Will Pot be Cash Cow for Pennsylvania?

Posted on Posted in Blog, Uncategorized

, MARCH 6, 2017 —  Published by: The Tribune-Democrat


HARRISBURG – Pennsylvania Auditor General Eugene DePasquale said on Monday the state could generate $200 million a year by legalizing the recreational use of marijuana and raking in the tax revenue from the sale of the drug.

DePasquale said that as recreational marijuana has become legal in more states, it’s becoming clearer that states can effectively regulate the process to mitigate potential problems.

With the state struggling to find a way to close a multi-billion deficit, the extra money could be put to good use, he said.

It’s also becoming clearer that the public is open to the move, he said.

“The public is moving in this direction,” DePasquale said. “We aren’t rushing into anything.”

Eight states have legalized the recreational use of marijuana — California, Colorado, Maine, Massachusetts, Nevada, Oregon and Washington. In many of those states, the legalization came about after voters approved ballot measures.

“It’s hard to find a case where it’s been on the ballot where it didn’t pass,” DePasquale said. He added that several states neighboring Pennsylvania have begun to flirt with the idea of relaxing their marijuana laws.

DePasquale based his $200 million revenue estimate on the windfall in Colorado. That state got $129 million in tax revenue from recreational marijuana, last year. But Colorado’s has only half the population of Pennsylvania, DePasquale said.

The suggestion comes a week after U.S. Attorney General Jeff Sessions had warned that the Department of Justice will consider whether it should take action against states that are flouting federal drug laws by relaxing marijuana laws.

DePasquale said he doesn’t believe the attorney general’s opposition should prevent the state from acting. He said it’s unlikely the federal government would be willing to do something as unpopular as trying to roll back state marijuana laws.

“If you think other things have started a backlash, if they start doing raids on people following the laws in their states, they are going to see a backlash unlike anything we’ve ever seen,” DePasquale said.

The idea also faces substantial headwinds at the Capitol.

Gov. Tom Wolf supports decriminalizing the possession of small amounts of marijuana, his spokesman J.J. Abbott said. The governor has stopped short of backing completely legalizing the recreational use of marijuana.

“The governor wants further study of the impact and implementation of full legalization on other states like Colorado before proceeding with that approach in Pennsylvania,” Abbott said.

The Pennsylvania District Attorneys Association is opposed to both legalizing marijuana for recreational use and decriminalizing possession of small amounts of the drug, said Richard Long, executive director of the prosecutors’ group. Long said the DAs considered the issue of marijuana legalization as the state examined medical marijuana.

The prosecutors group has been pushing for more efficient ways to quickly resolve cases involving possession of small amounts marijuana, he said.

Long described this as “streamlining” the process so that cases are concluded at the district magistrate’s court without having to involve a county judge.

“That’s a bit of fallacy, that prisons are filled with people who were arrested for possession,” he said.

State Rep. Tedd Nesbit, R-Mercer County, said it doesn’t feel like a good time to relax drug laws when the state is reeling from an opioid and heroin abuse epidemic. Nesbit is a member of the House judiciary committee.

He wasn’t the only elected official to suggest the timing of the idea is bad.

DePasquale’s call comes as the state’s move to open the door to the medical use of marijuana is just getting underway.

One of the lawmakers who led the campaign to get medical marijuana legalized said the time’s not right to make the jump to legalizing the recreational use of marijuana.

State Sen. Mike Folmer, R-Lebanon County, said DePasquale “brought up rational points.” Folmer said one concern is that some of the most obstinate opposition to medical marijuana came from people who asserted that the medical marijuana lobby was just a pretext to open the door to broader relaxation of drug laws, Folmer said.

“Down the road, the debate will come up,” Folmer said. “But I’m not bringing it up.”

His opposition mainly centers on fear that the push for recreational marijuana legalization would interfere with efforts to establish an effective medical marijuana program in Pennsylvania.

Folmer said that most states that have relaxed marijuana laws gave their residents access to medical marijuana years ago. Pennsylvania has yet to directly help a single patient with medical marijuana.

“We need to concentrate on medical marijuana,” he said. “I need that program to be successful.”

Shifting attention to recreational marijuana would “muddy the waters,” Folmer said.

The deadline for applications from prospective growers and processors is March 20.

Estimates created by legislative analysts projected that the state would get between $10 million and $20 million in application fees from medical marijuana growers, dispensaries and patients. The state would also get $20 million and $40 million a year in revenue from a 6 percent tax on the sale of medical marijuana.

DePasquale said he recognizes that the idea of relaxing the law to allow recreational use of marijuana would be controversial. But, recent history shows that public sentiment can get the government to embrace change more quickly than expected.

“You don’t know if you don’t try,” he said. “And in 2006, if I’d have said that by 2016 in Pennsylvania we’d have marriage equality and medical marijuana, you’d have thought I was crazy.”


John Finnerty is based in Harrisburg and covers state government and politics. Follow him on Twitter @CNHIPA.