“We’re just trying to get it done, whatever that path looks like.”
By Ian Karbal, Pennsylvania Capital-Star
Cannabis legalization is sparking a big debate in Harrisburg.
In less than two weeks, three sets of lawmakers, including members of both parties, have proposed legislation that would legalize recreational marijuana in Pennsylvania. The discussion follows on the heels of a Democratic-led effort in May that passed the state House before being rejected in the Republican-controlled Senate.
The moves come as lawmakers push further past their June 30 deadline to deliver a state budget, and the commonwealth faces a deficit. That is unless legislators cut services or find new revenue.
But Senate Majority Leader Joe Pittman (R-Indiana) has said it’s unlikely legal cannabis emerges as part of a final budget deal.
As a heavily regulated industry, any cannabis bill ultimately signed into law could significantly shape the business landscape in Pennsylvania, and determine who stands to benefit from it.
For some, it’s a chance to help disproportionately impacted communities rebuild after years of disinvestment and incarceration. A 2020 study conducted by the American Civil Liberties Union found Black Pennsylvanians were more than three times as likely as whites to be charged for cannabis-related crimes, despite surveys reporting roughly the same rate of use of the drug.
For others, the nascent cannabis industry is an opportunity for small business owners to get into one of the fastest-growing industries globally while it’s still in its early days.
Both arguments have been central to a series of pro-legalization pushes in Harrisburg over the last year, echoed by the industry, lawmakers and grassroots advocates.
“Legalizing adult-use cannabis is no longer just a smart option—it’s a fiscal and moral necessity,” said Brit Crampsie, a spokesperson for the cannabis industry trade group Responsible PA, following the introduction of a bipartisan bill in the state Senate. “Pennsylvania is staring down a massive budget shortfall, and this legislation offers a real solution: new revenue, safer communities, support for small businesses and long-overdue justice. Lawmakers must act now.”
Rep. Emily Kinkead (D-Allegheny), the Democratic sponsor of a bipartisan House bill said in a statement, “we’re talking about creating thousands of jobs, generating billions in revenue, and reinvesting in our communities.”
But Pennsylvania’s medical cannabis market is already dominated by so-called multi-state operators, many of which are among the largest cannabis companies in the country. Looking at Pennsylvania’s most recent proposals, it’s unclear if their impacts can measure up to the lofty promises made by proponents.
In the weed(s) on permitting
When New Jersey legalized recreational marijuana in 2021, Tahir Johnson, 41, was ecstatic. The bill signed into law was intended to help people like him, who had previous cannabis charges, enter the legal market on the ground floor. And he already had dreams of running a dispensary in his hometown of Trenton.
Johnson, who had a background in finance and was working in Maryland’s nascent cannabis industry, was one of the first 11 candidates to have a dispensary license approved through New Jersey’s equity licensing program. The initiative created a priority application process for people with cannabis convictions or from economically disadvantaged communities.
Johnson checked both boxes.
“It allowed me to raise capital, get a good location and all those things,” Johnson said of the state’s equity program.
But it didn’t take long for road blocks to arise. First, there was the problem of financing. Most major banks are hesitant to give out loans to cannabis businesses because it’s still federally illegal. Then, there were local regulators.
By the time his dispensary finally opened last year, more than two years after he first received his license, the market was dominated by vertically integrated cannabis companies with more financing and experience after making millions in other states.
While his business is growing and about to hit its one-year anniversary, Johnson believes he’s one of the lucky ones, and that many would-be entrepreneurs like him were simply locked out of the market. But despite the setbacks he faced, he believes there’s a lot that Pennsylvania can learn from New Jersey, for better and for worse.
According to a 2025 report, while 17 percent of cannabis-related business licenses in New Jersey have gone to majority-Black owned businesses, only 10 percent of the state’s dispensaries are Black-owned. That number is higher than many other states with legal cannabis programs, including those that have attempted to institute equity programs. It’s also double the national rate, where less than 5 percent of cannabis business owners identify as Black.
Looking at the current proposals in Pennsylvania, Johnson took issue with the approach to social equity in Senate Bill 120, which was introduced last week by Sens. Dan Laughlin (R-Erie) and Sharif Street (D-Philadelphia). Rep. Amen Brown (D-Philadelphia) announced plans to introduce an identical bill in the state House.
