Pennsylvania Governor Tom Wolf Wants State to Legalize Adult-Use Cannabis
Pennsylvania is staring down a multibillion-dollar budget shortfall as a result of the coronavirus pandemic, and Gov. Tom Wolf wants the state legislature to legalize adult-use marijuana in an effort to help overcome the deficit.
“Up until the pandemic, things were going pretty well in Pennsylvania,” Gov. Wolf said during a news conference on Tuesday. “The unemployment rate in Pennsylvania was at an all-time low, we had a record-high number of jobs, and we had revenue that allowed the government to do the things it needed to do and save money.”
Indeed, before the COVID-19 pandemic really took hold in the U.S., Pennsylvania boasted a $250 million surplus, Wolf said. That money got used in March and now, like many other states, Pennsylvania is grappling with a ballooning deficit, widespread unemployment and a need to support small business recovery efforts.
Speaking during the Tuesday news conference, Wolf said Pennsylvania will be able to tap into $1 billion in CARES Act funding to support several initiatives — like providing hazard pay and PPE to frontline workers, among others — but it will need additional sources of income to help offset the costs associated with assisting small businesses.
His suggestion? Legalize and tax adult-use cannabis, a “common sense” move that Wolf said would bring in supplemental revenue to help small Pennsylvania business owners recover from the pandemic.
“This might be one way to the plug a hole,” he said, when asked about the appetite for legalizing cannabis in a Republican-controlled legislature.
“My hope is that with the pandemic, and the hit that we’ve taken to revenue, that there might be a little more interest in it right now,” Wolf added.
Under his proposal, 50% of the funds would be “earmarked for historically disadvantaged businesses,” while another portion of the tax revenue would be “used to further restorative justice programs that give priority to repairing the harm done to crime victims and communities as a result of marijuana criminalization.”
NORML executive director Erik Altieri praised Wolf's recommendation to legalize cannabis.
“By calling for adult-use marijuana legalization in the Keystone State, Governor Wolf is representing a view that is shared by the majority of Pennsylvania voters," Altieri said via a statement. "Regulating the adult-use market will mitigate racially disparate arrests while advancing civil liberties and generating much needed revenue for important social programs. The legislature should heed the governor’s call and put Pennsylvania toward a more humane and sensible marijuana policy.”
Nevertheless, the prospect of benefiting from recreational cannabis legalization would be months -- if not years -- away.
According to The Associated Press, the House and Senate have just 11 session days before the November elections, which leaves little time for lawmakers to agree on a path forward.
Even if Pennsylvania were to become just the second state (after Illinois) to legalize recreational cannabis through the state legislature rather than a ballot initiative, integrating adult-use sales into an existing medical marijuana sector would take time.
According to The Appeal, Wolf envisions recreational cannabis being sold from state-run dispensaries, similar to Pennsylvania’s existing liquor and wine outlets.
When questioned about the immediate financial benefit of legalization, Wolf admitted that tax revenue from the sale of recreational marijuana would be collected “farther down the road” and would not instantly support struggling businesses who need the money now.
“But there is something that we can do now to start that, so that as quickly as possible we’ll be able to recognize revenue from it,” he said.
A 2018 report from Pennsylvania Auditor General Eugene DePasquale pegged the adult-use cannabis market at $1.6 billion. Assuming an effective 35% tax rate, the state could add more than $581 million to its coffers by legalizing recreational marijuana, DePasquale projected.
By comparison, Colorado collected $302 million in taxes last year from the sale of legal cannabis and has generated more than $1.4 billion in revenue since 2014. Meanwhile, Illinois, which kicked off legal adult-use sales in January, collected $52 million in tax revenue through the first six months of 2020.
It’s also worth noting that voters in New Jersey are likely to approve an adult-use cannabis ballot measure this year. However, those familiar with the effort have suggested that sales might not begin until 2022.
Either way, if Pennsylvania doesn’t move to legalize recreational marijuana soon, it will continue to miss out on much-needed tax revenue and its residents may be forced to cross state lines to make purchases.
According to a 2019 Franklin & Marshall University poll, 58% of registered voters in Pennsylvania support marijuana legalization, however a majority (also 58%) would rather see private companies distribute and sell cannabis, not the state.