Summary

This bill legalizes cannabis for recreational use by adults that are at least 21 years old. The possession limits for personal use would be 30 grams for flower, no more than 500 milligrams of THC contained in cannabis-infused products, and five grams of cannabis concentrate. Cannabis-infused products would include edibles.

Cannabis Regulatory Board

The bill establishes The Cannabis Regulatory Board to have regulatory authority over the recreational cannabis market in Pennsylvania. This includes the cultivation, processing, transportation, dispensing, and use of cannabis. The board would be responsible for issuing regulations related to permit applications, diversity requirements, combining the medical use and adult use program, seed-to-sale and inventory tracking procedures, transportation requirements, labeling requirements, marketing restrictions, and product safety standards. The board would be required to issue temporary regulations no later than 6 months following the effective date of this bill.

Taxation

The bill would impose a sales tax of 6% of the sales price for cannabis products sold to anyone other than a cannabis establishment. There would be an additional excise tax imposed on dispensaries at a rate of 10% of the sale price. The tax revenue would be deposited to the cannabis regulation fund to be used as follows: (1) 2% of gross receipts of the revenue for administrative purposes; (2) $3,000,000 annually to the cannabis business development fund; and (3) the remainder to the state general fund. Counties and municipalities would receive additional tax revenue as well.

Expungement

Any individual charged or convicted with a cannabis related offense is required to have their criminal history expunged. Any individual that is eligible for expungement who is currently incarcerated is required to be released. Any individual who possesses a suspended license for cannabis related offenses is required to have their driver’s license reinstated.

Licensing

Permits for cultivation/processing, micro cultivation, dispensing, and testing would be issued by the board. The board would be responsible for developing the license application process.

Medical Marijuana Organizations

A licensed medical marijuana grower/processor may apply for an adult use cultivation permit. This permit would permit the grower to operate at up to 2 locations. The permit fee would be $100,000.

Medical marijuana dispensaries and clinical registrants may apply for an equal number of adult use dispensing organization permits. The application fee would be $25,000. Medical marijuana and recreational marijuana would be permitted to be dispensed from the same location. Medical marijuana dispensaries that are licensed as recreational dispensaries are required to partner with a social and economic equity applicant to provide financial and operational support to the applicant.

Cultivation Permits

The board would be permitted to modify or change the number of adult use cultivation permits available, but at no time may it exceed 5 permits, other than the ones issued to medical marijuana growers. This bill establishes application requirements for an applicant for a new adult use cultivation permit that is not a licensed medical marijuana grower. The board would set the fee for the application.

Micro Cultivation Center Permits

The board is permitted to issue up to 100 micro cultivation center permits by July 1, 2022, and up to an additional 50 micro cultivation center permits by July 1, 2023. The board is also permitted to alter the number of permits issued and eliminate barriers for the issuance of micro cultivation permits, provided that the maximum number of permits that can be issued is 300. The application fee for a permit would be $2,500.

The micro cultivation center cannot contain more than 3,000 square feet of canopy space for plants in the flowering stage. These cultivation facilities may share the premises with an adult use dispensary.

Dispensary Permits

The board would be required to issue up to 10 additional adult use dispensing permits prior to January 1, 2022. Any adult use permit would permit a dispensary to sell product to both recreational and medicinal users. The licensing application fee would be $5,000 for each license applied for. The bill would establish procedures for licensing applications and approval.

Social and Economic Equity Charter Permits

Medical marijuana dispensaries that are granted a permit to operate a recreational dispensary would be required to form a charter agreement with a social and economic equity applicant in which the adult use dispensary agrees to provide financial mentorship, training, and operational support. This would create social and economic equity dispensing organization charter permits. The agreement would be permitted to provide for a method of repayment for any loaned financial support under terms that allow social equity applicants to still profit. The adult use dispensing organization would be prohibited from taking more than a 10% ownership stake in a social equity licensee. The permit would change to an adult use dispensing organization permit after the social equity holder has assumed full ownership and control of the facility.

Social and Economic Equity Program

The Commonwealth Financing Authority would be responsible for implementing the social and economic equity provisions of the bill. The Authority would issue an annual report on diversity goals for the industry. The cannabis business development fund would consist of certain fees collected. The fund would provide low-interest rate loans and grants to qualified social and economic equity applicants to pay for expenses to start and operate a cannabis business. The required permit application fee would be 50% waived for these applicants. If any approved social and economic equity applicant seeks to sell their business to a non-qualifying entity, that entity would be required to pay the licensing fee and the balance on any loans in full.

Medical marijuana growers that are issued an adult use cultivation license would be required to pay a fee equal to 5% of their total sales or $750,000 whichever is less, to the cannabis business development fund. These growers would also be required to do one of the following: (1) contribute 5% of total sales or $100,000, whichever is less, to the fund; (2) make a grant of 5% of total sales or $100,000 to a cannabis training or education program in the state; (3) donate $100,000 to a program that provides job training to recently incarcerated individuals; (4) host a cannabis business establishment incubator program to provide $100,000 and mentorship to a social and economic equity applicant; or (5) participate in a sponsorship program to provide an interest-free loan of at least $200,000 to a social and economic equity applicant without taking an ownership stake.

Homegrow

This bill permits any person who is a registered medical marijuana patient to cultivate up to 5 plants that are more than 5 inches tall. Cultivation would be required to take place in an enclosed, locked space and outside of public view that is on a residential property owned by the cultivator or with permission of the owner to cultivate. Patients would be permitted to purchase cannabis seeds from a dispensary to grow.

Employment

This bill would prohibit any occupational or professional licensing or permitting board from taking any action against an individual for the use of cannabis, provided the use does not impair the individual when they are practicing the licensed profession. Would not prohibit any employer from adopting reasonable zero tolerance, drug-free workplace policies or employment policies concerning testing.

Other Provisions

Would not prohibit or restrict any lawful purchaser of recreational cannabis from legal firearm ownership. Cannabis businesses would be permitted to advertise and market cannabis products, including through discounts and promotional programs. This bill would be effective upon approval.