Street, the bill’s primary Democratic champion in the Senate, said social equity through investment in communities hit hardest by prohibition is one of the guiding principles behind the legislation. Though these measures are exactly where Johnson and other advocates for minority participation in the cannabis industry say it falls short.
The measure sets aside 15 dedicated business licenses in the first year for businesses owned by Pennsylvanians from what it calls “disproportionately impacted areas.” Those are defined by poverty rates and economic indicators, like how many families receive food assistance.
Small businesses owned primarily by people from these areas would have to pay a $50,000 non-refundable fee in order to apply for a business license—half the price non-qualifying businesses would be charged. In order to have an application approved, they’d also have to show that they either own or control the real estate where they plan to open their dispensary.
Because of how New Jersey’s law was written, Johnson didn’t have to put up money or buy property before his business application could be approved. If he’d had to meet the requirements set out in Senate Bill 120, Johnson isn’t sure he would have been able to get to where he is.
“There may be some folks who have $50,000, but I think the people that they’re intending to help will not,” he said. “I think setting that high of a barrier also opens those people up to predatory businesses, where you may have some people who have sold their whole business just to get the funds for their application.”
Johnson also took issue with Senate Bill 120’s approach to licensing for existing medical dispensaries.
An analysis of state Department of Health data shows that nearly all of the 190 licensed medical dispensaries currently selling cannabis in Pennsylvania are owned by multi-state organizations, including some of the country’s largest cannabis companies
Companies like Cresco Labs, Curaleaf and Green Thumb Industries, which all own multiple medical dispensaries in the state, have a hand in growing, manufacturing and selling marijuana products, and have market caps over a billion dollars.
With cannabis federally illegal, even large companies generally have to grow cannabis in the states they sell it. If that were to change, however, cultivation could be consolidated in a handful of locations.
Senate Bill 120 would allow those companies to apply for permits to convert their medical dispensaries for recreational sale, and let their parent companies open up to 24 locations in Pennsylvania.
Johnson worries that small business owners won’t be able to get dispensaries off the ground until the state’s recreational cannabis market is dominated by the companies that already control the medical market.
When he first received one of the first licenses, 12 medical operations run by multi-state companies were allowed to begin recreational sales. By the time he was able to open his small business, they had dozens of locations.
“That was the biggest thing that’s really impacted my trajectory,” Johnson said.
Street defended his bill’s approach, noting it allows the state to offer low-interest loans and grants to qualifying entrepreneurs. The proposal does not clarify whether those state-backed, low- or zero-interest loans could be used on a business application itself or a real estate purchase for a business that hasn’t received a license. But a spokesperson for Laughlin said it’s something the state could decide to allow if it’s necessary.
“We wanted to be able to create opportunities for a disadvantaged community,” Street said.
Rep. Amen Brown (D-Philadelphia), who announced plans to introduce an identical bill in the House, acknowledged there were shortcomings in the measure’s approach to social equity for would-be business owners.
However, he said any legalization bill has to pass the Republican-controlled Senate. If no proposal passes, that means no small business opportunities for anyone. And, maybe more importantly, it would mean no expungement of cannabis charges and no new revenue for the state, which is facing spending cuts.
“You can’t go so far to where you turn folks off,” he said. “I support our bill because we believe it’s a fair piece that Senate Republicans can agree to.”
House Bill 120, introduced by Kinkead and Rep. Abby Major (R-Armstrong), takes a similar, but slightly different approach to equity.
It sets aside 60 so-called equity licenses for people from areas most impacted by prohibition. What counts as a disproportionately impacted area will be left up to a new cannabis board made up of appointees, but the measure suggests considering the relative rate of cannabis arrests and charges. These licenses could also go to businesses owned by veterans or with 75 percent control by people who have been arrested for non-violent cannabis charges or have family who have.
Application fees would be waived for these businesses and, unlike anyone else applying for a dispensary license, they would only have to prove they have an option to buy or lease the real estate where they plan to operate. That would significantly lower the initial investment for qualifying business owners.
“The first licenses that go out are for social equity,” Kinkead said. And she stressed that the bill, like others, would establish a clean slate program for people with existing cannabis charges.
The bill would also allow existing medical dispensaries to apply to become recreational sellers, but they couldn’t expand beyond their existing locations on the same license.
Major, the bill’s Republican co-sponsor, acknowledged that some of the differences in approach may come down to the caucuses that the bills’ lead sponsors belong to in their respective chambers.
