Accounting, Tax, IRS & Marijuana

Retail Marijuana Excise Tax Average Market Rate (January 1, 2017 - June 30, 2017)

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 01, 2017 through June 30, 2017 are as follows:

Category of Marijuana Average Market Rate Unit
Retail Bud/Flower $1471.00 Per pound
Wet Whole Plant $223.00 Per pound
Retail Trim/Shake $499.00 Per pound
Retail Immature Plant $10.00 Per plant
Seeds $6.00 Per seed