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HB26-1077 • 2026
Average Market Rate of Unprocessed Retail Marijuana
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 cu
Budget
Taxes
Enacted
This bill passed the Legislature and reached final enactment based on the latest official action.
- Sponsor
- Rep. R. Gonzalez, Rep. J. Willford, Sen. W. Lindstedt, Sen. J. Marchman, Sen. M. Snyder, Rep. M. Carter, Rep. J. Phillips, Rep. N. Ricks, Rep. B. Titone, Sen. J. Gonzales
- Last action
- 2026-06-03
- Official status
- Governor Signed
- Effective date
- Not listed
Plain English Breakdown
Checked against official source text during the last sync.
HB26-1077: Tax Rates for Indoor and Outdoor Marijuana
This law updates how the state calculates tax rates on unprocessed marijuana by creating separate categories based on whether plants are grown indoors or outdoors, including specific rules for fresh-frozen products.
What This Bill Does
- Defines 'outdoor' marijuana as plants cultivated under natural sunlight and weather without artificial light or structures, with limited exceptions.
- Defines 'indoor' marijuana as any plant not meeting the definition of outdoor growth.
- Requires separate tax rates for fresh-frozen indoor unprocessed retail marijuana and fresh-frozen outdoor unprocessed retail marijuana.
- Maintains a requirement that marijuana used to make extracts has a lower average market rate than plants sold directly to consumers.
- Orders the Department of Revenue to create rules setting these new rates by July 1, 2027.
- Requires the Department of Revenue to publish how they calculate each tax rate and what data sources they use.
Who It Names or Affects
- The Colorado Department of Revenue
- Retail marijuana cultivation facilities
- Manufacturers and stores that buy unprocessed retail marijuana
Terms To Know
- Average market rate
- The average price used to calculate the tax on the first sale of unprocessed marijuana.
- Unprocessed retail marijuana
- Marijuana plants that have not been turned into other products like oils or edibles yet.
Limits and Unknowns
- The specific tax rates for the new categories will be set by rules adopted later.
- The exact effective date of these changes is not listed in the provided text.
Amendments
These notes stay tied to the official amendment files and metadata from the legislature.
Plain English: This amendment adds money to the bill so the state can pay for staff and computer systems needed to manage marijuana taxes.
- It sets aside $22,359 from the general fund for the Department of Revenue in the 2026-27 budget year.
- $2,542 is given to office leaders for administrative work and support staff.
- $10,049 is provided to tax experts who handle marijuana taxation services.
- $9,768 is used to maintain the computer system that manages tax administration.
- The amendment text does not explain how this money will change the actual amount of taxes people pay or the rules for selling marijuana.
Plain English: This amendment requires the state department to publish a general explanation of how it calculates tax rates for unprocessed retail marijuana.
- The Department must create and share a description of the methods used to calculate average market rates.
- The amendment does not explain what specific data sources or calculation steps will be included in the published descriptions.
- It is unclear how often these descriptions will need to be updated if the department changes its methods.
Plain English: This amendment adds a new definition for 'outdoor unprocessed retail marijuana' to the state tax law.
- It defines outdoor marijuana as plants grown under natural sunlight and weather without being inside a building or greenhouse.
- The rule allows growers to use artificial light only for small young plants (under 24 inches) and mother plants used for breeding.
- Growers are allowed to use water systems, fertilizers, and protect their crops from bad weather if they have an approved safety plan.
- The provided text only shows the definition changes and does not explain how this new category affects tax rates or other parts of the bill.
- Details about what specific 'contingency plans' are required for weather protection are not included in this amendment.
Plain English: This amendment changes how the tax rate for marijuana is calculated by requiring lower rates for plants used to make extracts and setting a deadline for new rules on fresh frozen products.
- The 'average market rate' must now include prices for unprocessed marijuana that will be turned into extractions, like oils or concentrates.
- Tax rates for marijuana destined for extraction must start lower than the rates for plants sold directly to consumers.
- New rules are required by July 1, 2027, to set specific tax rates for fresh frozen indoor and outdoor unprocessed retail marijuana.
- The amendment text provided is incomplete because the bill title cuts off mid-sentence.
- Some technical details about how exactly these new lower rates will be calculated are not explained in this short summary of changes.
Plain English: This amendment changes a specific number in the bill from 6.5 to 6.7, removes several lines of text on page 4, and updates the title word.
- Changes the number '(6.5)' to '(6.7)' on page 3.
- Removes all text found in lines 16 through 24 on page 4.
- Updates the bill's short title by replacing two words with 'MARIJUANA.'
- Adjusts section numbers so they follow correctly after removing the deleted lines.
- The provided text does not explain what the number change from 6.5 to 6.7 means for taxes or prices.
- The specific content of the removed lines on page 4 is missing, so it is unclear exactly which rules are being deleted.
Bill History
-
2026-06-03
Governor
Governor Signed
-
2026-06-02
Governor
Sent to the Governor
-
2026-06-02
Senate
Signed by the President of the Senate
-
2026-06-02
House
Signed by the Speaker of the House
-
2026-05-12
House
House Considered Senate Amendments - Result was to Concur - Repass
-
2026-05-11
Senate
Senate Third Reading Passed with Amendments - Floor
-
2026-05-08
Senate
Senate Second Reading Special Order - Passed with Amendments - Committee
-
2026-05-07
Senate
Senate Committee on Finance Refer Amended to Senate Committee of the Whole
-
2026-05-01
Senate
Introduced In Senate - Assigned to Finance
-
2026-04-30
House
House Third Reading Passed - No Amendments
-
2026-04-29
House
House Second Reading Special Order - Passed with Amendments - Committee
-
2026-04-28
House
House Committee on Appropriations Refer Amended to House Committee of the Whole
-
2026-02-26
House
House Committee on Finance Refer Unamended to Appropriations
-
2026-02-02
House
Introduced In House - Assigned to Finance
Official Summary Text
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 (department), of all unprocessed retail marijuana that is sold or transferred from retail marijuana cultivation facilities in the state to retail marijuana product manufacturing facilities or retail marijuana stores.
The act specifies that 'outdoor unprocessed retail marijuana' is cultivated under natural sunlight and weather conditions without artificial light or structures, except under limited specified circumstances, and 'indoor unprocessed retail marijuana' is cultivated in any manner other than 'outdoor unprocessed retail marijuana.'
The act also amends the existing definition of 'average market rate' to require separate rates for fresh frozen indoor unprocessed retail marijuana and fresh frozen outdoor unprocessed retail marijuana. The act requires the department to adopt rules to establish the rates for fresh frozen indoor unprocessed retail marijuana and fresh frozen outdoor unprocessed retail marijuana on or before July 1, 2027. 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 act maintains this requirement.
The act also requires the department to publish a general description of the methodology and data sources used to establish the rate for each average market rate category of unprocessed retail marijuana.
(Note: This summary applies to this bill as enacted.)