“We’re just trying to get it done, whatever that path looks like,” she said.
The state store approach
A third approach to legalizing cannabis narrowly passed the Democratic-controlled House on party lines in May, before facing bipartisan rejection in a Senate subcommittee.
It would have seen cannabis sold in state stores, like liquor, effectively eliminating private dispensaries from the picture.
The bill faced strong pushback from the state’s medical cannabis industry.
It was also greeted with skepticism by grassroots advocates, who say any legalization bill must include support for entrepreneurs most affected by policies dating back to the war on drugs era.
“I’m totally opposed to a state store model because of the limitations it presents for equity and small, independent businesses,” said Cherron Perry-Thomas, founder of the Diasporic Alliance for Cannabis Opportunities, an organization that promotes Black participation in the cannabis industry.
Perry-Thomas also stressed that, even though she finds Street and Laughlin’s bill a step forward, ideally a bill establishing a private store model should include broader support for business owners impacted by the war on drugs.
But the state store bill’s sponsors, Reps. Dan Frankel (D-Allegheny) and Rick Krajewski (D-Philadelphia), emphasized it would also have provided opportunities for small businesses owners to grow and deliver cannabis, or to establish marijuana lounges and bars.
Frankel said that, in states that have already legalized, small businesses that grow cannabis or manufacture products like edibles have had a hard time competing with national companies, or even getting their products on the shelves at some of the larger chain dispensaries.
State stores, he said, would be able to purchase and feature products grown and manufactured by small Pennsylvania businesses, and could set minimum prices that would allow them to be more competitive.
“It’s really to create the basis for a market that would allow Pennsylvania farmers, growers and processors to have the opportunity to sell their products,” Frankel said. “The multi-state operators, we saw with what they’ve done in other states. No one could get products on the shelves of their dispensaries.”
But Sen. Street took issue with the state store approach.
“It’s far more expensive to start a grower/processor business than it is to start up a dispensary,” he said. “And if the government owns all the dispensaries, you’ve pretty much eliminated most of the meaningful opportunities for small business owners, whether they be Black, white or whoever.”
Ultimately, expanding the powers of the state Liquor Control Board and establishing a new set of state stores proved politically unpopular among lawmakers, who rejected the idea, and the public, according to a cannabis industry-backed poll.
Identify goals and work backwards
Beau Kilmer, the director of drug policy at the non partisan think tank, RAND Institute, said the focus on legalization as an opportunity for small cannabis businesses may be misguided.
“If one of your primary goals is to potentially build wealth in certain communities, it might make more sense to make a state store model and then designate some of that money into incubators to help those people start other businesses,” Kilmer said
That’s in part because of the volatility of the industry itself. In many states that have legalized, cannabis prices have rapidly dropped, making it harder and harder for smaller businesses to survive.
Jon Caulkins, a professor at Carnegie Mellon’s Heinz College of Public Policy, who consulted the sponsors of the state store bill, frequently used the word “roadkill” to describe what has happened to small businesses as the industry has consolidated.
“This emphasis on the little guys is a little like King Canute trying to sweep back the ocean,” Caulkins said. “The idea that [legalization is] going to lead to comfortable retirements for a lot of people who would otherwise be poor is just naive for lawmakers who believe that, and it’s disingenuous for the industry.”
He pointed to states like California and Colorado, among the first to legalize recreational cannabis. They’ve seen their markets dominated by large, vertically-integrated and private equity-backed cannabis companies.
“The dominant story now is people who put their life’s savings into investing in this business are going bankrupt,” Caulkins said.
For both Kilmer and Caulkins, none of that is to say lawmakers shouldn’t legalize cannabis, but they emphasized lawmakers should consider their ultimate goals and work backwards.
Both stressed there are other ways to help communities that have seen a disproportionate number of cannabis arrests. That includes expunging previous cannabis charges, which all three recent proposals provide for on some level.
“From the general public policy perspective, the meat and potatoes and the guts of the policy proposal matter way more,” Caulkins said, referring to the emphasis on opportunities for small business. “If we look at the part of legalization that may eliminate criminal records of people who have been convicted in the past of cannabis violations in Pennsylvania, that’s gonna benefit tens of thousands of people.”
This story was first published by the Pennsylvania Capital-Star.
Photo courtesy of Chris Wallis // Side Pocket Images.
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