Responsible PA, a Pennsylvania-based advocacy group, recently partnered with FTI Consulting to determine important data about the state’s cannabis industry potential.
FTI Consulting analyzed trends exhibited in other states surrounding reform and legalization and came to the conclusion that adult-use cannabis sales in Pennsylvania could reach anywhere between $1.7 billion to $2.8 billion within its first year of operation.
The report was released during a digital news conference held on June 20 by Responsible PA. “There’s an enormous economic impact the state of Pennsylvania has left on the table year after year,” said Responsible PA spokesperson Brit Crampsie.
FTI Consulting stated that the sales projection includes the assumption that the state may implement a 6% retail sales tax, in addition to a 15% excise tax and other applicable taxes to consider. Additionally, the projection estimates that the state would collect $420 million to $720 million in cannabis tax revenue during the same time period.
A surge in legal cannabis businesses would also bring a slew of job openings, and FTI Consulting stated that legalization would lead to 26,250-44,500 new jobs. “Nearly two-thirds of the jobs supported by the adult use market would be direct cannabis jobs, with the remaining third supported indirectly or through induced spending,” the report stated.
The report also added that the state would need to approve 43-100 retail licenses in order to properly serve the state as a whole.
Adult-use cannabis has not yet been legalized in Pennsylvania, but there are numerous efforts trying to get legalization passed.
On June 17, Rep. Aaron Kaufer and Rep. Emily Kinkead announced the introduction of their bill. Currently it doesn’t have a numbered designation, and will not receive one until later this month, but a report from WVIA said that according to Kinkead, it will be called House Bill 2500. If passed into law, the bill would “foster job creation and generate significant tax revenue for the Commonwealth, while helping eradicate the illicit market plaguing many communities.”
According to Kaufer, the Pennsylvania medical cannabis program would serve as a foundation for adult-use legalization. “This bill underscores our commitment to responsible regulation of the cannabis industry while addressing the diverse needs of Pennsylvania’s communities,” said Kaufer. “By prioritizing public safety and consumer protection, this legislation will build on the successful regulatory structure of the state’s medical cannabis program, continuing stringent standards for product quality, packaging and labeling to ensure the well-being of all consumers.”
Kinkead stated that adult-use legalization is long overdue. “It is well past time for the Commonwealth to legalize cannabis for recreational use, address the injustices of the failed War on Drugs, and ensure that Pennsylvanians can benefit from this industry in the same way our neighboring states have,” said Kinkead. “Our bipartisan effort to provide specific language that takes the best practices from other states is the next substantial step in finally getting this done.”
Pennsylvania Gov. Josh Shapiro revealed his 2024-2025 budget proposal (approximately $48.3 billion in spending) earlier this year in February, which included a call to legalize cannabis. “I ask you to come together and send to my desk a bill that legalizes marijuana. But that bill should ensure the industry is regulated and taxed responsibly,” Shapiro stated. “We’re losing out on an industry that, once fully implemented, would bring in more than $250 million in annual revenue. And our failure to legalize and regulate this only fuels the black market and drains much-needed resources for law enforcement. It’s time to catch up.”
If cannabis is accepted in Shapiro’s budget, it would legalize adult-use cannabis starting on July 1, 2024, with an estimated sales start date on January 1, 2025. His pitch includes a 20% tax on adult-use cannabis, which would net more than $250 million in annual tax revenue. He also included the need for expungement for those who have been convicted of cannabis-related crimes and stated that the Department of Agriculture would helm the adult-use cannabis program. Additionally, the legislature would need to come up with the rest of the details.
However, Shapiro’s budget is due by June 30 and news reports show that cannabis legalization is likely not going to be included. Rep. Dan Frankel said that passing legalization is “probably not a realistic timeframe,” however, he did tell Spotlight PA that they “are on a path to get this done.
Another bill, Senate Bill 846, was first introduced in 2023 by Sen. Dan Laughlin and Sen. Sharif Street, and would permit medical cannabis businesses to sell adult-use cannabis while also implementing rules to assist social equity applicants who want to take part in the industry.
Additionally, A House Co-Sponsorhip Memoranda was published on June 17, which calls for adult-use cannabis legalization and the implementation of regulations, product packaging requirements, law enforcement funding, farmer support, and job generation. “Accordingly, we believe that now is the time for Pennsylvania to move in a similar direction and our bill establishes strong tenets for an adult-use market,” the bill text stated.