Pennsylvania’s medical marijuana market could someday reach hundreds of millions of dollars in annual sales.
It is not there yet.
State-specific revenue is hard to come by in the medical cannabis industry. And most companies in the field are privately held, so they do not report numbers publicly.
But there is a hint in Pennsylvania’s tax-collection records.
By the end of July, the state had collected $60,086.16 in medical marijuana taxes, according to revenue and receipts reports from the Pennsylvania Department of Revenue. The money comes from a 5 percent levy assessed on gross receipts from sales by growers and processors to dispensers. There is no additional tax charged at the point of sale to patients.
Growers and processors pay the tax on a quarterly basis, according to the revenue department, with deadlines coming at the end of January, April, July and October.
The state’s first dispensaries opened in mid February. Assuming everyone paid the tax on time and in full, Pennsylvania’s 12 growers and processors sold slightly more than $1.2 million worth of medical marijuana by the end of April 2018.
On an annualized basis with full quarters of operation, that would mean at least $5 million in sales, though the quarterly figures are likely to rise as more patients choose treatment via medical marijuana. The state also is adding more grower/processors, bringing the total to 25.
One company with operations in Pennsylvania, Chicago-based Green Thumb Industries, recently went public in Canada and said its 2017 revenue exceeded $20 million in 2017. Its dispensaries operate under the RISE brand, and it also is a manufacturer, with operations in Florida, Maryland, Massachusetts, Nevada and Ohio, in addition to the Keystone state.
Trade publication Marijuana Business Daily estimates that the Pennsylvania market could exceed $100 million in annual sales in a few years based on a patient base of 100,000 to 200,000 people.
According to the Pennsylvania Department of Health, more than 60,000 patients have registered for the state’s medical marijuana program and nearly 38,000 had obtained medical marijuana identification cards allowing them to purchase cannabis for treatment
Another analysis – by a pair of research firms called New Frontier Data and Arcview Market Research – puts the potential size of Pennsylvania’s market at $700 million in annual sales by 2020.
That could mean up to $35 million in annual tax revenue, depending on how much of the total comes from growers/processors as opposed to retail dispensaries.
Either way, it is short of the revenue some officials say could be collected from the legalization of recreational marijuana in Pennsylvania. In July Auditor General Eugene DePasquale estimated the tax haul would be at least $581 million.