Marijuana Excise Tax

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. Medical marijuana is not subject to the 15% state retail marijuana excise tax. 

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 Average Market Rate (AMR), visit www.Colorado.gov/tax/marijuana-AMR.

Excise Tax on Marijuana Transfers

Transfers of retail marijuana between unaffiliated cultivation facilities, and then to affiliated retail marijuana stores or retail marijuana product manufacturers, are subject to the excise tax based on the contract price between the unaffiliated cultivation facilities, ONLY WHEN all four of the following conditions have been met:
  1. The retail marijuana was transferred to the cultivation facility from an unaffiliated cultivation facility. 
  2. The retail marijuana was harvested by the previous cultivation facility for sale at a retail marijuana store or for extraction by the retail marijuana product manufacturer. It also did not undergo further cultivation at the facility that received the retail marijuana.
  3. A contract price was established at the time of the transfer between the unaffiliated cultivations.
  4. The retail marijuana was subsequently transferred to an affiliated retail marijuana store or retail marijuana product manufacturer.

If all four of the above conditions have NOT been met, then the excise tax on the transfers is determined based on the AMR, not the contract price. The excise tax is still to be reported and paid by the cultivation facility that transferred the marijuana to the affiliated store or manufacturer. 

Sales or transfers between licensed cultivation facilities are not subject to the state excise tax. Affiliated retail marijuana businesses and unaffiliated retail marijuana businesses who do not have a contract price at the time of the sale will calculate their excise tax at 15% of the AMR. Unaffiliated retail marijuana businesses with a contract price at the time of sale will calculate their excise tax at 15% of the contract price. For more information, review the Summary of Retail Marijuana Excise Tax Changes (Updated Dec. 22, 2017).
 

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.