Legal Recreational Marijuana Could Net $41-million in Tax Revenue

HARRISBURG – The Philadelphia Inquirer is reporting… , Legal recreational marijuana in Pennsylvania could net up to $41 million in tax revenue in its first full year of sales if implemented as proposed in Gov. Josh Shapiro’s budget plan, a newly released analysis found.

And as Pennsylvania’s recreational marijuana market gets up and running, that figure could increase to an estimated $271 million by fiscal year 2028-29, according to the state’s Independent Fiscal Office. The group last week released an analysis of Shapiro’s budget, which calls for a 20% wholesale tax on recreational marijuana.

Shapiro’s estimates were more conservative, with a projected $14.8 million in tax revenue coming from recreational cannabis in the first year. That figure was projected to grow to about $250 million once the market is “up and running,” the governor’s office said in a February statement.

It wasn’t immediately clear why the fiscal office’s estimates were so much higher. A representative from the office did not immediately respond to request for comment.

But, the analysis indicated, that estimate likely would have been higher had Pennsylvania legalized recreational marijuana earlier. All of the commonwealth’s neighboring states — save for West Virginia — have legalized marijuana for adult use, while Pennsylvania currently only allows medical marijuana, which requires certification from a doctor to utilize.

“Because nearly all border states already tax recreational cannabis, the estimate is not increased for cross border sales that may have occurred in other states that were first to tax recreational marijuana in a region,” the office wrote.

New Jersey, for example, began adult-use marijuana sales in 2022. Cannabis leaders in the state expect it will surpass $1 billion in marijuana sales this year.

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