Summary 

Legalizes the purchase, possession, and personal use of up to one ounce of cannabis by adults 21 years of age or older. Legal possession would be limited to five grams for cannabis resin and an equivalency to an ounce of cannabis for concentrates based on a calculation by the Cannabis Regulatory Board. 

Smoking or consumption of cannabis in public places would be prohibited. This would apply to public places where smoking is already prohibited under state law.

“Cannabis” as defined for the purpose of legalizing personal use by adults does not include medical marijuana dispensed to a certified patient in PA. The powers and responsibilities of the Department of Health under Medical Marijuana Law would be transferred to the Cannabis Regulatory Control Board.

Cannabis Regulatory Board

Establishes the Cannabis Regulatory Board and outlines membership and procedural requirements for the board. The board would possess the sole regulatory authority over the development, regulation, and enforcement of any activity related to the cultivation, processing, distribution, storing, testing, transporting, delivery, and retail sale of cannabis products for personal use in the state. Under this bill, the board is responsible for the approval and revocation of any license issued for the cultivation, processing, distribution, or sale of cannabis.

Taxation

The tax on cultivating cannabis and processing cannabis products is at a rate of 7% of the gross receipts from the first sale. This tax is imposed solely on the cannabis cultivator, processor, or microbusiness selling the product.

The excise tax rate imposed on the sale of cannabis products to consumers is 13% of the purchase price of each retail sale. The tax would be required to be itemized separately and be reflected in the retail price displayed to consumers.

An additional tax is imposed on the sale or transfer of cannabis and cannabis products by a cannabis, processor, or microbusiness licensee at the rate of 1% of the amount charged by the licensee for cities having a population of 1,000,000 or more or a county. For cities with a population of 1,000,000 or less the rate is 3% of the amount charged. Municipalities are permitted to prohibit licensed cannabis establishments and impose taxes, provided they do not exceed 2% of the receipts from sale. All money received would be deposited into the Cannabis Revenue Fund.

Expungement

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This bill requires the criminal history record information of a person who has been arrested, indicted, or convicted of a violation involving cannabis to be expunged, including for persons currently incarcerated for crimes that would otherwise be legal under this bill.

Homegrow for Medical Marijuana Patients

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This bill would permit individuals that hold a valid PA medical marijuana card and are at least 21 years of age to do the following: (1) Apply to the board for a home cultivation permit authorizing the individual to plant, cultivate, harvest, dry, process or otherwise possess cannabis plants, with a limit of three mature cannabis plants and three immature cannabis plants, without holding a cannabis cultivator license or cannabis processor license under this act; and (2) Plant, cultivate, harvest, dry, process or possess, within the individual's private residence or on the grounds of the individual's private residence, no more than three mature cannabis plants and three immature cannabis plants at any one time.

Home cultivation would be prohibited from occurring anywhere except an enclose area within a private residence. Individuals would be required to purchase cannabis seeds from a cannabis retailer or dispensary, and cultivation must only occur on a property owned by the individual or with consent of the owner. This bill establishes that individuals may apply to the board for a home cultivation permit. The fee for the permit is $100 annually.

Licensing

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This bill would establish the following licensing fees: $50,000 for a cannabis processor license; $30,000 for a cannabis retailer license; and $20,000 for a cannabis microbusiness license. A cannabis cultivator license fee would be based on the tier at which the organization applies and by multiplying the square feet of indoor or outdoor canopy used by the applicant by $1.00. Any applicant that qualifies as a social and economic equity applicant would have their licensing fee reduced by 50%. A licensee would be required to pay a renewal fee in the sum of $25,000 for a cannabis processor, $15,000 for a cannabis retailer, and the product of the total square footage multiplied by 50 cents for a cultivator. All licenses would require the significant involvement of at least one individual who has resided in the state for at least two years.

The board would be required to issue up to 293 cannabis retailer licenses as follows: at least one cannabis retailer license per legislative district; and 90 at-large cannabis retailer licenses of which 75% shall be designated for:

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• qualified social and economic equity applicants;

• diverse businesses and disadvantaged businesses, service-disabled veteran-owned small businesses and veteran-owned small businesses and disadvantaged farmer-owned small businesses; and

• small businesses that are located or proposed to be in a designated opportunity zone.

