Will Pennsylvania’s Legislative Leadership Consider Adult-Use Cannabis Proposals This Year?: Legalization Watch

Will Pennsylvania’s Legislative Leadership Consider Adult-Use Cannabis Proposals This Year?: Legalization Watch

Despite strong support from the governor, lieutenant governor and the public, advocates say legalization lacks the backing it needs from key lawmakers.

February 26, 2020

With three adult-use cannabis legalization bills pending in the legislature and strong support from the governor, lieutenant governor and the public, Pennsylvania should have no problem legalizing this year, but advocates say leadership in the legislature will likely block any proposals from advancing before the current two-year session ends in December.

Gov. Tom Wolf announced his support for adult-use cannabis legalization last fall alongside Lt. Gov. John Fetterman. Wolf then attended New York Gov. Andrew Cuomo’s Regional Cannabis Regulation and Vaping Summit in October, where the pair met with the governors of New Jersey and Connecticut in an effort to coordinate the states’ approach to cannabis policy reform.

Fetterman embarked on a recreational marijuana listening tour last year to get public input on the issue from all 67 Pennsylvania counties, and reported that he found strong public support for legalization.

Lawmakers took notice of the momentum.

Pennsylvania Rep. Jake Wheatley has announced plans to introduce the state’s newest legalization proposal in the form of House Bill 2050. The legislation aims to lower the initial application and licensing fees in an effort to make the market more accessible for businesses, and would impose a 10% wholesale tax on business-to-business transactions, although cannabis growers and processors that have partnered with an existing Pennsylvania farm would be exempt from the tax.

H.B. 2050 also levies a graduated excise tax on cannabis, which would start at 6% and increase to 12% after two years and to 19% after four years. The tax revenue generated would be used for student loan reimbursement and after school programs, among other efforts.

Wheatley’s bill also includes criminal and social justice components that would decriminalize the possession of cannabis and expunge past cannabis-related offenses.

H.B. 2050 is a revised version of House Bill 50, which Wheatley introduced last year, and which has not gained any traction in the legislature. Once Wheatley’s new bill is formally introduced, its next stop will likely be the House Health Committee, where H.B. 50 was sent last year.

“It certainly sounds like it has a lot of great provisions,” Karen O’Keefe, director of state policies for the Marijuana Policy Project (MPP), tells Cannabis Business Times. “The money would go to things like mixed income housing and grants for women- and minority-owned businesses, and it would include expungement and release, all of which are things we support.”

Pennsylvania Sens. Daylin Leach and Sharif Street are spearheading a legalization proposal in the Senate this year in the form of Senate Bill 350, which also keeps small business development and social equity at the forefront of its regulatory provisions.

“Sen. Leach was one of the prime sponsors of our medical marijuana bill, so he’s been advocating for a while,” Patrick Nightingale, executive director of Pittsburgh NORML and partner of cannabis law firm Cannabis Legal Solutions, tells Cannabis Business Times.

H.B. 2050 and S.B. 350 both allow for smaller, Pennsylvania-owned start-ups to be commercially viable in an adult-use cannabis market, he adds.

“I think some of the pushback that we have gotten is … Pennsylvania’s medical program basically created a monopoly for a small number of cultivators and dispensary license holders with a very high price point,” Nightingale says. “It was very tough to get one of these licenses, and we saw that it basically squeezed Pennsylvania farmers or small businesspeople out. Both Rep. Wheatley’s bill and Sen. Street’s bill aim to address that with tiered licenses, micro licenses and some home-grow components so that people, if they so choose, do not have to only purchase from state-licensed distribution.”

Home grow is a must for any sort of adult-use cannabis market in the state, he says, adding that a home-grow provision should also be added to the Pennsylvania’s medical cannabis law to increase patient access.

“We have over 250,000 registered patients, but the prices of the cannabis products, generally speaking, are double [the cost], if not higher, than product … available on the black market. So, Pennsylvania patients, especially patients of limited means, have found themselves in a difficult position of not being able to afford their own medicine. If we have a full adult-use marketplace with regulated cultivation and distribution, we may or may not see some of these high prices and … home grow is something we will not budge on. We must have home grow.”

The criminal justice components of H.B. 2050 and S.B. 350 are also key, he adds. “Those would also call for restorative justice in the form of expungements for people convicted of cannabis possession or conduct that would be legal under the bills. So, if you’re busted growing a few plants, you could also have that expunged from your record.”

