HB 26-1077

House Bill 26-1077 changes how Colorado taxes unprocessed marijuana sold for retail use. Starting July 1, 2026, it will require the state to calculate separate average market rates for indoor and outdoor grown marijuana, with a lower rate for outdoor-grown marijuana. It also sets a different, even lower rate for marijuana intended for extraction processes. This bill affects marijuana growers and sellers in Colorado and aims to make tax rates more reflective of growing conditions. Since it has been signed into law, these changes will take effect as planned unless further action is needed before the start date.

Official Summary

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 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.      The bill appropriates $22,359 from the general fund to the department of revenue for the 2026-27 state fiscal year to implement the provisions of the bill.(Note: Italicized words indicate new material added to the original summary; dashes through words indicate deletions from the original summary.)(Note: This summary applies to the reengrossed version of this bill as introduced in the second house.)

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