By Ian Karbal | Pennsylvania Capital-Star
The legislature returned from recess Monday in Harrisburg, and a new bill aimed at legalizing cannabis was introduced by a bipartisan pair of legislators, Reps. Aaron Kaufer (R-Luzerne) and Emily Kinkead (D-Allegheny).
Multiple cannabis legalization bills have been introduced across both chambers this session, of which House Bill 2500 is only the latest. None have been taken up by either the House or Senate yet, but advocates say that momentum is on their side. The trick will be figuring out the details.
“I think it’s really interesting and valuable to be having technical conversations,” said Brittany Crampsie, a spokesperson for Responsible PA, a pro-cannabis lobbying group that represents many of the companies currently operating medical dispensaries in Pennsylvania. “It’s not a matter of is Pennsylvania ever going to legalize? These technical questions are a matter of how and when.”
The provisions of House Bill 2500 have changed slightly since it was initially envisioned and its sponsors put out a memo on their intentions in June.
The bill would legalize cannabis for recreational adult use and place a tax on cannabis products. Revenue from those taxes would be distributed among several recipients, including municipalities that have cannabis dispensaries. Part of the tax proceeds would go toward a cannabis business establishment fund, and toward addiction prevention, recovery and treatment services.
The Pennsylvania Commission on Crime and Delinquency would receive and distribute funds to local law enforcement across the state and to indigent defense funds. Cannabis marketplace regulation would largely fall under the Department of Agriculture.
The bill would also allow Pennsylvanians with cannabis convictions to apply for expungement. People currently incarcerated on non-violent cannabis-related charges would be allowed to apply for resentencing and commutation as well.
Qualifying Pennsylvanians would be able to apply for state-sponsored grants and low-interest loans to start cannabis businesses. Majority-minority owned women-owned businesses and veteran-owned businesses would be given priority under the bill. And the state will have to produce an annual report on social equity in the state’s cannabis industry.
Existing dispensaries operating in the medical space would only be able to apply for an additional permit to open a single additional location. Advertising and sales would also be strictly limited near schools.
Proposals for legalizing cannabis in Pennsylvania have been floating around the legislature for years. Since Ohio voted to legalize marijuana and began sales in August, all of Pennsylvania’s neighbors, with the exception of West Virginia, now have recreational adult use programs.
Gov. Josh Shapiro has previously signaled his willingness to sign a cannabis legalization bill. He included potential revenue from a cannabis sales tax in his 2024 proposed budget. Ultimately, no such bill was passed.
Despite previous efforts having failed or stalled, Crampsie says she believes numerous factors make this moment different. For one, most pushback against cannabis legalization in Pennsylvania has come from Republicans. But former president Donald Trump, the GOP nominee for president, recently said he would support a legalization effort in his adopted home state of Florida.
Closer to home, analysts have warned that Pennsylvania’s surplus funds are set to run dry in the next several years after the latest state budget included billions of dollars in new education spending. And one potential way to balance the state’s books is to add a new source of revenue.
“There is never any appetite in the legislature to raise taxes,” said Crampsie. “As far as recurring revenue that is non-tax based, this is one of the only options on the table right now.”
H.B. 2500 includes both a 5% excise tax paid by cannabis sellers, as well as an 8% sales tax on commercial products.
Still, numerous details would have to be hashed out by lawmakers before a legalization bill could be passed.
The Legislative Black Caucus, for example, has called for any potential legalization bill to have strong equity-focused elements, like helping Black and other minority entrepreneurs enter the emerging market and using revenues to reinvest in communities most impacted by the war on drugs.
Under house Bill 2500, minority business owners and others impacted by the war on drugs could qualify for grants and low-interest loans for startups. However, there are no benchmarks for how much of the state’s cannabis industry should be owned or operated by social equity candidates.
The Legislative Black Caucus met Monday to discuss the bill. The caucus’ chair, Rep. Napoleon Nelson (D-Montgomery), said in an interview that H.B. 2500 is a “solid foundation.”
“It is fairly strong in its criminal justice and justice language,” Nelson said. “We certainly expect to see more development in terms of social equity and economic development policy.”
However, Nelson said he and the Legislative Black Caucus were not ready to endorse the bill, or to publicly call for specific policies that should be included or cut yet.
“Everything’s a negotiation,” Nelson said. “It’s not like there’s one thing that works perfectly, or that there are three more things that if we amend the bill with, then everybody’s perfectly happy. I don’t think we’re far.”
Moreover, Nelson said legislators are waiting on another expected legalization bill, from longtime legalization advocate Rep. Dan Frankel (D-Allegheny). That legislation would see cannabis sales restricted to state-run stores, like liquor.
Frankel was the chair of a House subcommittee that held numerous meetings last session to explore what legalization could look like in Pennsylvania. The meetings covered potential issues like how to regulate advertising, addressing public health concerns and ensuring small business owners are able to enter the market alongside established nationwide dispensary chains.
Responsible PA, which represents some of the largest dispensary chains in the country, has opposed a state-store model for legalization.
“To have the government say, ‘no, no, it’s legal now, but we’re the only ones that can sell it and profit from it,’ when certain communities have been disproportionately impacted by [criminalization], it’s just not fair,” Crampsie said.
Nelson said it would likely be an “uphill battle” for legislation creating a state store-model to get support of the Legislative Black Caucus. Though he did not rule out support for such a bill entirely “if it finds a way to still provide significant opportunities for minority entrepreneurship,” he said.
Testimony before the subcommittee on cannabis legalization earlier this year painted a picture of chain dispensaries dominating the respective markets, despite attempts to increase local ownership, particularly in minority communities.
“The state store model addresses a lot of potential problems in terms of public health and economic stability issues inherent to a new and volatile market, but it has drawbacks, too,” Frankel said through a spokesperson. “Other states have tried to use licenses to benefit communities most harmed by harsh drug laws, but have found that those licenses invariably still find their way to large out-of-state corporations. We’re working with leadership and important stakeholders like the LBC to find a consensus position.”
Frankel added that what the final bill looks like will be shaped by the outcome of ongoing negotiations “to determine the safest, most socially responsible, economically beneficial approach that will produce the best real benefits to those harmed under the current system and that can win enough votes to become law. We’ve held five hearings to learn from other states’ mistakes, which too often allowed the cannabis industry to write their own ticket — that’s not going to happen here [in] Pennsylvania.”
