Pennsylvania Could See Up To $2.8 Billion In Marijuana Sales In First Year Of Legalization And Create 45,000 Jobs, Analysis Finds

As Pennsylvania lawmakers step up their push for marijuana legalization, a new report projects that the state would see up to $2.8 billion in adult-use sales in the first year of implementation, generate as much as $720 million in tax revenue and create upwards of 45,000 jobs.

The advocacy organization Responsible PA teamed up with the firm FTI Consulting to produce the analysis, which looks at a number of potential economic impacts of legalization for the Keystone State under different scenarios for how robust the legal cannabis market would be.

By comparing the experiences of other states that have enacted the reform, as well as trends in the state’s existing medical cannabis market, analysts determined that Pennsylvania recreational marijuana sales would range from $1.7 billion to $2.8 billion in the first year.

Assuming a six percent retail sales tax and a 15 percent wholesale cannabis excise tax, and factoring in other potential tax sources such as income tax from new cannabis workers, the report says the state would bring in $420 million to $720 million in marijuana tax revenue in the first year.

Additionally, FTI estimated that adult-use legalization would create between 26,250 and 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,” it says.

To meet demand in the recreational market, analysts also said that the state would need to issue between 43 and 100 new licenses for retailers.

There are a number of variables in the report such as the tax rate that are based on theoretical legalization legislation, so it’s possible that the economic impact could be different depending on what cannabis reform plan lawmakers actually enact.

For example, this year’s budget request from Gov. Josh Shapiro (D) calls for a 20 percent tax on marijuana sales—though bipartisan lawmakers have said they feel that’s too high.

During an X Spaces event on Wednesday, Sens. Dan Laughlin (R) and Sharif Street (D) discussed that issue, while more generally arguing that there are enough members who back legalization in the Senate to get an adult-use bill through.

The conversation with the Pennsylvania legislators comes just days after bipartisan state lawmakers announced their intent to file a new bill to legalize recreational marijuana, soliciting support from colleagues.

Street was also among advocates and lawmakers who participated in a cannabis rally at the Pennsylvania State Capitol this month, where there was a significant emphasis on the need to incorporate social equity provisions as they move to advance legalization.

Laughlin, for his part, also said an event last month that the state is “getting close” to legalizing marijuana, but the job will only get done if House and Senate leaders sit down with the governor and “work it out.”

Warren County, Pennsylvania District Attorney Robert Greene, a registered medical cannabis patient in the state, also spoke at that rally. In January, Greene filed a lawsuit in federal court seeking to overturn a ban preventing medical marijuana patients from buying and possessing firearms.

Two Pennsylvania House panels held a joint hearing to discuss marijuana legalization in April, with multiple lawmakers asking the state’s top liquor regulator about the prospect of having that agency run cannabis shops.

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Also in April, members of the House Health Committee had a conversation centered on social justice and equity considerations for reform.

That took place days after Rep. Amen Brown (D) filed a marijuana legalization bill that he described as “grounded in safety and social equity.”

“I’m here to get this done,” Brown said at a recent rally, noting that he and other people he knows have a “personal experience” with current marijuana policy.

At a prior meeting in March, members focused on criminal justice implications of prohibition and the potential benefits of reform.

At another hearing in February, members looked at the industry perspective, with multiple stakeholders from cannabis growing, dispensing and testing businesses, as well as clinical registrants, testifying.

At the subcommittee’s previous cannabis meeting in December, members heard testimony and asked questions about various elements of marijuana oversight, including promoting social equity and business opportunities, laboratory testing and public versus private operation of a state-legal cannabis industry.

And during the panel’s first meeting late last year, Frankel said that state-run stores are “certainly an option” he’s considering for Pennsylvania, similar to what New Hampshire Gov. Chris Sununu (R) recommended for that state last year, though a state commission later shied away from that plan.

The cannabis proposal the Brown filed in the House in April is an identical companion to a bipartisan Senate cannabis legalization measure that was introduced last year.

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