Colorado Senate Bill Would Overhaul Marijuana Taxes and Shift Testing Oversight to Public Health

A bill filed Tuesday in the Colorado Senate would make substantial changes to how the state taxes and regulates marijuana products, including replacing the current 15% retail marijuana sales tax with a potency-based tax.

Senate Bill 161 was introduced today and assigned to the Senate Finance Committee. The measure is sponsored by State Senators Kyle Mullica (D) and Marc Snyder (D). If approved, the legislation would lower Colorado’s current retail marijuana excise tax to $1 per pound of unprocessed retail marijuana starting January 1, 2027, while also replacing the existing 15% retail sales tax with a new structure based on the amount of intoxicating cannabinoids in a product.

Under the bill, edible marijuana products would be taxed at 1.2 cents per milligram of total intoxicating cannabinoids, while inhaled marijuana products made with concentrate, products made with marijuana flower, and other intoxicating cannabis products would be taxed at 0.4 cents per milligram. The measure says the sales tax could not exceed 2 cents per milligram until January 1, 2030, and 5 cents per milligram after that.

The legislation would also move key testing and safety responsibilities from the Department of Revenue to the Colorado Department of Public Health and Environment. That includes setting testing standards, overseeing product safety, and establishing a new reference laboratory for intoxicating cannabis products. The bill would also create a statewide off-shelf surveillance testing system focused on products packaged for retail sale.

In addition, marijuana product producers would be required to register with the Department of Public Health and Environment beginning July 1, 2027. The bill would also require public online access to certain adverse health reports, product testing results, and traceability information, with personally identifiable information redacted.

The proposal is titled the Cannabis Consumer Protection Act and would mark one of the most significant marijuana regulatory overhauls introduced in Colorado this year.