The Governor projects that legalizing recreational cannabis could bring in $1.3 billion in the first five years.
Governor Josh Shapiro unveiled a proposal to legalize recreational marijuana in Pennsylvania during his annual budget address on Tuesday. This is the third time he has urged lawmakers in the state to legalize recreational cannabis use, touting the potential for additional tax revenues for the Commonwealth.
During his annual budget address, Shapiro stated “Letting this business operate in the shadows doesn’t make sense,” while also admitting that neighboring states are presently the ones reaping the benefits of the lack of a legal recreational cannabis market in Pennsylvania. Shapiro also noted that companies in New Jersey, New York, and Maryland report that 60% of their customers come from Pennsylvania.
I've talked to the CEOs of the companies who own adult-use cannabis stores right across the border in New Jersey, Maryland, and New York.
They tell me that up to 60% of their customers in those shops are Pennsylvanians.
We’re losing out on revenue that’s going to other states… pic.twitter.com/WwBaTayzsY
— Governor Josh Shapiro (@GovernorShapiro) February 4, 2025
Over the first five years, the Governor projects that the legal recreational cannabis industry can bring “$1.3 billion in new revenue” into the state. He proposed a sales tax of 20% on products and also noted that the Pennsylvania Department of Agriculture can be tasked with overseeing the industry.
The state has allowed a medicinal marijuana market to exist since 2016.
One group backing Shapiro’s proposal is the Pennsylvania Cannabis Coalition, which advocates for “safe cannabis use and sensible policy.” In a statement issued to The Post-Gazette, the group noted that “with 32 active grower/processors, almost 200 dispensaries and more than 25,000 employees, the current medical marijuana industry is ready to deliver safe, regulated cannabis on day-one while generating revenue for the Commonwealth immediately,”
The fact that recreational marijuana is still federally illegal adds to the skepticism expressed by Senate Republican leaders about the Governor’s proposal. Marijuana remains classified as a Schedule I substance under the Controlled Substances Act, making distribution a federal offense.
Republican Kim Ward who serves as President Pro Tempore of the Senate stated that the Governor planned to cover spending increases “while relying on imaginary revenue streams.”
🚨 PA taxpayers deserve a responsible budget, not
reckless spending!@GovernorShapiro's plan increases
spending by 8% while relying on imaginary funding streams.🚫 @PASenateGOP won't let PA families foot a $27B bill for bad math!
🔗: Read more here: https://t.co/8Z8kz7NUno
— Sen. Kim Ward (@SenatorKimWard) February 5, 2025
Republicans control the State Senate, and the State House presently has an even split of 101 to 101 after a vacancy was created due to the death of Democrat Representative Matt Gergely. The vacancy is set to be filled at the end of March.
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