Gov. Josh Shapiro’s 2025-26 budget includes revenue from the legalization of marijuana.

As state lawmakers debate marijuana legalization, they should not think one bit about the $1.3 billion Shapiro projects the state could receive in tax revenue in the first five years after the legalization of recreational marijuana is approved. The argument is the additional tax revenue generated by legalized marijuana will help close the state’s structural budget deficit.

We don’t doubt there’s a market, even here in Warren County, given the number of arrests we see of people coming back from New York state after purchasing drugs that are legal in the Empire State but illegal here in Pennsylvania. But it’s not as if money begins pouring in quickly. The experience in other states is the revenue is slow to begin trickling in depending on how complex the state chooses to make its legal marijuana market. Look at New York state to see how not to set up a market.

Legalizing marijuana should be a decision made outside the budget with that revenue not counted upon necessarily as a budget balancer. Colorado and Washington have both seen declines in marijuana tax revenue rather than continued increases, and it’s important to keep taxes on marijuana low enough to discourage the illegal market to continue. There is state money to be made, but it’s important not to be overly optimistic.

As we noted recently Warren County finds itself in a tough spot as state residents go to New York to pick up illegal products, and it would be nice if a federal solution to the marijuana legalization debate would be approved so we weren’t left with this patchwork quilt of marijuana legalization. There are pros and cons on either side of the debate that state lawmakers have to wrestle with. Tax revenue in terms of the budget shouldn’t be part of that debate because, in our view, the money is an ancillary consideration to people’s health. In our view, the governor and legislature need to find other ways to balance the budget.