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Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 26-0325.01 Stephanie Schrab x4330 HOUSE BILL 26-1077
House Committees Senate Committees
Finance
A BILL FOR AN ACT
CONCERNING THE AVERAGE MARKET RATE OF UNPROCESSED RETAIL101
MARIJUANA.102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov.)
Current law imposes a tax on the first sale or transfer of
unprocessed retail marijuana at a rate of 15% of the average market rate
of the unprocessed retail marijuana. The "average market rate" is
currently defined as the average price, as determined by the department
of revenue, of all unprocessed retail marijuana that is sold or transferred
from retail marijuana cultivation facilities in the state to retail marijuana
HOUSE SPONSORSHIP
Gonzalez R. and Willford,
SENATE SPONSORSHIP
Lindstedt and Marchman, Snyder
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
product manufacturing facilities or retail marijuana stores.
Effective July 1, 2026, the bill defines "indoor unprocessed retail
marijuana" and "outdoor unprocessed retail marijuana." The bill also
amends the existing definition of "average market rate" to require
separate rates for indoor unprocessed retail marijuana and outdoor
unprocessed retail marijuana, which must be lower than the rates for
indoor unprocessed retail marijuana. In addition, the existing definition
of "average market rate" requires that unprocessed retail marijuana for
extractions have a separate average market rate that is lower than the rate
for unprocessed retail marijuana for direct sale to consumers. The bill
clarifies that this requirement applies to both outdoor and indoor
unprocessed retail marijuana.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 39-28.8-101, amend2
(1.5); and add (4.5) and (6.5) as follows:3
39-28.8-101. Definitions.4
Unless the context otherwise requires, any terms not defined in this5
article 28.8 have the meanings set forth in article 26 of this title 39. As6
used in this article 28.8, unless the context otherwise requires:7
(1.5) "Average market rate" means the average price, as8
determined by the department on a quarterly basis, of all unprocessed9
retail marijuana that is sold or transferred from retail marijuana10
cultivation facilities in the state to retail marijuana product manufacturing11
facilities or retail marijuana stores, less taxes paid on the sales or12
transfers. An "average market rate" may be based on the purchaser or13
transferee of unprocessed retail marijuana or on the nature of the14
unprocessed retail marijuana that is sold or transferred. The "average15
market rate" must include one or more rates that cover unprocessed16
marijuana that is allocated to extractions, and the initial rates for these17
product types must be lower than the rate for unprocessed marijuana that18
is allocated for direct sale to consumers. SEPARATE RATES THAT COVER19
HB26-1077-2-
INDOOR UNPROCESSED RETAIL MARIJUANA AND OUTDOOR UNPROCESSED1
RETAIL MARIJUANA AS FOLLOWS:2
(a) (I) (A) O NE OR MORE RATES THAT COVER INDOOR3
UNPROCESSED RETAIL MARIJUANA, INCLUDING FRESH FROZEN MARIJUANA,4
THAT IS ALLOCATED TO EXTRACTIONS; AND5
(B) O NE OR MORE RATES THAT COVER INDOOR UNPROCESSED6
RETAIL MARIJUANA THAT IS ALLOCATED FOR DIRECT SALE TO CONSUMERS;7
AND8
(II) T HE INITIAL RATES FOR INDOOR UNPROCESSED RETAIL9
MARIJUANA THAT IS ALLOCATED TO EXTRACTIONS MUST BE LOWER THAN10
THE RATE FOR INDOOR UNPROCESSED RETAIL MARIJUANA THAT IS11
ALLOCATED FOR DIRECT SALE TO CONSUMERS.12
(b) (I) (A) O NE OR MORE RATES THAT COVER OUTDOOR13
UNPROCESSED RETAIL MARIJUANA, INCLUDING FRESH FROZEN MARIJUANA,14
THAT IS ALLOCATED TO EXTRACTIONS; AND15
(B) ONE OR MORE RATES THAT COVER OUTDOOR UNPROCESSED16
RETAIL MARIJUANA THAT IS ALLOCATED FOR DIRECT SALE TO CONSUMERS; 17
(II) T HE INITIAL RATES FOR OUTDOOR UNPROCESSED RETAIL18
MARIJUANA THAT IS ALLOCATED TO EXTRACTIONS MUST BE LOWER THAN19
THE RATE FOR OUTDOOR UNPROCESSED RETAIL MARIJUANA THAT IS20
ALLOCATED FOR DIRECT SALE TO CONSUMERS; AND21
(III) T HE INITIAL RATES FOR OUTDOOR UNPROCESSED RETAIL22
MARIJUANA MUST BE LOWER THAN THE RATE FOR INDOOR UNPROCESSED23
RETAIL MARIJUANA.24
(4.5) "I NDOOR UNPROCESSED RETAIL MARIJUANA " MEANS25
UNPROCESSED RETAIL MARIJUANA CULTIVATED WITHIN AN INDOOR26
STRUCTURE USING ARTIFICIAL LIGHTING OR CULTIVATED IN ANY MANNER27
HB26-1077-3-
OTHER THAN OUTDOOR UNPROCESSED RETAIL MARIJUANA, AS DEFINED IN1
SUBSECTION (6.5) OF THIS SECTION.2
(6.5) "O UTDOOR UNPROCESSED RETAIL MARIJUANA " MEANS3
UNPROCESSED RETAIL MARIJUANA THAT WAS CULTIVATED UNDER4
NATURAL SUNLIGHT AND WEATHER CONDITIONS , WITHOUT THE USE OF5
ARTIFICIAL LIGHT OR LIGHT DEPRIVATION IN THE CANOPY AREA; EXCEPT6
THAT ARTIFICIAL LIGHT IS PERMISSIBLE TO MAINTAIN VEGETATIVE PLANTS7
UNDER TWENTY-FOUR INCHES IN HEIGHT AND MOTHER PLANTS.8
SECTION 2. Effective date. This act takes effect July 1, 2026.9
SECTION 3. Safety clause. The general assembly finds,10
determines, and declares that this act is necessary for the immediate11
preservation of the public peace, health, or safety or for appropriations for12
the support and maintenance of the departments of the state and state13
institutions.14
HB26-1077-4-