San Diego, CA – Real Estate & Cannabis Regulations (City & County)

As several local cities begin to open up for business and the county looks to overturn its moratorium on cannabis, the county of San Diego is poised to become a massive hotspot for cannabis real estate. In the last two years, the cities of Chula Vista, La Mesa, Imperial Beach and Vista have all opened up to commercial cannabis businesses and Encinitas recently voted to allow cannabis businesses and Lemon Grove and National City soon to join.

San Diego, CA Cannabis & Commercial Real Estate Research

There is a big difference between San Diego City & County, with distinct regulations for each.

Our research team has compiled the data on both San Diego County and the City of San Diego for you to understand the basics of each region. Read about the San Diego regulations and find San Diego Cannabis Real Estate properties below. Please contact us for more advanced research, mapping, property suggestions, and emerging opportunities. We look forward to hearing from you and helping your business succeed in the cannabis industry.

City of San Diego, CA Regulations

Cannabis Status: Open

Name: San Diego, California
Population: 1.41 million
Median Income: $36,609
Cannabis Uses: Indoor Cultivation, Retail, Delivery, Manufacturing, Testing, and Distribution
Cannabis Overview: The city currently has a cap of 40 Cannabis Production Facilities and a limit of four Cannabis Outlet retail establishments in each of the city’s nine council districts.

San Diego is a city on the Pacific coast of California known for its beaches, parks and warm climate. Immense Balboa Park is the site of the renowned San Diego Zoo, as well as numerous art galleries, artist studios, museums and gardens. The city’s historic harbor is home to a large active naval fleet, with the USS Midway, an aircraft-carrier-turned-museum, open to the public.

Both medical and adult-use cannabis are licensed in the City of San Diego in addition to cultivation, manufacturing, distribution and testing. Cannabis Production Facilities (CPFs), where cultivation, distribution and manufacturing are allowed, are limited to 40 throughout the city.

Cannabis Outlets (COs) are retail establishments where cannabis is sold directly to consumers. COs are capped at 36 licenses, with a maximum of four in each of the City’s nine council districts. Unfortunately, strict zoning regulations and setback requirements has led to a struggle in many districts for applicants to find properly qualified properties, leading to several areas with a lack of proper cannabis access.

Uses: The city allows the following adult-use and medical commercial cannabis uses:
Cannabis Production Facilities (CPFs): these facilities may include operations involving agricultural raising, harvesting, processing, storage, and wholesale distribution of cannabis products.

Cannabis Outlets (COs): Establishments (retail, medicinal or combination) operating with a Conditional Use Permit where cannabis, cannabis products and cannabis accessories are sold to the public. Delivery is also allowed from these establishments.

Testing Facilities: Testing for scientific research (including cannabis testing) that leads to the development of new product and processes is allowed as an Industrial Use.

Distance Requirement: Must be located: 1,000 feet from resource- or population-based city parks, other outlets, churches, childcare centers, playgrounds, libraries, minor-oriented facilities, residential care facilities and schools; and 100 feet from residential zones.

Cap of Business: 40 Cannabis Production Facilities (CBFs) citywide and 4 Cannabis Outlets (COs) in each of the city’s 9 council districts.

Tax Rate: Effective January 1, 2018, the Cannabis Business Tax rate was 5%. On July 1, 2019, the rate increased to 8%.

Two types of sales qualify as medical marijuana activities excluded from the Cannabis Business Tax: (1) Nonprofit cannabis businesses that make only medical cannabis sales can exclude gross receipts from sales made to patients with a doctor’s recommendation or a state issued Medical Marijuana Identification Card and (2) Nonprofit and for-profit cannabis businesses with both medical and recreational cannabis sales can exclude gross receipts from medical cannabis sales only when made to patients with a state issued Medical Marijuana Identification Card.

City of San Diego Municipal Code Chapter 4 Article 2 Division 13


City of San Diego Municipal Code Chapter 4 Article 2: Health Regulated Businesses and Activities Division 15: Cannabis Outlets, Cannabis Production Facilities, and Transportation of Cannabis

SEED Social Equity Program in San Diego

Read this comprehensive analysis on the Social Equity in Economic Development (SEED) Program and delve into the critical aspects of these SEED Program updates. Learn the potential to cultivate a wealth of opportunities for social equity entrepreneurs and the community at large in San Diego.

San Diego County, CA Regulations

Cannabis Status: Pending

Name: San Diego County, CA
Population: 3.338 million
Median Income: $34,307
Cannabis Uses: Storefront Retail, Non-Storefront Retail, Cultivation, Manufacturing, Distribution, Onsite Consumption

Cannabis Overview: The county has had a moratorium on new commercial cannabis since March of 2017, with only a limited few medical dispensaries previously existing left to serve the area. The County Board of Supervisors directed staff on January 27th to develop an ordinance within 180 days to allow commercial cannabis uses in the county.

The County of San Diego is the fifth largest county in the United States and second largest in California with a population of approximately 3.4 million. This county is comprised of 18 incorporated cities, half of which have legalized commercial cannabis including: San Diego City, Chula Vista, Imperial Beach, La Mesa, Lemon Grove, National City, Oceanside, Vista and Encinitas where Measure H recently passed in November of 2020. Each of these incorporated cities have their own rules for how they regulate commercial cannabis in their cities.

