Pennsylvania is getting ever closer to legal recreational marijuana but policymakers still face tough questions about what this potentially multi-billion-dollar industry would look like.
With cultivation underway and both patients and doctors registering with the program, the state’s MMJ market is progressing ahead of schedule – a rarity in the cannabis industry.
Pennsylvania is the fifth-largest state in the country, home to nearly 13 million people, but some people still ask is weed legal in pa?
Considering the state’s extensive list of conditions that can be treated with MMJ – including chronic pain – the patient base could reach 100,000-200,000 once the market matures.
According to Marijuana Business Daily estimates, the state’s dispensary sales could exceed $100 million annually a few years after the program launches.
Here’s what you need to know about the situation:
- A total of 50 dispensary licenses and 25 grower/processor licenses will be issued in Pennsylvania. However, the permitting process is being rolled out in two phases. To date, Pennsylvania’s Department of Health has issued 27 dispensary licenses and 12 grower/processor licenses. No timeline has been released for the second phase of licensing.
- Each dispensary license holder is authorized to open up to three storefronts, meaning a maximum of 150 dispensaries will be allowed to open throughout the state. Several of the 27 current dispensary license holders have chosen to open multiple locations, with a total of 52 dispensary storefronts expected to open shortly after the program launches.
- Given the potential size of Pennsylvania’s MMJ market and the lack of any residency requirements, a significant amount of companies based outside Pennsylvania have pursued MMJ business licenses in the state. Four of the 12 grower/processor licenses and six of the 27 dispensary licenses were granted to out-of-state companies.
- Similar to New York, the sale of both flower and edibles are prohibited in Pennsylvania. This has potential to suppress MMJ sales, because some potential patients may choose to stay in the black market.
- Of the four states that border Pennsylvania with active MMJ programs – Delaware, Maryland, New Jersey and New York – the average time for the first licensed dispensary to open after the state’s MMJ bill passed was 37 months. Should Pennsylvania begin MMJ sales in or around April, as expected, it will beat this average elapsed time from legalization to sales by over a year.
- In response to Attorney General Jeff Session’s decision to rescind Obama-era policies that allowed legalized marijuana to thrive in the United States, Pennsylvania Gov. Tom Wolf has pledged to defend the state’s MMJ program. In a statement released earlier this month, Wolf staid: “We are evaluating the exact impact rescinding the directive could have on Pennsylvania’s medical marijuana program but I will continue to do everything in my power to protect Pennsylvania patients.”
Pennsylvania just launched its medical marijuana program, and leading politicians have already started to discuss full legalization. Burleson said, “We view PA as an attractive market, given the state’s large population and initial strong patient adoption for the medical program. We are forecasting the PA medical market to nearly triple from an estimated $125 million last year to approximately $350 million by 2022.”
Just last week, Pennsylvania Agriculture Secretary Russell Redding announced that the state would reopen the application process for obtaining licenses to grow commercial hemp. Only Pennsylvania and Kentucky have submitted plans to the Department of Agriculture to allow for full production of industrial hemp.
After the 2014 Farm Bill was passed that allowed for limited hemp cultivation, Pennsylvania passed its own legislation — the 2016 Hemp Research Act. Farmers with a permit could grow up to five acres of hemp, but then that was increased to 100 acres. The Commonwealth has issued a total of 84 permits for the 2019 season, however, that could go higher as applicants who had previously been denied can now reapply for a permit.
Overall, the state reported taking in approximately $11 million through December 31, 2018 for the total program. This was slightly below the expected $12 million, however the program didn’t begin until February. Pennsylvania could potentially earn $581 million in annual revenue if the state legalized adult use cannabis, according to a report released by Auditor General Eugene DePasquale.
The report went on to suggest that the total market size for the state could be $1.6 billion. The report noted, “The $1.66 billion estimate includes only the total direct sales of marijuana. It excludes the economic activity generated by jobs and businesses created to support the retail marijuana industry in Pennsylvania. It also does not account for the decreased criminal justice system costs as a result of eliminating arrests and incarcerations for possession of marijuana.”
Currently it is a somewhat level playing field for Pennsylvania dispensaries. Each license was limited to three dispensaries, although according to Cannabiz Media, a company that tracks licenses, Green Thumb Industries Inc. (GTBIF) acquired another company’s license location and is up to five. Other active license holders include Columbia Care, Cresco Labs Inc. (CRLBF) , Grassroots Cannabis and Holistic Pharma. Grass Roots’ dispensaries are named Herbology and that company is up to four locations due to an acquisition. There are 144 pending licenses and an additional 56 applications.…