Nightingale is also encouraged by the allocation of cannabis tax revenue in the two proposals. “Instead of just letting the revenue raised from this disappear into the general fund, both bills would earmark that revenue to go to certain specific expenses—property tax relief is a big one.”

Rep. David Delloso has also proposed legislation in the House to legalize adult-use cannabis, although his bill, House Bill 1899, would distribute cannabis through state-run stores.

“That’s not something that has a lot of support among activists or even among legislators,” Nightingale says.

MPP also has concerns about a state-run model.

“If a bill is only state-run, then there are federal concerns because marijuana is still federally illegal,” O’Keefe says. “For example, we haven’t seen the federal government prosecuting people for involvement in marijuana for some time where it’s state legal, but that could be a barrier for many reasons to the state actually getting a program up and running. The state would have pretty severe legal risks if they had state workers openly committing state felonies every day.”

Utah originally proposed state-run cannabis businesses for its medical cannabis program, and MPP urged lawmakers then to at least include the option of privately-run businesses in its cannabis law.

“So, they did, [the bill included] both [models], and then last year, two DEA [agents] came out and said, ‘This is federally illegal [and] this will put people at risk,’ so [lawmakers] removed the state-run provision and now it’s only privately run, even though the state legislature really wanted to do [a state-run model].”

Also pending in the legislature this year is Senate Bill 527, which would place an adult-use legalization initiative on Pennsylvania’s ballot to let voters decide on the issue. Pennsylvania does not allow citizens to petition for ballot initiatives, so any legalization efforts must come from the legislature, O’Keefe says.

Although the leadership in the House and Senate seems unwilling to even kick the issue to the voters, O’Keefe says MPP will continue to monitor legalization efforts in the state and broadly support policy reform.

“Our goal is to remove cannabis prohibition and replace it with a sensible regulatory structure,” she says. “We do favor provisions to promote equity to make sure there’s inclusion and diversity in the industry and … that some of the funds go to the communities hard hit by the war on drugs. Those are all things that we favor, but we support a broad array of bills.”

Unfortunately, since adult-use cannabis legalization lacks the support it needs from the leadership in both the House and Senate, Nightingale says it is unlikely that any of these bills will advance this year.

“In Pennsylvania, much like the United States Congress, the majority party sets the legislative agenda,” he says. “The Republicans are in the majority, so they control committee assignments, they control the legislative agenda, and Republican leadership in both the House and the Senate has said, ‘Under no circumstances are we taking up adult-use legalization.’ We have no Republican co-sponsors. The chair of the House Judiciary Committee will not even have a hearing on a Republican-sponsored decriminalization bill. If we don’t have Republican leadership support, these bills will go nowhere, and I do not anticipate a hearing or a vote on … adult-use [bills] in 2020. I expect them to … die in committee.”

Without sufficient support for adult-use legalization, Nightingale is turning his attention toward decriminalization efforts this year. Two bills in the House and one in the Senate aim to address decriminalization, he says.

“We understand that, politically speaking, we don’t really have the support in order to pass [the adult-use] legislation, but we still are working hard to protect Pennsylvanians and we think that decriminalization would be an excellent opportunity in the short term because we do have bipartisan support,” he says. “We have a Republican-sponsored decriminalization bill in the House, we have bipartisan support for Sen. Street’s decriminalization bill pending in the Senate, and even Pennsylvania’s conservative District Attorneys Association has supported decriminalization. There’s no reason that 20,000 Pennsylvanians should find themselves in the criminal justice system every year over the small possession of marijuana.”

MPP has been putting its resources behind email alerts in the state to raise awareness and urge the public to support the bills, O’Keefe says, but the organization has not dedicated a lobbyist to the state this year.

“The leadership in both of the legislative chambers, which are Republicans, have not been supportive of the bills getting a vote,” she says. “They made it clear last year that there was no way legislation was going to get a vote, so it’s not looking all that likely that it will pass this year, but certainly, it helps move the conversation forward for the day when it is possible to pass.”

And it is an election year, O’Keefe adds, so control in the Senate and House could shift this fall. “If the legislature refuses to act on it, of course voters can keep that in mind in November and come 2021, they might have leadership that’s more in line with where voters are."