Cannabis stocks rose Tuesday as Pennsylvania Gov. Josh Shapiro said the Keystone state should legalize adult-use cannabis in order to potentially generate $250 million in tax revenue.
The governor proposed that legal cannabis businesses be established by the state Legislature as part of the upcoming budget that kicks in on July 1.
Pennsylvania would become the 25th state to allow adults over the age of 21 to buy cannabis.
“This budget recognizes that the time has come for Pennsylvania to legalize adult-use cannabis,” Shapiro said.
Cannabis stocks advanced on the news. The AdvisorShares U.S. Cannabis ETF
MSOS
gained 4.6%, Curaleaf Holdings Inc.
CURLF,
rose 3.7%, Tilray Brands Inc.
TLRY,
rose 8.8%, Green Thumb Industries
GTBIF,
moved up 4% and Trulieve Cannabis Corp.
TCNNF,
advanced 6.7%. Verano Holdings Corp.
VRNOF,
gained 4.3% and TerrAscend
TSNDF,
rose 4.1%.
Pennsylvania is “losing out on critical revenue” and new businesses to neighboring states such as New York, New Jersey and Ohio that have legal cannabis programs, Shapiro said.
Shapiro proposed legalization of adult-use cannabis effective July 1.
“Once up and running, this industry will yield $250 million in additional revenue for the commonwealth,” the governor said.
It’s not immediately clear if the Pennsylvania legislature will go ahead with the proposal.
TerrAscend Chief Executive Ziad Ghanem told MarketWatch the company operates a grow facility in Pennsylvania, as well as a wholesale operation and six stores currently aimed at the medical market in the state.
The company has been meeting with Pennsylvania state legislators — both Democrats and Republicans — and he’s seeing “a better appetite” for cannabis legalization, Ghanem said. “There’s positive momentum on both sides of the aisle,” he said.
In another bullish move for the sector, Germany’s Traffic Light Coalition has agreed on a deal on cannabis legalization, with a vote expected later this moth, according to reports.
Germany may legalize cannabis as early as April, in a boost to some North American cannabis companies with operations there.
