Oceanside reviewed its application process, location requirements and other details again Wednesday for a proposal to issue the city’s first four storefront retail cannabis licenses.

The City Council’s latest fine-tuning included possible adjustments to the minimum distance allowed between the walk-in cannabis shops and schools, and the removal of a mandate for applicants to have an approved location for their shop before the license is issued.

Instead, the City Council could control the individual locations later when it approves the conditional-use permits required by the businesses.

“Taking this out will allow us to get faster to the most qualified operators,” said Councilmember Rick Robinson. “It will be a much easier discussion about where they are going to go.”

City staffers will rework the proposed regulations based on the suggestions and return with new details at the City Council’s Aug. 6 meeting, when the proposed storefront licensing program could be approved.

Under the proposal, cannabis shops would not be allowed in the coastal zone, which is generally west of Coast Highway, or in the downtown district, the Mission San Luis Rey Commercial Village area or master planned areas, and only in some commercial and industrial areas.

The shops would have to be at least 1,000 feet from places such as residential neighborhoods, schools, public parks and playgrounds, youth centers and libraries, child care facilities, and churches.

Mayor Esther Sanchez said she wanted more distance between the shops and schools.

“I’d like to see more like half a mile from a school,” Sanchez said. “I don’t see why we can’t easily put this in.”

City Planner Sergio Madera displayed a map that showed the half-mile buffer for schools would make about half the city off-limits to cannabis sales. It also would force the shops to be closer together or focused in a limited neighborhood, something the city wants to avoid.

“We may eliminate so many sites that few are available,” Madera said, adding that the city’s proposal already exceeds the state-mandated buffer of 600 feet.

Oceanside legalized medical marijuana uses only in 2018 and since then has gradually expanded its licensing program. In 2020, the City Council approved the first delivery-only retail sales. Also that year, it agreed to allow recreational cannabis businesses.

In 2023, the City Council majority agreed to create two licenses for walk-in retail shops and possibly a third if the city’s one operating delivery-only license holder could qualify for it. Later the council decided to offer up to four retail licenses.

So far, the city has issued 20 licenses for a variety of cannabis-related businesses, from cultivation and manufacturing to off-site distribution.

Only five of the licenses are active, and those are held by just two local businesses. MedLeaf delivers cannabis products, while Left Coast has manufacturing and commercial distribution businesses, but no delivery.

The proposed regulations would give the city’s two existing cannabis businesses priority over other applicants for the four available retail licenses.

A staff report prepared for the City Council in 2023, before the fourth license was added, said that Oceanside can expect to receive about $1.3 million annually in tax revenue from three retail cannabis sales licenses.

In Oceanside’s neighbor to the east, Vista, voters approved a ballot measure on Nov. 6, 2018, that allows up to 11 cannabis retailers in the city. Elsewhere in North County, Escondido, Carlsbad and San Marcos prohibit commercial marijuana activities.

San Diego County and several other cities within the county, including Encinitas, allow limited commercial cannabis activities.