The County of San Diego also includes a massive area of additional unincorporated territory including large communities like Fallbrook, Bonsall, Julian, Alpine, Otay, and Borrego Springs.

These unincorporated areas fall under the county’s jurisdiction for their cannabis regulations and have had little to no access to legal cannabis in the past. Currently only five medical marijuana dispensaries are allowed to operate in the city. As the county looks to end it’s moratorium on cannabis businesses, San Diego County is poised to be a massive new market in the cannabis industry.

Uses (Pending): Indoor Cultivation, Retail, Delivery, Manufacturing, Testing, and Distribution

Distance Requirement (Pending): Commercial Cannabis Activity has to be located at a minimum distance of 600 feet from sensitive uses: School k-12, youth center, and day care centers.

Cap of Business (Pending): TBD

Tax Rate: TBD

Other Incorporated Cities in San Diego County

Chula Vista

Measure Q passed in November of 2018, allowing adult-use licensed cannabis in Chula Vista, including cultivation, manufacturing, distribution, retail and testing. There are a total of 12 retail licenses available with a limit of three per district. By year-end 2020, only one retail license has been issued for a non-storefront delivery service which began operating in November of last year. There are multiple lawsuits pending against the City claiming the application process was arbitrary and biased in nature. Chula Vista’s retail cannabis business tax is currently 7%.


Measure H, which allows for adult-use cultivation, manufacturing, distribution and retail sales, was passed by Encinitas voters on November 3, 2020. When available, there will be a limit of four retail licenses, which can be increased by the City Council at their discretion. Applications for cannabis licenses could be accepted by Encinitas as early as Q3 2021. There is no local cannabis business tax on retail sales other than standard sales tax. 

Imperial Beach

In July of 2018, the Imperial Beach City Council approved an ordinance to allow one adult-use retail license. At least 12 months after the first dispensary opens, the City Council may vote to allow one additional license. Imperial Beach has no local cannabis business tax and has yet to issue its first commercial license.

La Mesa

The City of La Mesa allows both medical and adult-use licenses for retail sales, cultivation, manufacturing, distribution and testing. Multiple licenses have been issued, and there are currently five dispensaries operating in the city. The local cannabis business tax rate in La Mesa is 4%. 

Lemon Grove

Licensed cannabis in Lemon Grove is currently limited to medical dispensaries only, though the City Council is expected to adopt adult-use regulations in 2021. One medical dispensary is operating in La Mesa with multiple applications in process for the three remaining licenses that are available. On November 3, 2020 Lemon Grove voters approved Measure J, to establish a commercial cannabis business tax of up to 8% for retail sales and up to 4% for all other marijuana businesses. On December 15, 2020, La Mesa’s City Council decided on an initial tax rate of 5%, which went into effect on January 1, 2021. 

National City

Currently, all commercial cannabis activity is prohibited in National City. However, on September 17, 2019, City Council voted to develop an ordinance allowing for three cannabis businesses in National City, then voted again on February 18, 2020, to allow a maximum of six cannabis businesses that can include consumption lounges and a 5% community benefits tax rate for these businesses. If passed in a timely manner, National City would become the first jurisdiction in San Diego County to allow for on-site cannabis consumption. The Covid-19 pandemic has stalled progress on this issue, leaving local healthcare and community activists as well as the cannabis industry waiting for the adoption of the ordinance. 


On April 11, 2018, the City of Oceanside approved medical cannabis. Updates to the original ordinance include the addition of adult-use cultivation in June of 2020 and the passage of ballot Measure M, establishing a cannabis business tax on November 3, 2020. To date, Oceanside has issued 10 medical cultivation licenses, two nursery licenses, for manufacturing licenses and three for distribution as well as two non-storefront retail (delivery only) licenses. To date, one retail business is operating in Oceanside, and the cannabis business tax for retailers is 5%, which went into effect on January 1, 2021. 


Commercial cannabis was adopted in Vista on November 6, 2018, when residents voted in favor of ballot Measure Z, which allowed up to 11 medical cannabis retailers. On December 10, 2019, City Council voted to expand commercial cannabis licensing to include manufacturing, distribution and testing laboratories with a limit of two manufacturing and two distribution licenses. There is no limit on cannabis testing laboratory licenses. There are multiple medical retailers open in Vista, and the current medical retail tax is 7%.  

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The cannabis industry is very complex and you will need a range of support teams to help you operate successfully. We have found the right formula for finding eligible 420 properties and work with our clients to build compliance processes or applications that will help operate smoothly in San Diego

We’ve developed a simplified process that will get the deal done. With our advanced mapping technology, detailed regulations research, vast industry network, and knowledgeable cannabis real estate agents we are ready to support your business or real estate transaction at any stage of your operations.

From beginning to end of your operations, we will help you succeed with a cannabis license or transaction in San Diego, CA.

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Available San Diego, CA Cannabis Business & Property Listings

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