Marijuana cultivation taxes in Colorado could see one of the biggest shakeups since adult-use sales began in 2014 if a proposed piece of legislation is successful.
Wholesale marijuana taxes, or excise taxes, are based on the state's average market rate (AMR), which is actually the median price per pound of various cannabis categories. After a cannabis category's AMR is set each quarter by the Colorado Department of Revenue, growers are charged a 15 percent excise tax on each sale of plant material to a dispensary or extraction facility.
Current categories for wholesale cannabis taxes include retail bud, trim, bud allocated for extraction, and a few others — with retail bud, sold as flower for smoking, the most expensive category. This approach has long been derided by business owners, who say that the rates can be unfair, but the Colorado Legislature has been hesitant to change the AMR system, which plays a critical role in how much tax revenue the state collects from the pot industry each year. The budget for the state Marijuana Enforcement Division, an arm of the DOR, is based almost entirely on industry taxes and fees, as well.
However, a cannabis chain based in southern Colorado and a handful of lawmakers think it's time to rethink the status quo.
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