There is still a chance that the Pennsylvania legislature approves recreational cannabis in 2020. How will that impact Illinois-based companies that operate in the state? (Credit: Flickr/Sean Setters)

As Pennsylvania copes with a $4 billion budget shortfall, lawmakers are pushing to liberate a projected $500 million in tax revenue through adult-use legalization of a product already deemed to be medically essential by the state.  

“Before the pandemic we had a perfect opportunity to do something in the Commonwealth,”  Pennsylvania State Representative Jake Wheatley (D-19) explained this week to CBS Radio. “Now because of the overall climate, any and all revenue streams that are responsible and new should be on the table.” 

While New York, New Jersey and Connecticut postponed attempts to legalize adult-use cannabis consumption through their state legislatures until 2021, there is still a chance for Pennsylvania to green light recreational sales during a lameduck session after the November elections. 

Similar to Illinois, which pioneered a pathway to recreational legalization through the state legislature rather than a ballot initiative, no law will be passed without a consensus between private enterprise and community-centered economic developers. 

“The social justice advocates and the big operators are going to have to find commonality,” says Jeremy Unruh, an executive with Chicago-based Pharmacann, which has multiple growing, processing and retailing locations in the state along with rights to eventually open up seven more dispensaries. 

In addition to PharmaCann, Chicago-based Green Thumb Industries and Cresco Labs also operate retail chains throughout the state. 

After the Pennsylvania Medical Marijuana Program was signed into law in 2016, cannabis retailers in the state generated $132 million in revenue in 2018 and more than $368 million in 2019. As witnessed earlier this year in Illinois, once cannabis can be legally purchased by all adults sales increase several orders in magnitude. Rep. Wheatley’s projection of $500 million in tax receipts is not audacious when you consider that Colorado, which has about half of the population of Pennsylvania, now generates more than $1 billion annually in cannabis tax revenue. 

“It’s a tremendous boost to the economy of the Commonwealth of Pennsylvania,” said Unruh,  “as well as a great shot-in-the-arm to the cannabis legalization movement for another eastern medical program to transition into a responsible adult use program.”  

Regional clustering amid calls for national legalization

Last fall, the governors of Pennsylvania, New York, Connecticut and New Jersey convened to collaboration on adult-use cannabis legalization plans. Then the world changed. 

If Pennsylvania is able to pass adult-use legalization amidst (or perhaps because of) economic and social fallout due to the coronavirus pandemic, there are still opportunities to share best practices to grow a regional cannabis-infused economy. 

“Now that all of these states are working together for healthcare initiatives, we can expect an increase in terms of sharing data about all of these related initiatives,” said Andy Seeger, an analyst with The Brightfield Group in Chicago. 

Why stop there?

Chicago cannabis CEOs Ben Kovler of Green Thumb Industries and Charlie Bachtell of Cresco Labs celebrated 420 earlier this week evangelizing on CNBC that nationwide legalization may seed economic recovery in the United States.

“Cannabis has to be part of the discussion” of any economic development program,” said Bachtell. 

Added Kovler: “The great American experiment will become more real as the federal government sees what’s happening in the states.”

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Brad Spirrison is a journalist, serial entrepreneur and media ecologist. He lives in Chicago with his son. Interests include music, meditation and Miles Davis.