Politics
Pennsylvania Dispensaries Omitted From Medical Marijuana Industry 280E Tax Relief Due To Drafting Error In Bill Governor Signed
When the Pennsylvania legislature approved a budget bill that the governor has since signed into law, lawmakers accidentally left medical marijuana dispensaries out of a section providing tax relief for the cannabis industry. And it’s not clear if the omission can be fixed without future legislative action.
As enacted, the marijuana provision will allow other licensee types such as growers and processors to take state tax deductions equivalent to what they’re denied under the federal Internal Revenue Service (IRS) code known as 280E. But while legislators intended to include dispensaries as well, there was a drafting error that was overlooked as the bill moved through the process.
The Legislative Reference Bureau (LRB), which is responsible for formatting legislation to ensure it complies with statute, evidently returned a copy of the legislation with the dispensary omission late last month, a staffer for House Finance Committee Chairman Steve Samuelson (D) told Marijuana Moment on Monday.
“As each draft got ‘turned,’ legislative staff does their best to catch any errors. On this occasion, we missed the omission,” Committee Executive Director Mark Foreman said. “Starting in the next draft, and each ‘turn’ thereafter, it got easy to miss and more unlikely to be noticed as it was not marked as an area having any changes.”
There is a LRB process for correcting legitimate requested drafting mistakes. But because this error wasn’t caught before the bill was signed into law by Gov. Josh Shapiro (D) last week, it may be the case that lawmakers will need to pass separate legislation in order to give dispensaries the state-level tax relief.
“In my almost 20 years working for the Legislature, I’ve never encountered a corrective reprint being needed post Governor’s signature,” Foreman said. “We are working with our counterparts and the LRB to determine if it’s possible in this case.”
The Finance Committee chairman did list dispensaries among the medical marijuana entities that would be eligible for the state tax deductions while describing the overall legislation on the floor last week. It just wasn’t reflected in the bill text that legislators advanced and Shapiro signed.
Samuelson had also introduced a standalone marijuana industry tax bill that advanced through the House in 2022 and did include dispensaries under the definition of an eligible “medical cannabis businesses.”
Meredith Buettner, executive director of Pennsylvania Cannabis Coalition, told Marijuana Moment that advocates remain “hopeful that the LRB will issue a corrective reprint in the coming days to ensure that the legislative intent of SB 654 can be experienced by all medical marijuana operators regardless of license type.”
The budget legislation contained another omission—this one intentional—that also disappointed advocates. It did not contain language to legalize marijuana for adult use, despite that reform being requested in the governor’s own budget request.
This comes amid heightened discussions about legalizing cannabis in the legislature, with hearings, bill introductions and press conferences highlighting the need to enact the policy change, especially as surrounding states move ahead.
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At a press briefing last week, the chair of the Pennsylvania Legislative Black Caucus seemed to temper expectations about the potential timeline of passing legalization legislation, pointing out that the rest of the session will likely be too politically charged heading into the November election to get the job done this year.
Other lawmakers have emphasized the urgency of legalizing as soon as possible given regional dynamics, while signaling that legislators are close to aligning House and Senate proposals.
Separately, Pennsylvania’s prior governor separately signed a bill into law in July 2022 that included provisions to protect banks and insurers in the state that work with licensed medical marijuana businesses.
Meanwhile, Pennsylvania Sens. Dan Laughlin (R) and Sharif Street (D) introduced another bill to legalize marijuana in the state last year, but it has not moved yet.
Another measure to allow all licensed medical marijuana grower-processors in the state to sell their cannabis products directly to patients cleared the Senate in September, and it’s now pending House committee action.
Black lawmakers discussed the need to ensure equity considerations are at the center of any marijuana legalization plan at a conference last month.
