Examining the potential economic impact of medical marijuana reform in Pennsylvania

This lengthy local article, headlined “Not just medicine: Marijuana may have big economic impact,” takes a look into some of the key economic stories now that the Keystone state has legalize medical marijuana. Here are excerpts:

Pennsylvania Medical Cannabis Society Executive Director Patrick Nightingale called the medical marijuana law a piece of “momentous legislation.” He said it resulted from a true grassroots coalition of both recreational advocates and the parents of children suffering from ailments that can be treated with marijuana.

“They said, We are not going to settle for a bill that benefits our children only,” Nightingale said. According to Nightingale, the worst part of the legislation is the regulatory fee structure, which includes a $200,000 licensing payment for growers. Nightingale characterized this as a “one-time revenue grab for the commonwealth.”

“(The fees) are very high,” he said. “It is an expensive process.” He added that he is somewhat worried that the price of legal marijuana will greatly exceed the price of black market marijuana. This would potentially drive users underground, and destroy legitimate businesses.

Nightingale cited the price of legal marijuana in New Jersey, which is approximately $500 an ounce. He said marijuana of even higher quality, sold illegally in Pittsburgh, costs only $350 an ounce. “I don’t know where (Gov.) Chris Christie and his cronies came up with $500 an ounce,” Nightingale said….

Illinois passed a bill similar to Pennsylvania’s medical marijuana legislation in 2013. Dan Linn — executive director for the Illinois chapter of the National Organization for the Reform of Marijuana Laws, or NORML — said the movement has stimulated local economies and created approximately 1,000 jobs.

There have also been snares along the way. Linn acknowledged that high regulatory fees created “sticker shock” that prevented many would-be entrepreneurs from entering the business. And he said that local officials have made life difficult in some areas. “There were some folks who had very difficult zoning appeals in their communities,” Linn said.

But some are far more optimistic about Pennsylvania’s program. Chris Walsh, editorial director of the Marijuana Business Daily in Denver, Colorado, said the Keystone State should be far more successful than Illinois in implementing its medical marijuana legislation. “There’s more business opportunity in Pennsylvania, for sure,” he said. “The inclusion of severe chronic pain (as a qualifying condition) is huge.”

According to Walsh, allowing those currently on opiates to switch to marijuana makes the difference between a small legal market and a massive legal market. It also means that, because there’s more demand, prices should be reasonable. “Pennsylvania is really shaping up to be one of the biggest marijuana markets, easily on the East Coast, and possibly fifth or sixth in the entire nation,” he said, predicting that the commonwealth and Maryland will dominate the industry in the Atlantic region. “There’s a lot of optimism about this market.”

Walsh, however, echoed Nightingale’s concerns about local counties and municipalities trying to push medical marijuana grows and dispensaries out of areas. He said this is true even in Colorado because some people expect seediness and an increase in crime. “That never happens,” Walsh said.

“If it’s a well-regulated industry, once it’s been up and running, people kind of forget about them. There’s not this scary, stereotypical image that people have in their head.” His prediction for Pennsylvania: $100 million in annual sales. “(But) it will take a while to get there,” he said.