Pennsylvania Senate Kills House’s Cannabis Legalization Plan

Pennsylvania GOP senators indicated that while they support adult-use cannabis legalization in the commonwealth, a partisan bill passed out of the House is not the correct vehicle for reform.

Lawmakers in the Senate Law and Justice Committee voted, 7-3, on May 13 to kill House Bill 1200, legislation that aimed to establish a state-run dispensary model that the Democratic-controlled upper chamber passed entirely along party lines last week.

Sen. Dan Laughlin, R-Erie, who chairs the Law and Justice Committee, and who is working on bipartisan legislation with Sen. Sharif Street, D-Philadelphia, said during Tuesday’s hearing that while he agrees with the public smoking ban offered in H.B. 1200, the legislation simply had too many flaws to gain his support.

“I’ve made it pretty crystal clear that I do not believe that the state store model that is included in House Bill 1200 has a path through the Senate, let alone through this committee,” he said. “I really expected a little bit of back-and-forth discussions and work on these bills if we are going to truly put a product on the governor’s desk, and we are not going to get there with this model.”

The House-passed bill, sponsored by Reps. Rick Krajewski, D-Philadelphia, and Dan Frankel, D-Allegheny, had aimed to empower the Pennsylvania Liquor Control Board to oversee the state-run retail model by allowing federally illegal adult-use cannabis sales to coexist in state-licensed alcohol establishments.

Laughlin said he not only had concerns about state sales sending the wrong message to its citizens, but that Pennsylvania’s wine and spirit stores don’t have the appropriate square footage or security in place to properly run cannabis retail facilities. In addition, the committee chair said that establishing a Pennsylvania Cannabis Control Board would be paramount to overseeing the successful rollout of a regulated and licensed marketplace.

Furthermore, Laughlin said a state-run model would not only undermine “hundreds of millions” in financial investments that the state’s medical cannabis businesses have made into market infrastructure, but it would cause small businesses and social equity entrepreneurs to forgo future investments in an otherwise free-market approach.

Laughlin projected that a state-run model would put Pennsylvania roughly $250 million to $300 million in the hole from the get-go, while commencing adult-use sales through private businesses would generate state revenue from the onset.

“We’re in a budget deficit, and this adult-use cannabis gets discussed frequently as a revenue generator,” he said. “[This bill] just does not seem like the right path to go on when the private market is ready, willing and able to pick up where we pass cannabis and get to work and not cost the state a penny and actually generate revenue right out of the gate.”

Sens. Devlin Robinson, R-Allegheny, and Kim Ward, R-Westmoreland, also shined a light on what they said were shortcomings of the House Democrats’ plan.

Specifically, Robinson said he was concerned about the state directly participating in a market that collides with the federal Controlled Substances Act.

“I don’t know how, then, the Pennsylvania State Treasury would be able to be involved in the sale of a federally illegal substance,” he said. “I don’t see it anywhere in this bill, how we’re going to pay for the brick-and-mortar stores throughout the state.”

Ward piggybacked on that comment.

“How do we pay state employees with money that is coming from a federally illegal entity or action?” the Senate president pro tempore questioned. “How do we pay state employees? We’re going to pay ‘em in cash?”

Meanwhile, Sen. Marty Flynn, D-Lackawanna, said he supported the bill because Pennsylvania has dragged its feet on adult-use legalization while its bordering states, including New York, Ohio, Maryland, New Jersey and Delaware, have all taken advantage of regulating and taxing sales to those 21 years and older.

Flynn also pointed to the commonwealth facing a potential multibillion-dollar budget deficit, indicating that a projected $500 million in annual taxes and profits under H.B. 1200 could close that gap.

“The majority of people want to see legal marijuana for adult use. That’s what the polls say,” he said. “So, it’s time we in the Pennsylvania Senate do what the people want. And I know it’s a huge process, but naming bridges gets old. Let’s do something.”

Sen. Lisa Boscola, D-Lehigh, broke from her party to vote against the bill, saying that while she supports adult-use legalization, she’d rather get behind Laughlin and Streets’ forthcoming proposal.

“The constituents that I represent are basically in favor,” she said. “So, for me, this is a no-brainer, but this bill is not the one that I can support today. I don’t think it’s a serious attempt to advance legalizing marijuana legislation, and I know it has no chance of passing the Senate. So, until we get a little bit more serious, and you show me a bill that can pass the Senate, and we can all support—I’ll be there for you on this issue. I just can’t do it today. I need a better bill.”

Meanwhile, Sen. Tartaglio, D-Philadelphia, said that while she would prefer the forthcoming Laughlin-Street proposal, she supported H.B. 1200 in Tuesday’s committee vote, urging colleagues to use it as a starting point.

“This bill is here. We need to sit down all four caucuses and come up with something that we can all live with,” she said. “This is a start, and we can build on this. Think of it as a vehicle that we can use.”

Laughlin and Street introduced a bipartisan plan and circulated a sponsorship memo in February for their forthcoming adult-use legalization bill following Democratic Gov. Josh Shapiro’s call for reform in his state budget address. At the time, Laughlin was critical of the governor’s 26% tax proposal on cannabis sales, calling it “excessive.”

As Pennsylvania lawmakers navigate the possibility of becoming the first divided Legislature to legalize adult-use cannabis, Laughlin leaned into Shapiro once again during this week’s committee hearing.

“I believe that if there’s a path to getting adult-use cannabis passed, the governor himself is going to have to roll his sleeves up and help do some of the work,” Laughlin said. “I have not seen that yet, but hopefully we can get there, and I know it’s going to be a vigorously discussed process. So, I look forward to working with everybody in this room to try and get this to a passable version through the Senate, through the House, and off to the governor.”