Pennsylvania 2025-2026 Budget Proposal Includes Legalizing Recreational Marijuana

2 April 2025

Marijuana legalization is officially on the table in Pennsylvania's 2025–2026 budget discussions, as top Democratic leaders, including House Speaker Joanna McClinton and Governor Josh Shapiro, push to finally establish a legal adult-use cannabis market.

At a recent policy event, Speaker McClinton confirmed that cannabis legalization is a key component of Governor Shapiro’s proposed budget plan. Framing it as a "new economic opportunity" that could benefit industries from agriculture to retail, McClinton emphasized the need to recapture tax revenue currently flowing to neighboring states like New Jersey, Maryland, and New York—where adult-use cannabis is already legal and thriving.

Pennsylvania’s medical marijuana program, legalized in 2016, has generated over $6 billion in sales, proving the state’s appetite for a regulated cannabis market. But without adult-use legalization, residents continue crossing state lines or turning to the illicit market—costing Pennsylvania millions in potential tax revenue and missing out on safer, regulated consumer access.

Who Is Affected — and How:

• Pennsylvania Residents and Consumers: Legalization would allow adult consumers access to safe, tested cannabis products in-state, reducing reliance on illicit sources or trips to neighboring states. It would also offer new economic opportunities for communities across Pennsylvania.

• Medical Marijuana Patients: Patients could benefit from expanded product options and competitive pricing if adult-use sales support wider market growth and investment.

• The Cannabis Industry: Entrepreneurs, small businesses, and farmers would have new opportunities to enter a legal cannabis market, ranging from cultivation to retail. A regulated market would also attract significant private investment and job creation statewide.

• The State Budget and Economy: Legal cannabis could generate substantial new revenue streams through taxes and licensing fees. Democratic Reps. Rick Krajewski and Dan Frankel have proposed a** state-run dispensary model**—similar to Pennsylvania’s liquor control system—which could bring in even more direct sales revenue under tight government oversight.

• Lawmakers and Political Landscape: House Democrats are optimistic about passing legalization legislation this session but acknowledge the biggest hurdle remains the GOP-controlled Senate. Several Republican lawmakers have expressed openness, seeing regulated cannabis as a more conservative and fiscally responsible approach than maintaining prohibition. Still, bipartisan cooperation will be essential to getting a bill across the finish line.