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House of Representatives
sHB5109 / File No. 681 1
General Assembly File No. 681
February Session, 2026 Substitute House Bill No. 5109
House of Representatives, April 20, 2026
The Committee on Finance, Revenue and Bonding reported
through REP. HORN of the 64th Dist., Chairperson of the
Committee on the part of the House, that the substitute bill
ought to pass.
AN ACT REPLACING THE CANNABIS TOTAL THC TAX WITH AN
EXCISE TAX.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 12 -330ll of the 2026 supplement to the general 1
statutes is repealed and the following is substituted in lieu thereof 2
(Effective October 1, 2026, and applicable to sales occurring on or after October 3
1, 2026): 4
(a) As used in this section and sections 12-330mm and 12-330nn: 5
(1) "Cannabis" has the same meaning as provided in section 21a-420; 6
[(2) "Cannabis concentrate" has the same meaning as provided in 7
section 21a-420; 8
(3) "Cannabis edible product" means a product containing cannabis 9
or cannabis concentrate, combined with other ingredients, that is 10
intended for use or consumption through ingestion, including 11
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sublingual or oral absorption; 12
(4) "Cannabis plant material" has the same meaning as provided in 13
section 21a-279a;] 14
[(5)] (2) "Cannabis retailer" means "retailer", as defined in section 21a-15
420; 16
[(6)] (3) "Consumer" has the same meaning as provided in section 21a-17
420; 18
[(7)] (4) "Cultivator" has the same meaning as provided in section 21a-19
420; 20
[(8)] (5) "Delivery service" has the same meaning as provided in 21
section 21a-420; 22
[(9)] (6) "Dispensary facility" has the same meaning as provided in 23
section 21a-420; 24
[(10)] (7) "Food and beverage manufacturer" has the same meaning as 25
provided in section 21a-420; 26
[(11)] (8) "Hybrid retailer" has the same meaning as provided in 27
section 21a-420; 28
[(12)] (9) "Micro-cultivator" has the same meaning as provided in 29
section 21a-420; 30
[(13)] (10) "Municipality" has the same meaning as provided in 31
section 21a-420; 32
[(14)] (11) "Palliative use" has the same meaning as provided in 33
section 21a-408; 34
[(15)] (12) "Producer" has the same meaning as provided in section 35
21a-420; 36
[(16)] (13) "Product manufacturer" has the same meaning as provided 37
in section 21a-420; 38
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[(17)] (14) "Product packager" has the same meaning as provided in 39
section 21a-420; and 40
[(18) "Social Equity Council" has the same meaning as provided in 41
section 21a-420; 42
(19) "Total THC" has the same meaning as provided in section 21a -43
240; and] 44
[(20)] (15) "Transporter" has the same meaning as provided in section 45
21a-420. 46
(b) (1) For the privilege of making any sales of cannabis in this state, 47
a tax is hereby imposed on each cannabis retailer, hybrid retailer or 48
micro-cultivator at the [following rates: ] rate of ten and seventy -five-49
hundredths per cent of the gross receipts from the sale of cannabis. 50
[(A) Cannabis plant material, at the rate of six hundred twenty -five-51
thousandths of one cent per milligram of total THC, as reflected on the 52
product label; 53
(B) Cannabis edible products, at the rate of two and seventy -five-54
hundredths cents per milligram of total THC, as reflected on the product 55
label; and 56
(C) Cannabis, other than cannabis plant material or cannabis edible 57
products, at the rate of nine -tenths of one cent per milligram of total 58
THC, as reflected on the product label.] 59
(2) The tax under this section: 60
(A) Shall be collected from the consumer, except as provided under 61
subparagraphs (B) and (D) of this subdivision, by the cannabis retailer, 62
hybrid retailer or micro -cultivator at the time of sale and such tax 63
reimbursement, termed "tax" in this section, shall be paid by the 64
consumer to the cannabis retailer, hybrid retailer or micro -cultivator. 65
Each cannabis retailer, hybrid retailer or micro -cultivator shall collect 66
from the consumer the full amount of the tax imposed by this section or 67
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an amount equal to the average equivalent thereof to the nearest amount 68
practicable. Such tax shall be a debt from the consumer to the cannabis 69
retailer, hybrid retailer or micro -cultivator, when so added to the 70
original sales price, and shall be recoverable at law in the same manner 71
as other debts except as provided in section 12-432a; [.] 72
(B) Shall not apply to the sale of cannabis for palliative use; 73
(C) Shall not apply to the transfer of cannabis to a transporter for 74
transport to any other cultivator, micro -cultivator, food and beverage 75
manufacturer, product manufacturer, product packager, dispensary 76
facility, cannabis retailer, hybrid retailer or producer; 77
(D) Shall not apply to the sale of cannabis by a delivery service to a 78
consumer; 79
(E) Shall be in addition to the taxes imposed under section 12-330mm 80
and chapter 219; and 81
