Pennsylvania Marijuana Business

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What is the Demand for Marijuana in Pennsylvania?

An Official Report was released by the Pennsylvania Department of Health's Office of Medical Marijuana on May 15, 2020. It details the growth of marijuana since dispensing activities began on February 15, 2018. The report shows that 12,606,458 have been sold during 4,432,579 dispensing events. Being that only medical marijuana is legal for consumption in Pennsylvania, the only consumers recorded are registered patients with any of the 23 qualifying debilitating conditions. As of July 2021, Pennsylvania has 87 operational dispensaries in the state providing medication to patients. Some of these operational dispensaries have also expanded within their permitted locations. Hence the total number of dispensaries in the commonwealth is about 120. The Medical Marijuana Program has up to 356,000 patients and caregivers registered to get supplies of medical marijuana. The number of active certifications recorded was 205,000. On average, active cardholders visit dispensaries across the commonwealth more than once a month to get treatment.

The Media Section of the Health Department announced on June 25, 2020, that more than 14 million marijuana products had been sold since the beginning of the program, and the total sales within the program are over $1 billion. This figure includes the growers/processors sales to the dispensaries and the dispensaries sales to patients and caregivers. Pennsylvania has 26 growers/processors that are considered operational, and 15 of those actively ship marijuana to dispensaries.

As reported by Daily Times, medical marijuana sales in Pennsylvania amounted to more than $900 million between April 2020 and March 2021 during the COVID-19 pandemic. It was also reported that as of June 3, 2021, the Department of Health had registered up to 548,468 patients with 349,272 active certifications.

How is Marijuana Taxed in Pennsylvania?

The Pennsylvania Department of Revenue imposes gross receipts tax and income tax on medical marijuana in the state as authorized by Act 16 of 2016. The gross receipts tax applies to a marijuana firm's gross sales without deductions for the business's expenses, including costs of goods sold and compensation. The Department charges a 5% excise tax on the gross receipts generated when a grower/processor sells medical marijuana to a dispensary. Gross receipts are calculated by adding all marijuana plants and products sold during a particular financial period. Growers/processors and clinical registrant growers/processors across the state are obligated to pay this tax. They must quarterly remit medical marijuana gross receipts tax returns to the Pennsylvania Department of Revenue on or before the last day of January, April, July, and October. The taxes must be remitted even if no taxable sales occurred. The due dates can be found on form REV-1810 for the current year. Growers/processors can file and remit medical marijuana tax online by registering at myPATH. Persons who cannot pay via the electronic payment method must notify the Pennsylvania Department of Revenue at least 30 days preceding the payment due date. The department can be reached at (717) 787-8326.

The Department also requires growers/processors and dispensaries to pay income tax on profits earned. Depending on the business type, they must file and pay taxes like personal income tax or corporate net income tax.

All the money received from the tax imposed shall be deposited into the Medical Marijuana Program Fund. The revenue is allocated as follows:

  • The Health Department will receive 55% of the revenue in the fund, out of which 40% will be spent for operations of the department, outreach efforts, and other necessary projects. The department will use the remaining 15% to establish:

  • A program to help patients with the costs of providing medical marijuana to patients who demonstrate financial hardship or need;

  • A program to help patients and caregivers with the costs associated with the waiver or reduction of fees for identification cards under sections 501(c)(5) and 502(a)(2); and

  • A program to refund the money spent by caregivers on providing background checks for caregivers.

  • The Health Department will receive 30% of the revenue in the fund for further research on the use of medical marijuana.

  • The Department of Drug and Alcohol Programs will receive 10% of the revenue in the fund for drug abuse prevention and counseling and treatment services.

  • The Pennsylvania Commission on Crime and Delinquency will receive 5% of the fund for distribution to local police departments that demonstrate a need pertaining to the enforcement of the 2016 Act 16.

What is the Agency Taxing Marijuana Businesses in Pennsylvania?

The Pennsylvania Department of Revenue (DOR) is the state agency responsible for collecting all Pennsylvania taxes, including medical marijuana taxes. Other taxes the DOR administers are corporate taxes, sales and use taxes, inheritance taxes, personal income taxes, corporation taxes, realty transfer, etc. The DOR was formed in 1927 and started operating in 1929.

The DOR has offices across the state. They include:

Allentown

555 Union Boulevard

Allentown PA 18109-3389

Phone: (610) 861-2000

Email: RA-RV-BET-BET-DO-EM@pa.gov

Erie

448 West 11th Street

Erie PA 16501-1501

Phone: (814) 871-4491

Email: RA-RV-BET-ERI-DO-EM@pa.gov

Greensburg

Second Floor

15 West Third Street

Greensburg PA 15601-3003

Phone: (724) 832-5283

Email: RA-RV-BET-GBG-DO-EM@pa.gov

Harrisburg

Lobby

Strawberry Square

Harrisburg PA 17128-0101

Phone: (717) 783-1405

Email: RA-RV-BET-HBG-TA-EM@pa.gov

Norristown

Second Floor Suite 210

Stony Creek Office Center

151 West Marshall Street

Norristown PA 19401-4739

Phone: (610) 270-1780

Email: RA-RV-BET-NOR-DO-EM@pa.gov

Philadelphia - Center City

Suite 204A (Inheritance Tax Office In Suite 204B)

110 North 8th Street

Philadelphia PA 19107-2412

Phone: (215) 560-2056

Email: RA-RV-BET-PHI-TA-EM@pa.gov

Philadelphia - Northeast

Academy Plaza Shopping Center

3240 Red Lion Road

Philadelphia PA 19114-1109

Phone: (215) 821-1860

Email: RA-RV-BET-PNE-DO-EM@pa.gov

Pittsburgh - Downtown

411 7th Avenue Room 420

Pittsburgh PA 15219-1905

Phone: (412) 565-7540

Email: RA-RV-BET-PGH-TA-EM@pa.gov

Pittsburgh - Greentree

11 Parkway Center Suite 175

875 Greentree Road

Pittsburgh PA 15220

Phone: (412) 929-0614

Email: RA-RV-BET-GTR-DO-EM@pa.gov

Reading

Suite 239

625 Cherry Street

Reading PA 19602-1186

Phone: (610) 378-4401

Email: RA-RV-BET-RDG-DO-EM@pa.gov

Scranton

Room 207

Bank Towers

207 Wyoming Avenue

Scranton PA 18503-1427

Phone: (570) 963-4585

Email: RA-RV-BET-SCR-DO-EM@pa.gov

Persons seeking to visit any of these offices are required to book appointments before the day of visitation.

Pennsylvania Marijuana Business