Cannabis is quickly being legalized on a state-by-state basis in the US. To date, 22 states have legalized adult-use, and 38 states have legalized medical cannabis. Pennsylvania is one of the states where medical cannabis is legal. The process took effect in April 2016 under Governor Tom Wolf, who signed Senate Bill 3 to allow the legal consumption of medical cannabis.The Medical Marijuana Advisory Board, a branch of the state’s Department of Health, oversees the program.
On March 7th, 2023, the governor of Pennsylvania put forth a proposal to legalize and tax adult-use marijuana as a constituent of his budget request for the 2023-2024 fiscal year. The executive budget includes a suggestion to enforce a 20 percent tax on the wholesale price of marijuana products traded through the regulated production and sales system, once the substance is legalized. Assuming that sales begin on January 1, 2025, the budget anticipates that the state would generate approximately $16 million in cannabis tax revenue in that year. Subsequently, this amount is expected to increase to $64 million in 2026, $132.6 million in 2027, and $188 million in 2028.
On May 2nd, 2023, House Bill 1080, which would let individuals 21 and older possess, use, produce, and purchase cannabis via a state retail system overseen by the Liquor Control Board, was officially introduced by Rep. David Delloso (D). Meanwhile, House Bill 1082, which attempts to establish a regulatory procedure for farmers to grow cannabis for marijuana grower-processors following legalization was submitted on the same day by Rep. Melissa Shusterman (D) and 13 cosponsors.
On July 6th, 2023, Senators Dan Laughlin (R) and Sharif Street (D) filed SB 846, a bill that seeks to legalize marijuana in Pennsylvania. This proposed legislation comes after their initial announcement on May 19th, 2023 to collaborate on reform initiatives. If enacted, individuals aged 21 and above would be authorized to lawfully buy, own, and even gift up to 30 grams of cannabis.
In the Commonwealth of Pennsylvania, medical marijuana is only allowed to be sold in licensed dispensaries, which must go through the proper channels in order to open up shop. However, only a limited number of licenses are currently being issued to those who qualify. Anyone looking to capitalize on this growing market and open a cannabis dispensary in Pennsylvania will need to take the required steps in order to be eligible in the state. Here are some things to consider before opening a dispensary in the Keystone State.
There are a number of medical cannabis dispensaries operating in the state of Pennsylvania. When Senate Bill 3 passed, up to 25 marijuana grower/processor licenses and 50 dispensary licenses were created and would be granted to applicants in the state to serve only registered patients who suffer from qualifying medical conditions. Once an applicant is granted a dispensary license, they are allowed to open as many as three locations, bringing the statewide total to a potential 150 different dispensary locations.
Those who wish to open a dispensary in the state of Pennsylvania must follow certain license requirements, and many of them relate to the applicant’s financial health. Currently, Pennsylvania is not only limiting the number of licenses that it issues but also does not permit a single individual to have more than five permits. As mentioned, each marijuana business license allows dispensary owners to open three dispensaries in different locations under their name. To begin the process, dispensary owners must put forth a $5,000 non-refundable application fee upon submission, with another $30,000 fee for each location they wish to open. Unlike the initial $5,000, the latter of the fees will be refunded if the application is rejected. Further, an annual fee of $5,000 is also required to be paid if a license is granted, and proof will need to be provided to state officials that $150,000 in capital is accessible in the applicant’s bank account before the license is issued.
Once a cannabis dispensary is open, it’s important for owners to ensure that only customers who have the legal right to obtain medical marijuana can make purchases in these dispensaries. Since only medical marijuana is currently legal in Pennsylvania, only patients with eligible ailments and the appropriate medical marijuana cards are allowed to enter dispensaries. Today, there are 23 qualifying conditions that allow patients to obtain medical marijuana to alleviate their symptoms, including PTSD, multiple sclerosis, autism, cancer, epilepsy, glaucoma, and HIV/AIDS, among others.
There are a limited number of licenses that are being handed out in Pennsylvania, and not everyone will qualify for one. In Pennsylvania, certain entities and individuals are not allowed to obtain a medical marijuana dispensary permit, including doctors, anyone who has previously been in violation of the Medical Marijuana Act in the state, anyone who has previously dealt with addiction, and anyone with a prior drug charge or conviction. Some public executives may also be ineligible for a dispensary license in Pennsylvania. Government officials want to ensure that license applicants have “good moral character” before a license is granted to legally operate a dispensary in the state.
According to a sales projection for marijuana in Pennsylvania spanning from 2016 to 2025, the estimated value of marijuana sales in the state is expected to reach around 1.25 billion U.S. dollars by 2025.
Leafly predicts that the cannabis market is expected to reach nearly $45 billion annually by 2025 with the opening of dispensaries in newly legal markets. However, this is just a quarter of the estimated revenue that will be generated once national legalization occurs. The report predicts that the legal marijuana industry will create 1.5 to 1.75 million jobs, which is more than four times the current employment levels.
The PA medical marijuana program has high potential, exceeding $132 million based on 600,000 transactions in its first year since legalization. The global compound annual growth rate (CAGR) is expected to remain at 23.9% through 2025.
Based on the growth, it appears as though the marijuana industry in Pennsylvania – and in the US as a whole – is a very lucrative market that can provide entrepreneurs with an opportunity to take advantage of a growing industry. More and more cannabis companies and growers are popping up all over the country, and a rapidly expanding consumer base is showing the incredible demand for cannabis products, both for adult-use and medical purposes. Considering this, getting into the cannabis business may be a highly profitable opportunity for some who can see the potential of this industry in the near future and over the long run.
That said, familiarize yourself with the laws surrounding the operation of a medical marijuana dispensary in Pennsylvania, and gather the necessary funds and resources needed to both apply for and operate a successful cannabis dispensary in the state.
The state is currently not accepting applications at this time as of September 10th, 2020. By adding yourself to our Pennsylvania Cannabis Mailing List (below), we will keep you informed when the state starts accepting applications. We will also keep you up to date on all relevant updates on how to open a dispensary in Pennsylvania.
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