Pa. Gov. Insists On Legalizing, Taxing Pot For Virus Recovery

Pennsylvania's governor renewed his call Thursday for lawmakers to pass legislation legalizing and taxing recreational marijuana, saying it would provide a crucial infusion of tax revenue to assist businesses that are ailing from the COVID-19 pandemic.

Democratic Gov. Tom Wolf said at a news conference that he believes the pandemic should spur the Republican-led General Assembly to give serious consideration to legalizing recreational cannabis by taking up legislation that has been dormant in the Statehouse for about a year.

Wolf, who issued a similar plea to lawmakers last week, said revenue from legalized cannabis could fund grants to help small businesses recover from the pandemic. He estimated the state could see hundreds of millions of dollars flow into its coffers, citing 2018 revenue figures from Colorado and Washington, which respectively collected $266 million and $319 million in taxes on adult-use cannabis, while noting those states are smaller than Pennsylvania.

"Now more than ever, especially right in the middle of this pandemic, we have a desperate need for the economic boost that the legalization of cannabis could provide," Wolf said.

But key Republicans in the leadership of both the House and Senate were quick to indicate that their opposition to the proposal remains unchanged.

Kate Flessner, a spokeswoman for Senate President Pro Tempore Joe Scarnati, R-Brockway, told Law360 that the senator doesn't support legalizing recreational marijuana because he has long believed that doing so "comes with too many risks and unanswered questions."

Jason Gottesman, a spokesman for the House Republican caucus, said in a statement that Wolf should prioritize other elements of pandemic recovery rather than focusing on legalizing adult-use cannabis. Pennsylvania businesses, like those in many other states, have taken a financial hit during the spread of the novel coronavirus, which causes the respiratory illness COVID-19.

"Instead of legalizing drugs as a way to tax and spend on new government programs, the governor should work with the General Assembly to help get Pennsylvanians safely back to work, get our children … the best educational opportunities, and provide the return to normalcy Pennsylvanians long for," Gottesman said.

Wolf told reporters that he hasn't reached out to any Republicans directly to discuss his proposal, but added that he was inviting those negotiations to begin now after the plan hasn't gained any traction for about a year.

Lt. Gov. John Fetterman, a Democrat who joined Wolf at the news conference, told reporters that if Pennsylvania doesn't act, it is at risk of losing out on cannabis revenue to neighboring New Jersey, as a question to legalize the drug there will be on the Nov. 3 ballot.

Fetterman, who has openly supported recreational marijuana in the past, said 40% of Pennsylvania's population will be about a 30-minute drive away from being able to buy adult-use cannabis in another state if New Jersey's ballot question passes.

In addition to the tax revenue, Fetterman said that legalizing marijuana would benefit the some 250,000 residents who have been arrested in the past 10 years for possessing a drug that 11 states and the District of Columbia have legalized.

Wolf did not endorse any of the specific bills to legalize marijuana that have been filed, and told reporters that he would be open to suggestions about the legislation's specifics. Last week, he said he envisioned that marijuana would be sold in stores run by the state.

Wolf's office did not respond to questions from Law360 asking if he favors any of the existing bills or what proposed tax rate and structure for cannabis he would prefer.

Pennsylvania legalized medical marijuana in 2016, and the drug became available for patients in 2018. Jeff Riedy, the executive director of the Lehigh Valley chapter of the National Organization for the Reform of Marijuana Laws, which advocates for legalizing recreational cannabis, told Law360 that the medical marijuana legislation had bipartisan support, but that some Republicans who favored it are no longer in the Statehouse.

Riedy noted that Wolf and other supporters of legalizing the drug have acknowledged that Pennsylvania likely wouldn't see any tax revenue from adult-use cannabis for at least a year while the market would be built out. He said the immediate benefits of the legalization would be realized by residents who could have their criminal convictions for possessing small amounts of marijuana expunged, which Wolf and Fetterman have supported.

"I think legalization is a smart way to consider making some tax revenue for the state," Riedy said. "But overall, I think legalization is just a conversation that needs to be had now."

Senate Majority Leader Jake Corman, R-Bellefonte, indicated in a statement that he might be open to considering Wolf's proposal, but said that action on it would be unlikely in the coming months because lawmakers would need time to scrutinize its details. He said the revenue potential alone should not drive swift passage of a bill to legalize recreational marijuana.

"We look forward to receiving specifics about his broad concepts including who would regulate this new industry, where it would be sold, strategies for enforcement and plans to minimize the impacts on the medical marijuana industry," Corman said. "Like with any issue, a bill would need to work its way through the Senate committee process to be vetted."

--Additional reporting by Maria Koklanaris and Jack Queen. Editing by Vincent Sherry. 

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