Pennsylvania could have a unique state-run cannabis model (2025)

A proposal to legalize recreational cannabis in Pennsylvania would create the nation's first state-run cannabis program.

Why it matters: Some lawmakers want the state to sell cannabis using a model similar to its liquor store model as a means to combat issues with private dispensaries like a lack of small-business investment and overly strong cannabis products.

Driving the news: A bill to legalize and sell cannabis through state-run dispensaries operated by the Liquor Control Board was passed Wednesday in the state House by a 102-101 vote, with all Democrats supporting and all Republicans opposing.

• The bill is co-sponsored by state Reps. Rick Krajewski (D-Philadelphia) and Dan Frankel (D-Pittsburgh).

Context: Pennsylvania legalized medical cannabis use in 2016 and has private dispensaries sell and distribute products to licensed patients.

• The proposed recreational program would disrupt that model and instead create dispensaries within current Fine Wine & Good Spirits stores or new state-run dispensaries, Frankel told Axios.
• The 24 other states where recreational cannabis is legal sell it through private dispensaries.

What they're saying: Frankel and Krajewski held hearings before introducing their bill, and Frankel said they learned many other states have failed to address some issues with private dispensaries.

• Cannabis products elsewhere are sold with THC levels above lawmakers' liking, he said.
• Some small, locally owned dispensaries have been purchased by Big Cannabis companies like Trulieve and Cresco Labs, which Frankel said he wants to avoid.
• "We need something that creates genuine small-business opportunities," he said.

By the numbers: There are about 575 Fine Wine & Good Spirits stores throughout Pennsylvania, and Frankel said more could be created to sell only cannabis.

• He said that would provide access in rural areas where private dispensaries might not operate because it could be unprofitable.

Friction point: The cannabis industry opposes a state-store model because it would likely shut down current medical dispensaries, potentially opening the state up to lawsuits, and could drag out the transition to recreational use, said Jack Weber, co-owner of Keystone Cannabis Representative Agency.

• He said many companies have already invested in private dispensaries through the medical law, and they are equipped to easily transition into a recreational model.

• "They can turn on the lights the next day," he said.

The other side: Senate Republicans appear to have zero appetite for a state-run bill.

• State Sen. Dan Laughlin (R-Erie), a supporter of recreational cannabis and chair of the Senate committee charged with weed policy, told reporters in Harrisburg on Tuesday that "if a bill comes over that sells cannabis out of state stores, it's going in the trash."
• State Reps. Emily Kinkead (D-Pittsburgh) and Abby Major (R-Armstrong) are working on a recreational cannabis bill to have private dispensary sales with the aim of winning over Republicans.

The intrigue: Gov. Josh Shapiro said he would sign a bill and supports legalization to help fill the state's looming structural deficit.

Yes, but: Frankel said he thinks some conservative Republicans could end up supporting a state-run bill because it could have more control over public health outcomes, like limiting access and lowering THC levels in products.

What's next: The bill now goes to the Republican-controlled state Senate.

• Supporters hope the bill will pass before lawmakers' target June 30 budget deadline, Krajewski told SpotlightPA this week.