Regulation 39-28.8-101 – Definitions – with respect to rules promulgated under Article 28.8 of Title 39, the following terms have the following meanings.

1.  Unless the context clearly requires otherwise, terms defined by R 103 of 1 CCR 212-2, the Marijuana Enforcement Division’s permanent rules related to the Colorado Retail Marijuana Code, shall have the same meanings as therein defined.

2.  Average market rate

  1. The department will determine the average market rate for retail marijuana in the following categories:
  2. Bud or flower
  3. Trim or “shake"
  4. Whole plant

3.  “Bud” or “Flower” – The bud, or flower, of the marijuana plant, is the flower of the cannabis plant and is the product of the “flower” stage as defined by R 103 of 1 CCR 212-2. “Flower” includes the small leaves immediately below the actual flower which contain levels of THC comparable to the flower. These leaves are commonly known as “sugarleaf”.

4.  “Concentrate” or “Marijuana concentrate” - Concentrate is any extract of any kind of either bud or trim and includes but is not limited to resin, and any compound, manufacture, salt, derivative, mixture, or preparation.

5.  “Marijuana” means “Retail Marijuana” as defined by R 103 of 1 CCR 212-2.

6.  “Cultivator” means a “Retail Marijuana Cultivation Facility” as defined by R 103 of 1 CCR 212-2.

7.  “Related” means under common ownership as such term is used in 1 CCR 212-2.

8.  Test period – The test period for the departmental calculation of the average market rate shall be each November 1st to the subsequent April 30th, and each May 1st to the subsequent October 31st.

9.  “Transfer” means to grant, convey, hand over, assign, sell, exchange, or barter, in any manner or by any means, with or without consideration, any marijuana from one licensee to another or to a consumer. A transfer includes the movement of marijuana from one licensed premises to another, even of both premises are contiguous, and even if both premises are owned by a single entity or individual or group of individuals.

10.  “Trim” or “Marijuana Trim” - The trim is any part of the marijuana plant other than the flowers or whole plant that is sold to a grower, wholesaler, retailer, or consumer of marijuana.

11.  “Unprocessed retail marijuana” means all retail marijuana that is sold or transferred by a cultivator, even though it may have gone through some processing, and even though it may be subject to further processing by a manufacturing facility, testing facility, or store.

12.  “Unrelated” means not under common ownership as such term is used in 1 CCR 212-2.

Regulation 39-28.8-201.1 - Procedures

  1. The department’s procedures governing sales tax described in the rules promulgated under Articles 21 and 26 of Title 39 shall likewise govern the procedures with respect to the collection, reporting, and remittance of sales tax on marijuana.
  2. The department may require a separate marijuana sales tax license if the department finds that a separate license would enhance the administration of the marijuana sales tax.
  3. Any vendor making sales of retail marijuana at retail shall file a separate marijuana sales tax return in addition to the retail sales tax return. The marijuana sales tax return shall be filed electronically. The remittance of the marijuana sales tax shall be made in accordance with procedures prescribed on the department’s website or on forms published by the department. If practicable, the department may prescribe electronic payment of the marijuana sales tax.

Regulation 39-28.8-202.1 – The retail marijuana sales tax is imposed on the full purchase price of all marijuana products. The sale of any product that contains any amount of marijuana is subject to the retail marijuana sales tax on the full purchase price of such articles, without regard to the relative value of the marijuana to the remainder of the product.

Regulation 39-28.8-302.1 -

1.  Incidence of tax - The excise tax is imposed upon the cultivator, who shall pay the excise tax to the department upon the sale of marijuana.

2.  Calculation and payment of Tax

  1. Calculation of average market rate
  2. The department will calculate the average market rate 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.
  3. The department may weigh or discount such sales as, in its judgment, distort or fail to fully reflect a true market price for a transaction.
  4. [Further rules may be considered to further define the process of the calculation of average market rate]
  5. The tax shall be calculated on the basis of the category of product being sold.
  6. If a sale of marijuana includes any bud in the transaction, then the total weight of the marijuana sold or transferred shall be multiplied by the average market rate for bud and the result shall be multiplied by 15% to arrive at the amount of tax due.
  7. If a sale of marijuana is a sale of trim, and does not include any bud or concentrate, then the total weight of the marijuana sold or transferred shall be multiplied by the average market rate for trim and the result shall be multiplied by 15% to arrive at the amount of tax due.
  8. In the case of a sale of a whole plant, the number of plants sold shall be multiplied by the average market rate for whole plants and the result shall be multiplied by 15% to arrive at the amount of tax due.
  9. In the case of a sale of concentrate manufactured by a cultivator, the tax shall be calculated by multiplying the amount of trim that was used to manufacture the concentrate by the average market rate for trim, adding the product of the amount of flower multiplied by the average market rate for flower, and multiplying that sum by 15% to arrive at the amount of tax due.

3.  Evidence of payment of tax –

  1. [The department will consider the application of stamps or other means of evidencing payment of the excise tax]

4.  Cultivators shall file returns monthly reporting the total amount of retail marijuana sold and the tax due thereon.

5.  Special rule for transfers of product from medical marijuana facilities to retail marijuana facilities.

  1. [The department will consider the application of the excise tax on products transferred from medical marijuana facilities to retail marijuana facilities.]

Regulation 39-28.8-303.1 – The books and records required to be maintained pursuant to section 39-28.8-303 must be maintained at each respective place of business for a period of at least four years.

Regulation 39-28.8-308.1 – The department’s procedures governing sales tax described in the rules promulgated under Articles 21 and 26 of Title 39 shall, to the extent not inconsistent with the rules promulgated pursuant to this Article, likewise govern the procedures with respect to the collection, reporting, and remittance of excise tax on marijuana.