(F) When so collected, shall be deemed to be a special fund in trust 82
for the state until remitted to the state. 83
(c) On or before the last day of each month in which a cannabis 84
retailer, hybrid retailer or micro -cultivator may legally sell cannabis 85
other than cannabis for palliative use, each such cannabis retailer, 86
hybrid retailer or micro -cultivator shall file a return with the 87
Department of Revenue Services. Such return shall be in such form and 88
contain such information as the Commissioner of Revenue Services 89
prescribes as necessary for administration of the tax under this section 90
and shall be accompanied by a payment of the amount of the tax shown 91
to be due thereon. Each cannabis retailer, hybrid retailer and micro -92
cultivator shall file such return electronically with the department and 93
make such payment by electronic funds transfer in the manner provided 94
by chapter 228g, to the extent possible. 95
(d) If any cannabis retailer, hybrid retailer or micro-cultivator fails to 96
pay the amount of tax reported due on its return within the time 97
specified under this section, there shall be imposed a penalty equal to 98
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twenty-five per cent of such amount due and unpaid, or two hundred 99
fifty dollars, whichever is greater. Such amount shall bear interest at the 100
rate of one per cent per month or fraction thereof, from the due date of 101
such tax until the date of payment. Subject to the provisions of section 102
12-3a, the commissioner may waive all or part of the penalties provided 103
under this section when it is proven to the commissioner's satisfaction 104
that the failure to pay any tax was due to reasonable cause and was not 105
intentional or due to neglect. Any penalty that is waived shall be applied 106
as a credit against tax liabilities owed by the cannabis retailer, hybrid 107
retailer or micro-cultivator. 108
(e) Each person, other than a cannabis retailer, hybrid retailer or 109
micro-cultivator, who is required, on behalf of such cannabis retailer, 110
hybrid retailer or micro-cultivator, to collect, truthfully account for and 111
pay over a tax imposed on such cannabis retailer, hybrid retailer or 112
micro-cultivator under this section and who wilfully fails to collect, 113
truthfully account for and pay over such tax or who wilfully attempts in 114
any manner to evade or defeat the tax or the payment thereof, shall, in 115
addition to other penalties provided by law, be liable for a penalty equal 116
to the total amount of the tax evaded, or not collected, or not accounted 117
for and paid over, including any penalty or interest attributable to such 118
wilful failure to collect or truthfully account for and pay over such tax 119
or such wilful attempt to evade or defeat such tax, provided such 120
penalty shall only be imposed against such person in the event that such 121
tax, penalty or interest cannot otherwise be collected from such cannabis 122
retailer, hybrid retailer or micro-cultivator. The amount of such penalty 123
with respect to which a person may be personally liable under this 124
section shall be collected in accordance with the provisions of section 125
12-555a and any amount so collected shall be allowed as a credit against 126
the amount of such tax, penalty or interest due and owing from the 127
cannabis retailer, hybrid retailer or micro -cultivator. The dissolution of 128
the cannabis retailer, hybrid retailer or micro -cultivator shall not 129
discharge any person in relation to any personal liability under this 130
section for wilful failure to collect or truthfully account for and pay over 131
such tax or for a wilful attempt to evade or defeat such tax prior to 132
dissolution, except as otherwise provided in this section. For purposes 133
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of this section, "person" includes any individual, corporation, limited 134
liability company or partnership and any officer or employee of any 135
corporation, including a dissolved corporation, and a member of or 136
employee of any partnership or limited liability company who, as such 137
officer, employee or member, is under a duty to file a tax return under 138
this section on behalf of a cannabis retailer, hybrid retailer or micro -139
cultivator or to collect or truthfully account for and pay over a tax 140
imposed under this section on behalf of such cannabis retailer, hybrid 141
retailer or micro-cultivator. 142
(f) The provisions of sections 12-548, 12-551 to 12-554, inclusive, and 143
12-555a shall apply to the provisions of this section in the same manner 144
and with the same force and effect as if the language of said sections had 145
been incorporated in full into this section and had expressly referred to 146
the tax under this section, except to the extent that any provision is 147
inconsistent with a provision in this section. 148
(g) The commissioner shall not issue a refund of any tax paid by a 149
cannabis retailer, hybrid retailer or micro-cultivator under this section. 150
