Pennsylvania

insights

June 12, 2024
Notable Players

A Deeper Look At This State

Regulatory Framework

Pennsylvania is the second-largest medical market with over 440,000 cardholders.

The bi-partisan bill SB1024 crafted by Sens. Dan Laughlin (R) and Sharif Street (D) to allow medical patients to cultivate cannabis plants for personal use had been introduced but ultimately failed to pass.

Pennsylvania has awarded 50 licenses that allow for three dispensaries per license and 25 processors, five of which can be vertically integrated. Operators were formally allowed up to five retail licenses for a total of 15 dispensaries, however a couple operators have exceeded this limit. The state also implemented a Clinical Research ("CR") license program. Program guidelines note that eight CR licenses will be issued to operators partnered with one of Pennsylvania's major university health institutions. Each of the eight license holders can operate up to six dispensaries and one cultivation site.

Moreover, a group of bi-partisan lawmakers is also taking the first serious steps to legalize recreational cannabis in the state with Gov. Tom Wolf’s support. HB2210 was introduced in April 2024 to establish a framework to regulate and allow for the adult-use sale of cannabis in the state of Pennsylvania.

Notable Market Activity

May 2022 | IPR announced its acquisition of TILT's White Haven cultivation and production facility for $15MM

April 2022 | Ascend Wellness completed its acquisition of various facilities for $55MM

February 2022 | FarmaceuticalRX received $34MM from Chicago Atlantic in a senior secured term loan

September 2021 | Cresco announced plans to acquire Cure Pennsylvania's three dispensaries for $90MM

September 2021 | AYR announced plans to acquire PA Natural Medicine's three dispensaries for $80MM

May 2021 | GTI acquired NSE, The Healing Center & TerraVida

What's the Play?

The play in the Keystone State is to build out infrastructure in anticipation of adult use. Through the Clinical Research program, 200 dispensaries will ultimately be allowed in this market.

Dispensaries should look to optimize operations in advance of Adult-Use regulations as customer demand will increase dramatically. Wholesale pricing has fallen since the medical marijuana program launched and as the market has become more saturated. Additionally, Pennsylvania is surrounded by states who allow adult use sales, notably New Jersey who is just over the river from Philadelphia, one of the top 15 cities in the world for cannabis consumption.

While Pennsylvania is not quickly moving towards adult use legalization, the pressure is mounting as they are almost surrounded by states who have legalized adult use. As the medical market continues to experience turbulence, operators can expect lawmakers to give more attention to the cannabis market in the next 12 months. The state has the potential to be an incredible market for adult use and operators should continue to find ways to enter before potential adult-use legalization.

Market Snapshot

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

58,380

This Data Point

594/273

By The Numbers

Population

~13.0MM

21+ Population

~10MM

Annual Tourists

~
192
MM

Medicinal Legalization

2016

Adult-Use Legalization

N/A

First Adult-Use Sales

N/A

MMJ Patients

~441K

Monthly Revenue

~$140.0MM

Cultivation Cap

No Limit

Cultivation Licenses

33/33 (Operational/Limit)

Retail Licenses

181/No Limit (Operational/Limit)*

Retail License Cap per Operator

15*

Vertical Integration

Allowed

Delivery

Allowed

MMJ Qualifications

Less Restrictive

Adult Population/ # Retail Licenses

Accepts Out of State MMJ

No

MMJ Patients / # Retail Licenses

~2.4K

*Each retail license can open three dispensaries for a total of 157 dispensaries across the state. *Operators such as Trulieve and Jushi have 20 and 17 dispensaries respectively despite the formal cap

Top Cultivators

Notable Market Activity

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Proprietary Sharp Capital Advisors data - compiled using various sources including state and local government data

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