Governor Josh Shapiro has introduced a $51.5 billion budget plan for 2025-26, which includes a major push to legalize recreational cannabis. His goal is to bring in more money for the state and keep up with neighboring states that have already legalized marijuana.
Plan for Cannabis Legalization
The governor’s budget includes a plan to legalize recreational marijuana for adults. It proposes a 20% tax on the wholesale price of cannabis products, similar to last year’s suggestion. Officials estimate this could bring in about $536.5 million in the first year. This revenue would come from taxes on cannabis sales, licensing fees, and retail sales tax.
Shapiro has made it clear that some of this money—about $52.2 million—would go toward social equity programs. These programs would help small businesses, especially those owned by minorities, get started in the cannabis industry.
Budget Deficit and Economic Impact
Pennsylvania is facing a growing budget deficit, which could reach $2.4 billion by 2026-27 and as much as $6.7 billion by 2029-30. The revenue from legal cannabis is expected to help close this gap without raising personal income or sales taxes.
To keep public services running while new revenue sources are established, Shapiro also plans to use $4.5 billion from the state’s reserve funds. This approach would help cover immediate budget needs while preparing for future financial stability.
Political Challenges and Lawmakers’ Reactions
For the plan to move forward, the Pennsylvania legislature must approve it. The state’s House is controlled by Democrats, while Republicans have a majority in the Senate. Many Republican leaders have resisted legalization in the past, arguing that marijuana laws should be handled at the federal level.
However, some Republicans, such as State Senator Dan Laughlin from Erie County, support legalization. Laughlin, along with Democratic Senator Sharif Street, introduced a bill in 2021 that aimed to legalize cannabis for adults, clear past marijuana-related convictions, and allow medical marijuana patients to grow their own plants.
Representative Dan Frankel, who chairs the House Health Committee, supports Shapiro’s plan and says lawmakers are ready to start voting on legalization. He also stressed the importance of creating a system that benefits small businesses and farmers rather than just large corporations.
Pennsylvania and Neighboring States
Most states surrounding Pennsylvania—except West Virginia—have already legalized recreational cannabis. Many Pennsylvanians travel to these states to buy cannabis, meaning Pennsylvania is missing out on tax revenue. Legalization could keep more money in the state.
Public opinion is also shifting in favor of legalization. Supporters argue that legal cannabis would boost the economy, create jobs, and reduce the number of people convicted for nonviolent marijuana offenses. The governor’s plan includes funding for programs to help those affected by past cannabis-related arrests.
What’s Next?
Shapiro’s budget proposal could significantly change Pennsylvania’s economy and cannabis laws. If lawmakers approve the plan, the state could see a major financial boost while also addressing social equity concerns. However, with political opposition still present, debates over the proposal are expected to be intense in the coming months.