Our opinion: Shaprio on high side with cannabis
Pennsyvania has been, shall we say, deliberate when it comes to legalizing the use of marijuana.
One thing that approach should mean is if the state decides to make the drug’s recreational use legal, it should be able to learn from other states’ mistakes. And one of the most common mistakes in other states’ legalization efforts is placing too high a tax on the product — and it’s a mistake Pennsylvania seems poised to repeat.
Gov. Josh Shapiro included an adult-use cannabis tax in his budget. That 20% wholesale tax assuming that sales would begin in January 2025 with the state projecting tax receipts of $16 million in 2024-25 and $189 million annually by 2027-28.
Only Washington, Virginia and Montana have excise taxes as high as the 20% Shapiro is proposing — and such high taxes can drive buyers from the legal market to the black market. It also runs the risk of driving consumers in Pennsylvania into lower-taxed areas that would include New York and Massachusetts, among others.
Legalized marijuana still has a long road to travel in Pennsylvania. The state Senate is still a hurdle to be cleared for legal marijuana advocates, and one has to wonder if there are enough votes for legalized marijuana in the state House of Representatives despite the slim Democratic Party majority in the chamber. In our opinion, that means Shapiro may have to be malleable if he wants to legalize marijuana for recreational use — and that likely means moving off of his 20% proposed tax rate.