At least eight of the at-large cannabis retailer licenses must be designated for persons certified as clinical registrants under the Medical Marijuana Act. This permits medical marijuana organizations licensed under medical marijuana law to apply for an expedited approval cannabis entity license for each location. This application requires a nonrefundable license fee of $30,000 for a dispensary application, and a fee calculated under the provisions established above for a cultivation license. This would also require contributions to the social and economic equity plans.

Medical marijuana organizations that hold a dispensary permit and an expedited approval cannabis entity license are permitted to file an application for approval to operate a cannabis establishment as a cannabis retailer at a secondary site. This would be required to be a separate license to the expedited approval cannabis entity license and required to be located within the same region as the original dispensary. 

Medical marijuana organizations would be permitted to file a separate secondary site application for each valid dispensary permit held by the organization but prohibited from being awarded more than 3 expedited approval licenses. This would require a nonrefundable cannabis business development fee of $200,000 to be deposited into the Cannabis Business Development Fund in addition to the licensing fee of $30,000. For renewal of the license the fee would be $15,000.

Cannabis Microbusinesses

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This bill establishes cannabis microbusiness licenses. Applicants for a microbusiness license must have 100% of their ownership interest held by residents of the state who have resided here for at least 3 years and are prohibited from having more than 10 full-time or part-time employees. Cannabis microbusinesses are permitted to contain up to 5,000 square feet of canopy space for plants in the flowering stage and the board is authorized to increase or decrease the space in increments of 3,000 square feet based on capacity and demand, provided the canopy space does not exceed 14,000 square feet.

Cannabis Cultivator

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A cannabis cultivator license authorizes the acquisition, possession, distribution, delivery, cultivation, and sale of cannabis from the licensed cannabis establishment of a licensed cannabis cultivator to a duly licensed cannabis processor, cannabis microbusiness or cannabis retailer in this Commonwealth. Cannabis cultivators would be permitted to engage in processing without the need to acquire a processor license subject to regulations by the board and inclusion of processing plans in the license application. No person is permitted to hold an ownership interest in more than three cannabis cultivator licenses under law. Canopy space would be prohibited from being greater than 125,000 square feet for plants in the flowering stage.

This bill would permit the board to initially issue up to 750 cannabis cultivator licenses, a percentage of which must be conditional licenses, and 25% designated for cannabis microbusinesses. The board would be permitted to issue more licenses subject to market demand.

Cannabis cultivator licenses would be established in a tiered system as follows: (1) Tier 1 for up to 5,000 feet; (2) tier 2 for up to 10,000 feet; (3) tier 3 for up to 20,000 feet; (4) tier 4 for up to 30,000 feet; (5) tier 5 for up to 40,000 feet; (6) tier 6 for up to 50,000 feet; (7) tier 7 for up to 60,000 feet; (8) tier 8 for up to 70,000 feet; (9) tier 9 for up to 80,000 feet; (10) tier 10 for up to 90,000 feet; (11) tier 11 for up to 125,000 feet. Cannabis cultivators would be permitted to apply for upgrades or downgrades in their licensing tiers.

Cannabis Processor

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This license authorizes the entity to acquire cannabis from a cannabis cultivator and process and sell cannabis to a cannabis retailer, microbusiness, or another processor. The licensee is permitted to share the licensed premises with a cannabis cultivator licensee provided that each licensee stores money and product in a separate vault or all licensees sharing vault space share more than 50% of the same ownership.

The board is permitted to issue up to 150 cannabis processor licenses of which a significant amount must be conditional licenses and 25% designated for microbusinesses.

Cannabis Retailer

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A cannabis retailer license authorizes the acquisition, possession, sale, offering for sale and delivery of cannabis and cannabis products from the cannabis establishment of the licensed cannabis retailer to cannabis consumers. Cannabis retailers would be prohibited within 1,000 feet of a school, park, playground, rec center, library, church, or any place where children predominantly congregate.

Social and Economic Equity

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A Social and Economic Equity office would be established within the regulatory board. The office would be responsible for promoting inclusion and participation in the regulated cannabis industry by persons from socially and economically disadvantaged communities, including certifying a business as a diverse or disadvantaged business. This would include veteran owned businesses and farmer owned businesses. This would also require the establishment of a social and economic equity loan and grant program to provide financial assistance to social and economic equity applicants. If a social and economic equity cannabis entity transferred their license to an entity that no longer qualified, the acquiring person would be responsible for payment of the waived fees in certain amounts.