Extras on Excise: Pennsylvania’s Medical Marijuana Prospects Are Looking “High”


A number of states may feature marijuana legalization initiatives on their ballots for the elections this November. However, the push for pot is also occurring in some states’ legislatures. In particular, efforts have made significant strides in the Pennsylvania legislature recently.

On April 12, the Pennsylvania Senate passed S.B. 3, which would legalize and regulate medical marijuana; the bill was referred to the House Rules Committee on April 13. First introduced early last year, S.B. 3 would establish a medical marijuana program dispensing the substance in specific forms, including pills, oil, topical applications and liquid. Patients would not be able to smoke it, unless the Medical Marijuana Advisory Board (also a creation of the bill) decides otherwise.

S.B. 3 proposes a 5 percent gross receipts tax on sales between growers/producers and dispensaries. The taxes would be due quarterly.

Growers and dispensaries would need to get permits before opening up for business. There are proposed capital requirements; growers must prove that they have at least $2 million in capital, and dispensaries must have at least $150,000 in capital under the program. Applicants would also pay fees for these licenses. The fees would be as follows:

Growers:

• $10,000 nonrefundable application fee

• $200,000 permit fee (valid for one year)

• $10,000 renewal fee 

Dispensaries:

• $5,000 nonrefundable application fee

• $30,000 permit fee (valid for one year)

• $5,000 renewal fee

• $250 relocation fee

Pennsylvania Gov. Tom Wolf (D) responded positively to this legislative activity. In a press release issued April 12, he stated that “[i]t is finally time to provide long overdue medical relief to patients and families who could benefit from the legalization of medical marijuana.”

If the House passes the bill and Wolf approves it, it will be effective 30 days after the governor signs the legislation.

According to a 2015 Marijuana Policy Project report, 12 of the states that legalized medical cannabis did so via state legislatures; the other half legalized the substance through ballot initiatives. Pennsylvania could become the 25th jurisdiction to legalize medical marijuana if S.B. 3 is successful.

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Do you think that the prospective Pennsylvania pot program is good policy?

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