Marijuana: From Illicit to Taxable Sales for PA

The third adult-use marijuana hearing in the Pennsylvania General Assembly focused on diverting the billions spent on illicit marijuana annually into state tax coffers and ensuring that the medical marijuana program isn’t threatened by legalizing the drug for adults.

A previous hearing in February focused on the threat of losing tax revenue to New York and New Jersey, and the theme returned again.

“As adult-use legislation passes all around Pennsylvania, tax revenue that belongs in the Commonwealth [is] being given to neighboring states,” said Meredith Buettner, executive director of the Pennsylvania Cannabis Coalition.

READ: Wolf: PA is Ready to Legalize Marijuana

Increase tax revenue & improve safety

“Between $3-$4 billion are being spent on marijuana right now, annually,” said Sen. Mike Regan, R-Dillsburg. “What’s being presented in other states could eventually be implemented here and probably should be implemented here now because it’s obviously taking place now.”

Rather than continuing the status quo, Regan indicated a push for legalizing and regulating marijuana is a response to safety concerns. Finding the gold standard of how other states have implemented legalization, Regan noted, is the main thrust of the hearings.

“Everyone has to be comfortable with this. And people coming to work high – like they’re doing now – is not safe. We need to be able to have a way to test it, an effective way to test it,” Regan said.

Concerns with medical program

Other states have seen problems arise with their medical marijuana program when recreational use becomes permitted. Some of those issues go back to bad implementation and regulation.

“The regulating entity must be empowered to oversee both a medical and an adult use program,” Buettner said. “Having two programs sit under separate entities makes it nearly impossible for a medical program to survive.”

Buettner pointed to Massachusetts as an example to follow, streamlining both programs and avoiding unnecessary burdens on recreational and medical operators.

Transparency and easy-to-understand information on the rules and regulations Pennsylvania would set for businesses was another common issue.

“It’s hard to get to a place where there’s clarity on a number of these issues,” said Michael Bronstein, president of the American Trade Association for Cannabis and Hemp. 

Mark Nye, a former regulator and the vice president of operational compliance for Parallel (a multi-state marijuana company), echoed Bronstein.

“It’s absolutely critical that a regulatory agency communicate its expectations and its interpretation of its own rules,” Nye said. “It’s very difficult to comply with things if you don’t know what you’re complying with.”

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