discussion item at this year’s budget workshop to address how the city plans to utilize tax revenue generated from cannabis businesses.