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
gained 5.9%, Curaleaf Holdings Inc.
rose 6.1%, Tilray Brands Inc.
rose by 7.7%, Green Thumb Industries
moved up by 5.3% and Trulieve Cannabis Corp.
rose by 6.1%. Verano Holdings Corp.
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.
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.