A new economic report projects that Pennsylvania could generate more than $2.1 billion in cannabis tax revenue within five years if the state enacts adult-use marijuana legalization. The findings come as lawmakers continue debating multiple legalization proposals in the state legislature.
The analysis, released by the state’s Independent Fiscal Office (IFO), evaluated the potential fiscal impact of legalizing and taxing recreational cannabis sales. The estimates include revenue from a 6 percent sales tax and a proposed 15 percent excise tax on marijuana products, similar to what other adult-use states have implemented.
According to the report, Pennsylvania could earn between $400 million and $500 million annually by year five of a fully implemented legal market. These funds could significantly boost the state’s general budget or be allocated to education, health care, criminal justice reform, or community reinvestment programs.
The IFO based its projections on retail activity in comparable states such as Michigan, Illinois, and New York, adjusting for Pennsylvania’s population and economic structure. The report also factored in the size of the state’s existing medical marijuana program, which already has over 700,000 registered patients.
Supporters of legalization argue that these numbers make a strong case for swift legislative action—not just to capture economic benefits, but to bring Pennsylvania in line with neighboring states like New Jersey and Maryland, which have already legalized recreational cannabis.
Critics of legalization remain concerned about public health, impaired driving, and youth access, but the report underscores that regulated markets can provide oversight, consumer safety, and economic opportunity.
With bipartisan support slowly growing in Harrisburg and the potential for billions in new revenue, the momentum toward legalization in Pennsylvania appears to be gaining traction.
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