Pennsylvania boasts nearly 400K patients, making it the second-largest medical market. Pennsylvania awarded 50 licenses that allow for three dispensaries per license and 25 processors, five of which can be vertically integrated. Operators are allowed up to five retail licenses, for a total of 15 dispensaries. Qualifying medical conditions include chronic pain and anxiety, making this one of the least restrictive environments.

Pennsylvania also implemented a Clinical Research ("CR") license program. Program guidelines note that eight CR licenses will be issued to operators who are 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.

Notably, Governor Tom Wolf (D) is supportive of an adult-use program, and with Pennsylvania turning blue in the 2020 election, adult-use is more likely than ever. Watch for a ballot initiative here.

May 2021 | GTI acquires TerraVida

May 2021 | GTI Acquires The Healing Center

May 2021 | GTI acquires NSE (all May)

November 2020 | Trulieve acquires PurePenn & Solevo

August 2020 | Ayr reaches an agreement to acquire and develop six retail dispensaries and a significant cultivation and production footprint in a limited license state for total consideration of $57MM

November 2019 | Harvest Health acquires CannaPharmacy
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The play in the Quaker State is to build out infrastructure in anticipation of adult-use. Through the new Clinical Research program, 200 dispensaries will ultimately be allowed in this market. That said, no single operator can own more than 15 total, which should allow for relatively broad market participation.

Dispensaries should look to maximize earnings in advance of selling/partnering with one of the 25 cultivators in need of retail presence. Cultivators currently hold the power in this market, with wholesale flower prices in the $4K per pound range. We don't anticipate an oversupply to impact pricing in the near-term, but the market will need adult-use to avoid such a fate. Expect the recently-seen flurry of acquisitions here to continue for the foreseeable future.