Starr.C's post has some good diagnostics to try.
iMovie only recognizes the the system photos library. So make sure that your Photos library is designated as your system photos library in the Photos app general preferences. If the box that says "use as system Photos library" is grayed out, which is want you want, that means that the library already is your system Photos library and you don't need to do anything further. Otherwise, click the box to make it gray out.
You can also check to make sure that your system preferences authorize iMovie to access the Photos library. Go to Apple Logo/SystemPreferences/Security & Privacy/Privacy. Click on the little lock icon at the bottom of the window and enter your administrator password. Then click on the Photos item and Automation item in the side bar and see if you can add iMovie to the Photos item and Photos to the Automation item. The restart and see if you can get iMovie to read the photos library in the iMovie sidebar.
Sometimes it helps to close iMovie and close Photos, then reopen Photos and reopen iMovie. See if that triggers the read.
-- Rich