Ohio has legalized recreational cannabis. Click HERE to learn more about cannabis business opportunities in Ohio.

How to Open a Dispensary in Pennsylvania

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.

On February 1st, 2024, a poll showed that 63% of Pennsylvania voters supported marijuana legalization. In response, on February 6, 2024, the governor proposed a budget to legalize and regulate cannabis for adults over 21, following Ohio’s approach.

Building on this momentum, Pennsylvania House lawmakers introduced a bill on April 9, 2024, that emphasized safety and social equity. The bill set the consumption age at 21, strengthened DUI enforcement, banned marketing to children, and allowed home cultivation for medical patients. It also prioritized licensing for disadvantaged groups and simplified the expungement of past offenses. The bill proposed an 8% sales tax and a 5% excise tax while protecting firearm and child custody rights and aimed to prevent market dominance by a few companies, promoting capital access for minority business owners.

On April 12th, 2024, Act 63 of 2023, signed into law by Governor Shapiro on December 14, 2023, became effective. This legislation allows qualified independent Medical Marijuana Organizations (MMOs) to apply for either a grower/processor (G/P) permit or a dispensary permit. Under this act, an independent G/P may apply for one dispensary permit, and an independent dispensary may seek one G/P permit.

In this evolving landscape, medical marijuana in Pennsylvania can only be sold through licensed dispensaries, which must go through the proper licensing procedures. 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 to be eligible in the state. Here are some things to consider before opening a dispensary in the Keystone State.

Medical Cannabis Program Opportunities in Pennsylvania

Act 63 of 2023 allows qualified independent MMOs to apply for grower/processor or dispensary permits. The completed applications for these permits will be accepted from May 12, 2024, until June 12, 2024. The permit will be issued to the business entity that holds the original permit and not to a separate legal entity.

Act 63 of 2023 stipulates the following:

(1) An independent grower/processor that applies and fulfills criteria will be granted one dispensary permit.

(2) An independent dispensary that applies and fulfills criteria will be granted one grower/processor permit.

Act 63 of 2023 Application Schedule Overview

Prospective applicants should mark their calendars with these critical dates to ensure compliance with the application timeline for Grower/Processor and Dispensary permits under Act 63 of 2023:

  • April 12, 2024: Official release of the Application for Approval along with associated attachments and guidelines for Grower Processor and Dispensary Permit Applications via Pennsylvania’s Medical Marijuana website.
  • May 12, 2024: Opening date for submissions. The Department will begin accepting applications for Act 63 of 2023 permits.
  • June 12, 2024: Deadline for submissions. This is the final day the Department will accept applications for Act 63 of 2023 permits.

Required Fees for Pennsylvania Grower/Processor and Dispensary Permit Applications:

When applying for either a grower/processor or dispensary permit under Act 63 of 2023, applicants must adhere to specific payment requirements.

  • Grower/Processor Permit Application Fees:
    • Application Fee: $10,000
    • Permit Fee: $200,000
  • Dispensary Permit Application Fees:
    • Application Fee: $5,000
    • Permit Fee: $30,000 for each location listed in the application, not exceeding $90,000 in total.

Application fees and permit fees are to be paid using separate certified checks or money orders, each made payable to the “Commonwealth of Pennsylvania.” These fees must be enclosed in individual sealed envelopes within the main application package.Importantly, the Application Fees are non-refundable regardless of the application’s outcome. However, Permit Fees are refundable if the permit is not issued.

Medical Marijuana Regions

The Commonwealth is segmented into six Medical Marijuana Regions, each consisting of the counties outlined below. An applicant have the option to apply for one permit within any of these designated Medical Marijuana Regions.

Region 1 SoutheastBerks, Bucks, Chester, Delaware, Lancaster, Montgomery, Philadelphia, Schuylkill
Region 2 NortheastCarbon, Lackawanna, Lehigh, Luzerne, Monroe, Northampton, Pike, Susquehanna, Wayne, Wyoming
Region 3 SouthcentralAdams, Bedford, Blair, Cumberland, Dauphin, Franklin, Fulton, Huntingdon, Juniata, Lebanon, Mifflin, Perry, York
Region 4 NorthcentralBradford, Centre, Clinton, Columbia, Montour, Northumberland, Sullivan, Snyder, Tioga, Union, Lycoming, Potter
Region 5 SouthwestAllegheny, Armstrong, Beaver, Butler, Cambria, Fayette, Greene, Indiana, Somerset, Washington, Westmoreland
Region 6 NorthwestCameron, Clarion, Clearfield, Crawford, Elk, Erie, Forest, Jefferson, Lawrence, McKean, Mercer, Venango, Warren

Determine Whether or Not You’re Allowed to Open a Marijuana Dispensary

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 violated 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.

Earning Potential of Medical Marijuana Dispensaries in Pennsylvania

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. 

Final Thoughts

Based on the growth, it appears as though the marijuana industry in Pennsylvania – and 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.

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.