A 15% state excise tax is imposed on the first sale or transfer from a retail marijuana cultivation facility to a retail marijuana store or retail marijuana product manufacturing facility. The industry may refer to retail marijuana as recreational or adult use marijuana. Medical marijuana is not subject to excise tax.
Retail Marijuana Excise tax returns must be e-filed monthly through Revenue Online. For step-by-step instructions on how to file, review our Retail Marijuana Excise Tax Return Filing Instructions.
State Retail Marijuana Excise Tax Rate
Retail marijuana is subject to a 15% excise tax on the Average Market Rate (AMR) or contract price1 of retail marijuana. The excise tax is based on the average market rate for Bud, Trim, Immature Plant, Wet Whole Plant, Seed, Bud Allocated for Extraction, and Trim Allocated for Extraction. One marijuana excise tax return is required for each retail marijuana cultivation facility.
For more information, review the FYI Excise 23 guidance publication.
To view the current AMRs, visit Tax.Colorado.gov/Average-Market-Rate.
Excise Tax on Marijuana Transfers
Retail marijuana cultivation facilities are required to pay the retail marijuana excise tax based on either 15% of the AMR or 15% of the contract price of the retail marijuana.
The contract price is used to calculate the excise tax when a retail marijuana cultivation facility transfers retail marijuana to an unaffiliated retail marijuana manufacturing facility or an unaffiliated retail marijuana store, and the contract price is established at the time of the transfer.
The AMR is used to calculate the excise tax when a retail marijuana cultivation facility transfers retail marijuana to an affiliated retail marijuana manufacturing facility or an affiliated retail marijuana store. The AMR must also be used when no contract price is established at the time of transfer from a retail marijuana cultivation facility to an unaffiliated retail marijuana manufacturing facility or an unaffiliated retail marijuana store. "Affiliated" means being owned or controlled by the same or related interests including individuals who are related by blood or marriage or entities that are directly or indirectly controlled by an entity or individual or related individuals.
The AMR categories are bud, trim, bud allocated for extraction, trim allocated for extraction, immature plant, wet whole plant, and seed. The retail marijuana excise tax for retail marijuana concentrate produced by a retail marijuana cultivation facility affiliated with its grow facility is calculated at either the bud allocated for extraction and/or the trim allocated for extraction or the wet whole plant AMR rate depending on which category was used to produce the retail marijuana concentrate. The retail marijuana excise tax is computed based on the total weight of the retail marijuana transferred. If multiple categories are included in the transfer, the excise tax is calculated separately for each category of retail marijuana included in the transfer by separately calculating the total weight of the retail marijuana included in each category. Inconsequential amounts of bud inadvertently included in a transfer that is otherwise trim may be treated as trim and not as bud.
Review the Marijuana Taxes Guidance Publications for more information.
1 As a result of Senate Bill 18-259 and regulation 1 CCR 201-18 Section 39-28.8-302, there is a narrow exception for transfers to use the contract price for calculating excise tax, specific to transfers between unaffiliated cultivation facilities transferring to affiliated retail marijuana stores or product manufacturers.