Oceanside Planning Commission backs shift from hemp to cannabis in South Morro Hills
The Oceanside Planning Commission voted unanimously on April 23 to recommend that the City Council approve a conditional use permit allowing South Morro Hills 47, LLC to convert 25 existing hoop houses from industrial hemp production to cannabis cultivation. The site, located in the 1300 block of Sleeping Indian Road in the northeastern hills of Oceanside, has been used for hemp growing for the past two years under a city‑issued merit‑based license granted on September 1, 2019.
Economic and agricultural context
South Morro Hills has long been a hub for commercial flower, tomato, avocado and citrus farms. In recent years, local growers have faced rising water and labor costs, intensified competition from overseas producers, and pressure from expanding urban development. These challenges have made traditional agriculture less viable for many families in the area.
Proponents argue that cannabis could provide a new revenue stream while preserving the agricultural character of the hills. Under Measure M, approved by Oceanside voters in 2020, the city will collect a 1.5 % tax on gross receipts from cannabis cultivators. Other cannabis‑related activities—such as manufacturing, nurseries, distribution and retail—are taxed at rates up to 5 % of gross receipts, offering the municipality a potentially significant source of funding for public services.
Details of the proposed cultivation facility
The plan calls for the use of 25 hoop houses, each measuring 30 feet wide, 58 feet long and 17.5 feet tall. The structures will be equipped with temperature controls, filtered exhaust fans and supplemental solar‑powered LED lights. To contain odors, the hoop houses will be sealed to create negative air pressure, and the facility will feature:
- A double‑layer security fence with no public access.
- 24‑hour on‑site security personnel.
- 360‑degree security cameras feeding live video to the Oceanside Police Department.
South Morro Hills 47, LLC expects to employ six to eight workers on regular agricultural shifts. The company’s chief operating officer, Duane DeLarco, noted that the transition builds on existing infrastructure and expertise gained from two years of hemp cultivation.
Community and official perspectives
Planning Commission Chair Tom Morrissey described the proposal as a natural evolution of land use: “It may be a new sort of use out there, a new type of crop, … (but) it preserves the idea of agriculture in that area. It’s very easy to support.”
Local residents and business owners echoed that sentiment. Michelle Castellano Keeler, vice president of Mellano and Company—a farm that raises flowers, succulents and ornamentals on hundreds of acres in South Morro Hills—said, “We encourage this project at a time when farming becomes less and less viable.”
Dennis Martinek, a longtime South Morro Hills resident and former Planning Commission member, pointed out that the city’s general plan, which he helped shape, explicitly supports agricultural uses. “The plan is very clear in supporting agriculture, and that’s what we’ve done in our area for many years,” Martinek remarked.
Regulatory background and city licensing landscape
Oceanside’s cannabis licensing program began with the legalization of medical marijuana in 2018. In 2020, the City Council authorized recreational cannabis businesses and approved the first delivery‑only retail sales. By August 2025, the city had established a process to issue its first four in‑store retail cannabis licenses.
To date, Oceanside has granted approximately 20 licenses for various cannabis activities—including cultivation, manufacturing, distribution and retail—but only about five of those licenses remain active. Each license holder must also obtain a conditional use permit from the city and a state cannabis license from the California Department of Cannabis Control.
The current application follows a precedent set by Zenleaf, LLC, which received cultivation and nursery conditional use permits in 2021 for a site at 5712 North River Road. After a brief period of operation, Zenleaf ceased activities; its licenses were later transferred to PBI Design, LLC.
Senior Planner Dane Thompson confirmed that the Planning Commission’s recommendation aligns with the city’s established review process and that the final decision will rest with the Oceanside City Council at a meeting expected within the coming weeks.
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