On May 7, 2025, the Pennsylvania House of Representatives passed House Bill 1200 (HB 1200), which would have legalized adult-use marijuana across the Commonwealth.1 The bill authorized sales through state-run stores overseen by the Pennsylvania Liquor Control Board (PLCB), allowed for personal cultivation, provided for the expungement of certain marijuana-related convictions, and included provisions for social equity.
However, on May 13, the Senate Law and Justice Committee voted 7–3 to table the bill, halting its progress for the remainder of the legislative session.2
This alert summarizes the legislative background, the reasons behind the bill's failure, and what employers should consider as the legalization debate continues.
Legislative Background
Pennsylvania legalized medical marijuana in 2016 through the Medical Marijuana Act.3 Since then, the state's medical cannabis program has expanded significantly, and public support for full legalization has grown. HB 1200 marked the first time either legislative chamber approved a comprehensive recreational marijuana bill.
The bill's proposed state-run sales model, however, became its most controversial feature.
Why the Senate Rejected HB
The Senate Law & Justice Committee—chaired by Republican Sen. Mike Regan and including legalization supporter Sen. Dan Laughlin (R-Erie)—voted to table the bill just days after its House passage.4 Key concerns included:
- Exclusion of private operators: Lawmakers argued the bill would shut out existing medical dispensaries and small businesses.5
- Lack of process: The bill was introduced and passed quickly, leaving little time for bipartisan negotiation and compromise.6
- Concerns about state-run retail: Senators viewed the PLCB model as outdated and inefficient, and potentially harmful to the viability of the legal market.7
What Comes Next
Senators Laughlin and Sharif Street (D-Philadelphia) have announced plans to introduce a new bill that would legalize recreational marijuana under a private retail model regulated by a newly created Cannabis Control Board.8
Governor Josh Shapiro's FY 2025–2026 budget proposes legalizing adult-use cannabis effective July 1, 2025, with sales beginning January 1, 2026.9 Citing legalization in nearly all neighboring states—New York, New Jersey, Delaware, Maryland, and Ohio—the budget warns that Pennsylvania is at a competitive disadvantage, with border-state retailers reporting that up to 60% of their customers are from Pennsylvania.
The proposal includes a $10 million investment in restorative justice initiatives, immediate expungement for possession-only offenses, and a $25 million fund to support small and diverse businesses. The industry is projected to generate $250 million annually and $1.3 billion over five years as it scales. Even so, many analysts believe any compromise bill will not advance until later in 2025. 10
Implications for Employers
Although recreational marijuana remains illegal, employers should begin preparing for likely changes.
- Medical marijuana protections: Under current law, employers may not take adverse action against an employee solely for being a certified medical cannabis user. However, employers may still prohibit on-site use and discipline for on-duty impairment.11
- Drug testing policies: If adult-use becomes legal, employers—especially those operating in cities like Philadelphia, which already restrict pre-employment marijuana screening—may face greater scrutiny for blanket drug testing practices.
- Policy updates: Employers should proactively review their policies addressing drug use, safety-sensitive roles, and accommodations to ensure alignment with evolving laws.
Takeaways
- HB 1200's failure reflected disagreement over the retail model, not broad opposition to legalization.
- A revised bill centered on private dispensaries is expected later this year.
- Employers should closely monitor developments and prepare to update their workplace policies accordingly.
Footnotes
1 https://www.palegis.us/legislation/bills/2025/hb1200
3 https://www.palegis.us/statutes/unconsolidated/law-information?sessYr=2016&sessInd=0&actNum=16
8 https://www.palegis.us/senate/co-sponsorship/memo?memoID=45819;https://www.palegis.us/senate/co-sponsorship/memo?memoID=46264
11 35 Pa. Stat. Ann. § 10231.2103
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