(h) The commissioner may adopt regulations, in accordance with the 151
provisions of chapter 54, to implement the provisions of this section and 152
sections 12 -330mm and 12 -330nn. Notwithstanding the provisions of 153
sections 4-168 to 4-172, inclusive, prior to adopting any such regulations, 154
the commissioner shall issue policies and procedures, which shall have 155
the force and effect of law, to implement the [taxes] tax imposed under 156
this section and sections 12 -330mm and 12-330nn. At least fifteen days 157
prior to the effective date of any policy or procedure issued pursuant to 158
this subsection, the commissioner shall post such policy or procedure 159
on the department's Internet web site and submit such policy or 160
procedure to the Secretary of the State for posting on the eRegulations 161
System. Any such policy or procedure shall no longer be effective upon 162
the adoption of such policy or procedure as a final regulation in 163
accordance with the provisions of chapter 54 or forty -eight months of 164
July 1, 2021, whichever is earlier. 165
(i) The tax received by the state under this section shall be deposited 166
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as follows: 167
(1) For the fiscal years ending June 30, 2022, and June 30, 2023, in the 168
cannabis regulatory and investment account established under section 169
21a-420f of the general statutes, revision of 1958, revised to January 1, 170
2025; 171
(2) For the fiscal years ending June 30, 2024, and June 30, 2025, sixty 172
per cent of such tax received in the Cannabis Social Equity and 173
Innovation Fund established under section 21a -420f of the general 174
statutes, revision of 1958, revised to January 1, 2025, twenty-five per cent 175
of such tax received in the Cannabis Prevention and Recovery Services 176
Fund established under section 21a-420f of the general statutes, revision 177
of 1958, revised to January 1, 2025, and fifteen per cent in the General 178
Fund; 179
(3) For the fiscal year ending June 30, 2026, sixty per cent of such tax 180
received in the social equity and innovation account established under 181
section 21a -420f, twenty -five per cent of such tax received in the 182
Cannabis Prevention and Recovery Services Fund established under 183
section 21a-420f and fifteen per cent in the General Fund; 184
(4) For the fiscal years ending June 30, 2027, and June 30, 2028, [sixty-185
five] seventy per cent of such tax received in the social equity and 186
innovation account established under section 21a -420f, twenty-five per 187
cent of such tax received in the Cannabis Prevention and Recovery 188
Services Fund established under section 21a-420f and [ten] five per cent 189
in the General Fund; and 190
(5) For the fiscal year ending June 30, 2029, and each fiscal year 191
thereafter, seventy-five per cent of such tax received in the social equity 192
and innovation account established under section 21a-420f and twenty-193
five per cent of such tax received in the Cannabis Prevention and 194
Recovery Services Fund established under section 21a-420f. 195
This act shall take effect as follows and shall amend the following
sections:
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Section 1 October 1, 2026, and
applicable to sales
occurring on or after
October 1, 2026
12-330ll
FIN Joint Favorable Subst.
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The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of
the General Assembly, solely for purposes of information, summarization and explanation and do not
represent the intent of the General Assembly or either chamber thereof for any purpose. In general,
fiscal impacts are based upon a variety of informational sources, including the analyst’s professional
knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final
products do not necessarily reflect an assessment from any specific department.
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 27 $ FY 28 $
Department of Revenue Services Various -
Revenue Loss
1.9 million 2 million
Note: Various=Various
Municipal Impact: None
Explanation
Explanation
The bill results in a total net revenue loss to the state of $1.9 million
in FY 27 and $2 million in FY 27 by modifying the cannabis excise tax
rate from a potency tax to a flat 10.75% on retail sales.
The bill also increases the transfer percentage of the cannabis excise
tax collections to the social equity and innovation account and
correspondingly decreases the General Fund (GF) percentage by 5% for
FY 27 and FY 28. The table below shows the net impact by fund/account
from the changes in the bill.
Revenue Impact of HB 5109 by Fund/Account – in millions
Fund/Account FY 27 FY 28 FY 29 FY 30+
Social Equity and Innovation Account - - (1.6) (1.7)
Prevention and Recovery Services Fund (0.5) (0.5) (0.5) (0.5)
General Fund (1.4) (1.5) - -
Total (1.9) (2.0) (2.1) (2.2)
Under current law and unchanged by the bill, (1) the GF transfer
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sunsets in FY 29 and (2) Prevention and Recovery Services Fund receives
25% of cannabis excise tax collections per year.
