The cannabis industry in Pennsylvania is booming. As per state’s Medical Marijuana Advisory Board, total sales have hit $3.4 billion since 2018. $2 billion of those revenues have come from dispensaries.
Since the legalization of marijuana for the management of severe medical illnesses in Pennsylvania in 2016, 633,557 patients and families have registered, with the purchase requiring a doctor’s recommendation.
And, if Illinois’ history is any indication, if recreational pot is allowed in Pennsylvania, sales may soon over double.
Since the state’s Republican-controlled legislation has showed little interest, Cantor Fitzgerald analyst Pablo Zuanic does not think it will happen prior to the second quarter of 2025. Mr. Zuanic wrote to investors that the regulation of recreational usage in adjacent states, New Jersey and potentially Maryland, could push the legislature’s hand.
Mr. Zuanic argued that without authorized recreational use, the growing number of clinics in Pennsylvania, 131 are already operational, will decrease overall sales. The silver lining for customers, according to John Collins, head of the state Office of Medical Marijuana, is cheaper pricing.
“More stores mean more competition,” he remarked at the board meeting on Tuesday. “You’d think that would happen.”
For example, the selling price of a gram of medicinal marijuana decreased to $14.53 in July, down from $15.67 in January 2020, as sales increased.
Illinois’ experience might be a sign of things to come in Pennsylvania. According to Mr. Zuanic of Cantor Fitzgerald, the entire cannabis market in Illinois more than quadrupled in the first month after recreational use was authorized in January 2020. Product accessibility, price, and variety, as well as availability in adjacent states, are all factors that might obscure medicinal to recreational sales forecasts.
Gov. Tom Wolf and Lt. Gov. John Fetterman both favor recreational marijuana legalization, which may justify Pennsylvania’s appeal to marijuana capitalists. Mergers and acquisitions have been particularly active in the state this year.
According to Marijuana Business Daily, a trade newspaper headquartered in Denver, Colorado, there were a half-dozen agreements totaling $438 million between March and April to purchase growing facilities and retail licenses, with Chicago-based Verano Holdings Corp. and Trulieve Cannabis Corp. as the leading participants.
In a $110.3 million agreement, Verano purchased three pharmacies in Cranberry Township, Washington, and Monroeville, as well as Agri-cultivation Kind’s and testing facilities in Chester, Pa. Verano also paid $60 million for Agronomed Biologics, which comprised growing, manufacturing, and retail rights.
Trulieve, located in Tallahassee, Fla., which owns Solevo dispensaries in Squirrel Hill, Washington, and Zelienople, spent $60 million for a dispensary license under Keystone Shops during the same three-month period. In the Philadelphia region, Keystone has three sites.
Parallel, located in West Palm Beach, Fla., launched its first facility in the Friendship section of Pittsburgh in July under the Goodblend name, with plans for a second location in Erie. On the North Side, Parallel is also building a 124,000-square-foot growing plant.
Currently, there is no distinction among marijuana used for medicinal or recreational reasons, but that will change as the business grows. There will be medicinal and recreational items available in the future.