Politics
Pennsylvania Lawmakers Take Marijuana Industry Testimony On Market Launch Timing, Equity And Taxes At Legalization Hearing
Pennsylvania lawmakers have convened another hearing on marijuana legalization issues—this time focusing on the industry perspective, with multiple stakeholders from cannabis growing, dispensing and testing businesses, as well as clinical registrants, testifying.
Members of the House Health Subcommittee on Health Care took up cannabis policy reform at Monday’s meeting, which marked the panel’s third hearing centered on marijuana legalization in recent months.
Representatives of multi-state operators such as Cresco Labs, Trulieve, PharmaCann and INSA participated in the discussion. They advised lawmakers about regulatory considerations, including the need to balance equity with expediency in the legalization rollout as well as concerns about local opt-out rules.
“From the outset, my personal goals for adult-use has been to put health and safety of our constituents first and to allow for equitable and meaningful opportunities, particularly for those harmed by the war on drugs,” Rep. Dan Frankel (D), chair of the full Health Committee who previously sponsored cannabis legalization legislation, said at the beginning of the hearing.
“We’re still in the infancy of cannabis legislation. And there’s great uncertainty about how future federal actions might affect state markets, but we know that they will,” he said. “We want to establish a market that is sustainable not only for the next three to five years, but for the next 10 to 20 years.”
Rep. Kathy Rapp (R), ranking member of the subcommittee, said that while she understands leadership is pushing for legalization, “from what I’m seeing across the nation, I am not one at this at this time to jump on the bandwagon.”
“I have a lot of concerns, especially for our students. Mental health is a huge crisis in the state of Pennsylvania and, quite frankly, across the nation,” she said. “So I am very concerned about what legalization would do to the youth in this state and this Commonwealth.”
There were several recurring themes that emerged in the stakeholder discussion, with industry representatives stressing the need to avoid the experiences of states such as New York where the implementation of legalization has dragged on amid litigation and regulators’ efforts to prioritize equity licensees, for example.
There was also an emphasis on ensuring that the regulated market is created in a way that’s competitive, including setting a tax rate on cannabis products that generates revenue but isn’t so high that consumers avoid transitioning to the legal industry.
Stakeholders also voiced concern about competition from businesses currently selling hemp-based intoxicating cannabinoid products such as delta-8 THC.
“They create no good jobs. They build no lasting infrastructure, and they pay little to no taxes,” Cresco executive John Sullivan argued. “The worst part is, with no regulation, it is virtually impossible to stop” the unregulated market.
Sullivan also advised lawmakers at one point that any cannabis legislation should not legalize possession ahead of the launch of regulated adult-use sales—a comment that some advocates pushed back against, saying it would unnecessarily perpetuate criminalization.
Members of the @PaHouseDems and @PAHouseGOP should be clear what they just heard from Cresco. They're a-ok with arresting thousands of consumers to protect their profits. https://t.co/AWihMzvx8Z
— Andy Hoover (@freedomsfriend) February 5, 2024
Several witnesses also pushed for a legalization model that allows existing medical cannabis dispensaries to quickly transition to hybrid retailers that can also serve adult consumers—with more than one arguing that New York is a model not to follow while praising the relative quick market launch that occurred in Maryland following passage of legalization legislation.
At the same time, however, some lawmakers voiced interest in developing a program that minimizes the risk of corporate consolidation and provides pathways for people from communities harmed by the war on drugs to prosper in the legal industry.
Chris Ferguson, vice president of government affairs for Verano who testified on behalf of their Pennsylvania-based affiliate Agronomed Biologics, told the panel that they should consider the state’s medical cannabis program a “foundational framework” for recreational legalization.
“One significant aspect to consider is the regulatory oversight. Pennsylvania has stringent regulations governing the current medical marijuana program, and extending these to the adult-use would maintain consistency and uphold public safety standards,” he said.
While Pennsylvania lawmakers have put forward legalization bills in the past, it’s not clear what might serve as the vehicle for reform this year. But Frankel, the full committee chair, said despite opposition from some of his colleagues, legalization is “inevitable.”
“The fact of the matter is we have a cannabis marketplace here… It’s not going anywhere. We’re not going to eliminate it,” he said. “Law enforcement has been completely ineffective over the years and has marginalized many communities in our state. This hasn’t worked.”
At the subcommittee’s last cannabis meeting in December, members heard testimony and asked questions about various elements of marijuana oversight, including promoting social equity and business opportunities, laboratory testing and public versus private operation of a state-legal cannabis industry.
During the panel’s first meeting late last year, Frankel said that state-run stores are “certainly an option” he’s considering for Pennsylvania, similar to what New Hampshire Gov. Chris Sununu (R) recommended for that state last year, though a state commission later shied away from that plan.
Pennsylvania Gov. Josh Shapiro (D), meanwhile, has long advocated for marijuana legalization in the Keystone State, urging members of the divided legislature to come together and deliver a reform bill to his desk. He renewed that call after voters in neighboring Ohio passed a legalization initiative at the ballot last November.
One Republican member of the subcommittee suggested on Monday that Shapiro will again push for legalization as part of a budget proposal he’s expected to unveil on Tuesday.
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U.S. Sen. John Fetterman (D-PA) also recently complained that Pennsylvania is being “lapped” on marijuana policy as other states in the region enact legalization.
Meanwhile, Pennsylvania lawmakers recently advanced a pair of bills meant to prevent police from charging medical cannabis patients with impaired driving without proof of intoxication.
In December, the governor signed a bill to allow all licensed medical marijuana grower-processors in the state to serve as retailers and sell their cannabis products directly to patients. Independent dispensaries could also start cultivating their own marijuana.
A poll released last week found that about two-thirds of Pennsylvania voters in the state support enacting marijuana legalization.
Photo courtesy of Mike Latimer.
