OCEANSIDE — The city has agreed to allow a South Morro Hills hemp grower to transition to cultivating cannabis instead, a shift local operators say reflects the rapidly changing economics of California’s hemp industry.
While hemp and cannabis come from the same plant family and often look and smell alike, the distinction lies in their THC content. Hemp is legally defined as cannabis containing no more than 0.3% THC, the psychoactive compound that produces a high, while cannabis contains higher concentrations.
South Morro Hills 47, LLC applied last year for a conditional use permit to grow cannabis at 1319 Sleeping Indian Road. The business already held a local cannabis cultivation license since 2019, but needed the permit to begin cannabis operations.
The Oceanside City Council unanimously approved the permit on May 20, two months after the Oceanside Planning Commission also granted unanimous approval.
The transition marks a major change for one of Southern California’s remaining hemp growers.
Duane DeLarco, chief operating officer for South Morro Hills 47, said the company’s hemp business became increasingly difficult after Gov. Gavin Newsom issued an emergency ban on intoxicating hemp products. Since then, he said, the business has largely been limited to selling to out-of-state growers.
“There is no local benefit to continuing to sell hemp,” DeLarco said, noting that cannabis cultivation would instead generate local tax revenue for Oceanside.
City Manager Jonathan Borrego said city staff is currently drafting a spending plan for the city’s cannabis tax revenue. So far, all revenue collected from the tax has been directed into the general fund.
Cannabis will be cultivated within the property’s 25 existing hoop houses previously used for hemp cultivation.
Hoop houses are plastic-covered, unheated growing structures that protect plants from the elements and allow growers to extend the growing season.
All cultivation will take place indoors using a mix of artificial and natural light. The operation is expected to employ up to eight workers and maintain a 24-hour armed security guard on site.
A double-layer fence will also surround the property, along with 16 360-degree surveillance cameras mounted along the fence line and one camera installed on each hoop house.
Odor is not expected to be a major issue because no outdoor cultivation is planned. All cannabis cultivation will occur within a negative-pressure system equipped with carbon scrubbers and fans fitted with exterior misting bars. If additional odor control becomes necessary, neutralizers can be added to the wall evaporative cooling system.
The cannabis crop will occupy a 1.88-acre portion of the larger 78.61-acre property, which hosts a range of agricultural operations in South Morro Hills, Oceanside’s agricultural region.
The property has been used for farming since the 1960s, and the Campbell family has owned the site since 1994. South Morro Hills 47, in its 25-year lease agreement with Campbell Farms, pledged that the land would remain designated for agricultural use.
Public access to the site is prohibited. The business can only sell its products to licensed cannabis distributors, DeLarco said.
DeLarco also said neighboring property owners supported the switch from hemp to cannabis cultivation, though not everyone at the City Council meeting agreed.
Rachel White, who lives near Frazee Road and College Boulevard, argued the project could attract crime.
“I think it’s a bad idea,” she said.
Others spoke in support of cannabis.
Edward Fitzpatrick said a cannabis oil product helped prolong his wife’s life during her battle with leukemia.
“It has very beneficial properties,” he said.
Jimmy Knott urged the city to explore limiting THC levels in cannabis grown locally, noting that cannabis today contains significantly higher THC concentrations than it did decades ago.
