Pennsylvania is facing a massive budget shortfall, and the answer to fixing it may be right across state lines. As billions of dollars slip away to neighboring states with legal cannabis markets, lawmakers are under increasing pressure to act. The push to legalize adult-use marijuana in Pennsylvania has never looked more urgent—or more likely.
Budget Woes Force a Hard Look at Cannabis Revenue
The state’s budget deficit could reach $3.7 billion, leaving officials scrambling for solutions. With few easy fixes, tax revenue from regulated marijuana sales is emerging as an attractive option.
Governor Josh Shapiro has already signaled his intentions. In his upcoming Feb. 4 budget address, he’s expected to push lawmakers once again to legalize adult-use cannabis. This time, with the weight of a budget crisis behind him, the effort might finally gain the traction it needs.
Some of Pennsylvania’s biggest medical cannabis operators are making their case, too. At a January fundraiser for Shapiro, industry leaders pointed to a glaring problem: Up to 60% of customers at adult-use dispensaries in Maryland, New Jersey, and Ohio are Pennsylvania residents.
That means millions in lost revenue—not just for local businesses, but for the state itself.
A Shift in Tone and Urgency
For years, legalization has been on the table but never quite within reach. Now, advocates say the conversation has changed.
“There was this understanding that adult use is coming, but it wasn’t happening. Whereas now, the mood and tone have shifted to, ‘Adult use is happening, and this is probably our best year to get it done,’” said Peter Marcus, vice president of communications at Terrapin Care Station, which runs a dispensary in Bellefonte.
At the January fundraiser, Shapiro reportedly struck a more urgent tone. Operators expect him to repeat that same sense of immediacy during his budget address.
“It was, ‘This needs to happen, this needs to happen,’” Marcus recalled.
For an industry still reeling from a bruising November defeat in Florida—where nearly $150 million was spent on a failed ballot initiative—Pennsylvania represents a rare bright spot.
“Pennsylvania presents one of the clearest opportunities and pathways for major reform available right now at the state level,” said Michael Bronstein, a lobbyist and key fundraiser organizer.
Shapiro, he predicted, is “going to go all-in for legalization,” and the Legislature will take it seriously this time.
A Huge Market Waiting to Be Tapped
Pennsylvania isn’t just another state looking at legalization—it’s one of the biggest prizes left in the country.
With nearly 13 million residents, it’s home to major universities, two massive metropolitan areas in Philadelphia and Pittsburgh, and a medical marijuana program that is already thriving.
Here’s a snapshot of Pennsylvania’s medical cannabis market today:
| Category | Number/Value |
|---|---|
| Active MMJ Patients | 440,000 |
| Dispensaries | 186 |
| Grower-Processors | 32 |
| Monthly MMJ Sales (Oct 2023) | $140 million |
| Projected 2024 MMJ Sales | $1.7 billion |
Those numbers are just the starting point. If Pennsylvania opens the doors to recreational cannabis, sales could explode.
- A report from FTI Consulting, commissioned by advocacy group Responsible PA, estimates first-year adult-use sales could surpass $2.8 billion.
- The state could rake in $212 million in tax revenue, assuming a 6% sales tax and a 15% excise tax.
That’s money that could help close Pennsylvania’s budget gap instead of funding schools and roads in Maryland, New Jersey, and Ohio.
‘We’re Losing Out to Other States’
Governor Shapiro has been blunt about the economic reality.
“To me, this really comes down to two issues that the Legislature has to grapple with,” he told reporters last week.
“Are we going to be more competitive? Because right now, we’re losing out to every other state around us that’s legalized, the exception of West Virginia.
“Pennsylvanians are buying cannabis. But right now, what’s happening is they’re paying taxes in other states.
“We need to change that. We need to be more competitive.”
It’s a message that’s likely to resonate with lawmakers, who will soon be tasked with plugging a multi-billion-dollar budget hole.
What Legalization Could Look Like
While no final proposal has been put forward yet, past legislative efforts provide a roadmap for what an adult-use market in Pennsylvania might look like.
Previous bills have included:
- Allowing existing medical cannabis dispensaries to transition to adult-use sales.
- Selling recreational marijuana through state-run stores, similar to Pennsylvania’s liquor system.
Legislators who support legalization say they plan to revisit these proposals in 2025. Given the current momentum, the timing could finally be right.
For Pennsylvania cannabis operators, the stakes couldn’t be higher. As money continues to flow across state borders, the pressure on lawmakers is only building. The question isn’t whether legalization is coming—but how soon the state will make it happen.