The Out Years
The General Fund revenue impact noted above occurs in FY 27 and
FY 28 only. The social equity and innovation account will incur a
revenue loss beginning in FY 29 due to the tax change as noted above.
The social equity and innovation account and the Prevent ion and
Recovery Services Fund will incur a continuation of the revenue impact
noted above through the outyears subject to inflation.
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OLR Bill Analysis
sHB 5109
AN ACT REPLACING THE CANNABIS TOTAL THC TAX WITH AN
EXCISE TAX.
SUMMARY
This bill replaces the current state taxes on retail sales of cannabis
plant material, cannabis edible products, and other cannabis (which are
0.625 cents, 2.75 cents, and 0.9 cents respectively per milligram of total
THC reflected on its label) with a single tax of 10.75% of a retailer’s gross
receipts from cannabis sales.
As under existing law, the tax applies to sales by a cannabis retailer,
hybrid retailer, or micro -cultivator. It does not apply to (1) sales of
cannabis for palliative (medical) use; (2) sales of cannabis by a delivery
service to a consumer; or (3) the transfer of cannabis to a transporter for
transport to any other cultivator, micro -cultivator, food and beverage
manufacturer, product manufacturer, product packager, dispensary
facility, cannabis retailer, hybrid retailer, or producer.
Under existing law and the bill, retailers and micro -cultivators must
collect the tax from consumers at the time of sale (except for the exempt
sales described above). The tax applies in addition to the 3% municipal
cannabis tax and the 6.35% state general sales tax.
Relatedly, the bill increases, from 65% to 70%, the amount of cannabis
tax revenue directed to the social equity and innovation account for FYs
27 and 28 and correspondingly decreases the amount directed to the
General Fund for those years, from 10% to 5%.
The bill also makes technical and conforming changes, including
deleting an obsolete definition.
EFFECTIVE DATE: October 1, 2026, and applicable to sales occurring
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on or after that date.
BACKGROUND
Cannabis Terms
By law, “cannabis” has the same meaning as “marijuana,” which is
all parts of a plant or species of the genus cannabis, whether growing or
not, and including its resin, compounds, manufactures, salts,
derivatives, mixtures, and preparations; high -THC hemp products;
manufactured cannabinoids; or cannabinon, cannabinol, cannabidiol
(CBD), and similar compounds, except CBD derived from hemp.
Marijuana and cannabis do not include the following:
1. a plant’s mature stalks; fiber made from the stalks; oil or cake
made from the plant’s seeds; a compound, manufacture, salt,
derivative, mixture, or preparation made from the stalks other
than the extracted resin;
2. the plant’s seeds;
3. hemp with a total THC concentration of up to 0.3% on a dry
weight basis that is not a high-THC product;
4. any substance the federal Food and Drug Administration
approves as a drug and that is reclassified in any controlled
substance schedule, or that it unschedules; or
5. infused beverages.
A “cannabis edible product” is a product containing cannabis or
cannabis concentrate, combined with other ingredients, that is intended
to be ingested, including by sublingual or oral absorption.
“Cannabis plant material” is the cannabis flower, trim, and all parts
of the cannabis plant or species, excluding (1) a growing plant and its
seeds or (2) hemp as defined under state law.
“Total THC” is the sum of the percentage by weight of
tetrahydrocannabinolic acid, multiplied by 0.877, plus the percentage of
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weight of THC.
Social Equity and Innovation Account
The social equity and innovation account’s money must be allocated
by the Office of Policy and Management secretary for purposes that the
Social Equity Council determines further the principles of equity and
may include providing (1) access to capital for businesses in any
industry, (2) technical assistance for the start -up and operation of a
business in any industry, (3) funding for workforce education in any
industry, (4) funding community investments, and (5) funding
investments in disproportionately impacted areas.
Related Bills
sSB 84, § 26, favorably reported by the Finance, Revenue and Bonding
Committee, has identical provisions.
sSB 405 (File 303), § 2, favorably reported by the Public Safety and
Security Committee, reduces, by 5%, the amount of tax revenue the
social equity and innovation account receives under current law (from
65% to 60% in FYs 27 and 28 and from 75% to 70% starting in FY 29).
sHB 5350 (File 401), §§ 17 & 47, favorably reported by the General
Law Committee, make several changes to the definition of cannabis.
COMMITTEE ACTION
Finance, Revenue and Bonding Committee
Joint Favorable Substitute
Yea 43 Nay 10 (03/30/2026)