The police officer will now have moved out of the doorway of the house above the gym in Cerulean. You will run into a Rocket who stole the man inside the house's Dig TM. After defeating him, the man in the house will let you keep the TM as a sign of appreciation. Head back through the back of his house and begin your travel down Route 5.
By leaping over the hedges, you'll eventually reach a house which you'll discover is a Pokémon daycare. You can leave a Pokémon there to gain levels, for a fee of course. Careful though, it may learn and lose skills you didn't want, but that's the risk you take. The entrance to Saffron City is closed so you'll have to detour through the Underground Path to Route 6.
