How Pennsylvania’s economy can benefit from the legalization of recreational marijuana

How Pennsylvania’s economy can benefit from the legalization of recreational marijuana

Business is booming for dispensaries in Pennsylvania since the sale of medical marijuana went into effect last February.

According to a recent report by, medical marijuana dispensaries have grossed $132 million in total sales over the past year, while the Commonwealth has collected more than $2 million from growers and processors who pay a 5 percent excise tax on the gross receipts from medical marijuana sales to the dispensaries, per the state’s Medical Marijuana Program. Although Pennsylvania has clearly benefited from medical marijuana sales, it’s only a fraction of the impact that recreational marijuana sales could potentially have on the state’s economy.

While the legalization of recreational marijuana is still being hotly debated on both the state and federal levels, Pew Research Center polling shows that 62 percent of the country is in favor of legalizing cannabis for recreational adult use. Meanwhile, in Pennsylvania, a 2017 poll by Franklin & Marshall College shows that 59 percent of voters support legalization.

But what exactly are the benefits legalizing marijuana for recreational use? Generally speaking, states that have legalized recreational marijuana have seen huge economic gains, such as Colorado, which became the first state to do so when its citizens voted to legalize the use of recreational marijuana back in 2012.

The Colorado newspaper The Gazette recently reported that the state has seen huge economic growth since marijuana legalization went into effect. Recreational and medical marijuana sales hit a record $1.51 billion in 2017, generating “more economic output than 90 percent of all other industries in the state”.

Many other states have followed suit, with Washington, California, Oregon, Nevada, Alaska, Michigan, Vermont, Massachusetts, and Maine all having legalized recreational use in recent years. The total economic impact is a little bit harder to gauge than Colorado for many of these states, as some have only recently voted on the issue. But the excitement is certainly there. For example, according to a report by the Massachusetts Cannabis Control Commission, consumers in the state spent $2.2 million within the first five days of dispensaries being allowed to sell recreational marijuana last November. 

But what does this increase in taxable revenue on marijuana sales really mean? For Colorado, it’s resulted in the state having a surplus of resources that it never had before. It was reported by the Colorado Department of Revenue that the state has earned a revenue of $21,501,134 already in 2019, with a total of $927,009,550 in revenue since the state chose to legalize recreational marijuana in 2012. This has led to an increase in property value in the area, with the Economic Inquiry reporting that housing values have increased on average of around 6 percent.

As for what Pennsylvania can expect, State Auditor General Eugene DePasquale has already looked into the possibilities of what taxing revenue on recreational sales would look like, and he believes that the results would be very similar to Colorado. In a report DePasquale released back in July, he projected that the legalization of recreational marijuana would bring in $580 million dollars worth of taxable revenue for the state.

While the legalization of recreational marijuana is still to be determined in Pennsylvania, the data shows that it can only help to boost a state’s economy in the long run.