Pennsylvania is closer to legalizing adult-use cannabis sales after Democrats flipped the previously Republican-controlled State Senate on election night.

Pennsylvania and Legal Adult-use Cannabis Sales

Many Democrats in Pennsylvania have been in favor of it for years. Their adult-use cannabis legalization bills previously were able to pass the Democratic-controlled House of Representatives but not the Republican-controlled State Senate.

Pennsylvania Governor Josh Shapiro (D) has also been in favor of legalization and won re-election. While in office, he has pushed more than once for the Republican Senate to pass legalization unsuccessfully.

Part of his argument for them to do so is that Pennsylvania is losing potential cannabis sales and tax revenue to New Jersey.

The Pennsylvania Democrats have tried to legalize before. Many House Democrats supported an adult-use cannabis legalization establishing state-run dispensaries the way liquor stores are operated in some states. The bill passed the Pennsylvania House but not the Pennsylvania Senate.

Pennsylvania already has a robust medical cannabis market. However, it does seem to be dominated by Multi-State Operators (MSOs) who own a few chains of dispensaries in the state.

“There’s a gravitational-like force towards consolidation in almost any industry,” former state senator and medical cannabis legalization champion Daylin Leach said.

PA Legalization Likely to Hurt NJ Cannabis Dispensary Sales

If they do indeed legalize adult-use cannabis sales, it will likely lead to a drastic decline in sales for New Jersey cannabis dispensaries on the Pennsylvania border of the Delaware River.

This will likely significantly affect many large MSOs and some independent dispensaries that have been well-positioned for the traffic thus far.

Lawyers, consultants, manufacturers, and cultivators might also be well-positioned to take advantage of it.

Other independent dispensaries less affected by it might see it as an opportunity to become a chain operating in multiple states.