PA governor again asks lawmakers to legalize adult-use cannabis

For the third straight year, Pennsylvania Gov. Josh Shapiro called on state legislators during his annual budget address on Tuesday to legalize adult-use cannabis.

If lawmakers in the state’s split Legislature can overcome a yearslong partisan deadlock, Pennsylvania would be the 25^th state to legalize recreational marijuana – and would create an industry with annual sales of $2.8 billion within a year, according to one estimate.

Shapiro, who took office in 2023, has included tax revenue from legal cannabis in each of his three annual budgets.

Pennsylvania would tax adult-use marijuana at 20%

As he did the past two years, Shapiro proposed a wholesale tax of 20% on adult-use marijuana.

That would be one of the higher tax rates in the country but could generate as much as $1.3 billion in tax revenue over the first five years of legalization.

And with a budget deficit approaching $3.7 billion, Pennsylvania is in dire need of cash.

“I ask you to come together and send to my desk a bill that legalizes adult-use cannabis and expunges the records of people who have been convicted for nonviolent possession of small amounts of marijuana,” the Democratic governor and consensus 2028 presidential nomination contender told a joint session of the state General Assembly in Harrisburg.

“I want to be real with you – as a father of four … and as the former chief law enforcement officer of this Commonwealth – this one was hard for me,” Shapiro added, according to a transcript of his remarks.

“But I took the time to study it and understand the impacts. To understand the choice between continuing the (illicit) market of drug dealing versus a highly-regulated industry with protections in place for our children.

“Letting this business operate in the shadows doesn’t make sense. And by doing nothing, we’re making Pennsylvania less competitive.”

Pennsylvania budget crisis could boost legalization effort

It’s not yet clear what type of legislation lawmakers might send to Shapiro’s desk for his signature – or if they’re able to pass an adult-use bill at all. 

Last year, Pennsylvania’s legislators considered separate proposals that would have set up recreational marijuana sales at state-run stores, similar to alcohol, or allowed existing medical marijuana dispensaries to start selling adult-use products.

Despite majority support in the Democratic-controlled House, no legalization bills passed the Republican-run state Senate.

Industry advocates as well as some state lawmakers believe that the fiscal outlook might be what finally convinces reluctant lawmakers.

There’s also external pressure from bordering states such as Maryland, New Jersey, New York and Ohio – all of which have legal adult-use markets.

Cannabis executives from neighboring states have told Shapiro that as much as 60% of their customers come from Pennsylvania, the governor noted Tuesday.

Shapiro’s “vision for legalization in the state makes us competitive once again with neighboring states,” Britt Crampsie, a spokesperson for legalization advocacy group Responsible PA, said in a statement.

“We deserve an adult use cannabis market, just like our border states of Ohio, New Jersey, Maryland, and New York. We deserve the jobs it supports and the revenue it generates.

“To go another year under prohibitionist policy serves no one and dwindles the state’s resources.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.