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Colorado Retail Marijuana Excise Tax Average Market Rate (UPDATED FOR 2016)

Colorado Revised Statute § 39-28.8-101(1) requires the Department of Revenue to determine the Average Market Rate biannually (in six-month intervals).  Pursuant to § 39-28.8-101(1) Average Market Rate (AMR) is defined as the average price of all unprocessed retail marijuana that is sold or transferred from retail marijuana cultivation facilities in the state to retail marijuana product manufacturing facilities, retail marijuana stores or other retail marijuana cultivations. Retail Marijuana Tax Rule 1 CCR 201-18 further defines the calculation of the Average Market Rate as using reported sales of each category during the test period.  The Department will determine the best methodology to arrive at the Average Market Rate. The Department may, from time to time, change its method of calculating the Average Market Rate if, in the judgment of the Department, such change is necessary to arrive at the most accurate Average Market Rate given the market conditions.

Pursuant to §39-28.8-302, C.R.S., all retail marijuana cultivation facilities must collect and remit an excise tax on the first sale or transfer of unprocessed retail marijuana at a rate of 15% of the average market rate.

The Department of Revenue establishes the Average Market Rate of unprocessed retail marijuana prior to each six month period: January 1 through June 30 and July 1 through December 31.  The Average Market Rates for the period of January 1, 2016 through June 30, 2016 are as follows:

Category of Marijuana Average Market Rate Unit
     
Retail Bud/Flower $1948.00 Per pound
Retail Trim/Shake $464.00 Per pound
Retail Immature Plant $9.00 Per plant

The Average Market Rates are included in:

  • The Retail Marijuana Excise Tax Return to calculate taxes owed when filing.
  • Updates on the Department's Web site, colorado.gov/tax/marijuana-taxes-file.  Click on “Excise” and “Average Market Rate for Unprocessed Retail Marijuana”.
  • A secure web message to licensed marijuana businesses.

Please note:

  • A change in the Average Market Rate could potentially change your excise tax bond requirement.
    • Section 39-28.8-304 (4), C.R.S., requires a cultivation facility to file with the department evidence of a surety bond in the amount equal to two months of the facility's anticipated excise tax liability. 
      • If the average market rate decreases, and the volume of marijuana transferred that is subject to excise tax remains the same as a previous month when a higher average market rate was effective, then the bond requirement will decrease.  
      • Conversely, if the average market rate increases, and the volume of marijuana transferred that is subject to excise tax remains the same as a previous month when a lower average market rate was effective, then the bond requirement will increase.
  • To assist you in calculating the required amount for the retail marijuana excise tax surety bond, the Department has made a bond calculator available on the Department’s Web site at colorado.gov/tax/marijuana-taxes-file. Click on “Surety Bond” and “Downloadable Bond Calculator”.

Should you have questions regarding this information, call 303-205-8287 or you may visit our web site at www.TaxColorado.com.