What Cannabis Industry Professionals Need to Know About Colorado’s 2026 Legislative Session

The Colorado General Assembly considered multiple bills affecting the cannabis industry in the 2026 legislative session. While a few of those bills passed into law, the bills that would have made significant changes to the cannabis industry failed. 

The laws that were passed include:

• HB26-1077 amends the law governing the excise tax that is due when retail marijuana is first transferred from a cultivator to a processor or distributor in Colorado. If the buyer and seller are affiliated with each other, then the excise tax is calculated as 15% of the “average market rate” of unprocessed retail marijuana. HB26-1077 amends the definition of “average market rate,” effectively creating separate “average market rates” for fresh frozen indoor unprocessed retail marijuana and fresh frozen outdoor processed retail marijuana. The Department of Revenue must adopt rules to establish the new rates for on or before July 1, 2027, and publish a general description of the methodology and data sources used to establish the rate for each average market rate category of unprocessed retail marijuana.

• HB-1409 eliminates the distribution of 3.5% of gross retail marijuana sales tax revenue to local governments and reallocates that revenue to the marijuana tax cash fund, the state public school fund, and the general fund.

• SB-26-007 permits certain health facilities to let patients who are terminally ill and who are registered in the state’s medical marijuana program use medical marijuana within the health facility, subject to certain parameters. Health facilities must develop and implement recordkeeping procedures as well as guidelines and restrictions related to the possession, usage, storage, and administration of medical marijuana to ensure the safety of others, safe facility operations, and compliance with other laws.

The General Assembly failed to pass bills which sought to: (1) reduce the marijuana excise tax and change the way sales tax is charged; (2) regulate the manufacture, distribution, sale, and consumption of TCH beverages; (3) create a state permitting system for temporary hospitality events where marijuana could be legally consumed but not sold or distributed; and (4) increase the state retail marijuana sales and excise taxes to fund a state institution for the treatment of persons with mental health, behavioral health, or substance use disorders.

If you have questions about the laws applicable to the cannabis industry and their potential effect on your business, please contact BHGR’s Cannabis Group today.

This article is informational only. The presentation or use of this information does not in any manner constitute an attorney-client relationship between BHGR and the website user. While the information on this site concerns legal issues, it is not intended as legal advice and is not a substitute for particularized advice from your own legal counsel.