$100 prize for guessing Colorado weed flower tax AMR for Q1 2021

What will Colrado’s Average Market Rate for flower be as of January 1, 2021?  It’s $1,316 today.  Best guess wins $100.  Enter at CO2021@newrevenue.org.

In case of tie, earliest sent message wins.  (Hint:  All AMRs have been whole dollar figures so far – no pennies.) Entries close when Colorado releases the price, at which time winner will be announced and check for $100 issued.  One guess per entrant, for now.  Employees of the State of Colorado are ineligible.

Here’s some background:

The Center for New Revenue keeps hearing that weight-based taxes* on marijuana are unworkable.  This contest is a publicity stunt to remind readers that five states (AK, CA, CO, ME, and NV) have weight-based taxes* in place.  Here are their rates: https://newrevenue.org/2020/02/19/california-marijuana-tax-rates-as-of-january-2020/

Colorado’s official “Average Market Rate” or wholesale price for flower, for the period preceding the first quarter of 2020, was $1,316 per pound.

Colorado recalculates that AMR every quarter, and uses it to calculate a weight-based tax – now 15% of $1,316, for a tax of of $197.40 per pound; that is, 43.519 cents per gram.

Colorado has two marijuana taxes:

One is a 15% retail tax.  That has nothing to do with this contest.

The second tax – the one the contest is about — is a weight-based tax. Colorado taxes marijuana bud (flower) statutorily de jure by 15% of price, but it can’t figure price for transactions involving related parties and vertically integrated businesses, so it taxes those by the pound.  Every calendar quarter, the State calculates an “Average Market Rate” for a slew of marijuana product categories.  That AMR is the per-pound price that the State applies its 15% rate to.  Currently, for marijuana flower or bud, the State says the AMR is $1,316 per pound, or $2.901 per gram. https://www.colorado.gov/pacific/sites/default/files/AMR_PriorRates_Jan2020.pdf, preserved at  AMR_PriorRates_Jan2020

So the 15% tax is converted to a tax of $197.40 per pound; that is, 43.519 cents per gram.

So what will the AMR that is the basis for that tax be for the first quarter of 2021 — in a little more than ten months?  The AMR has been moving up . . .


UPDATE 25 February 2020:  My friend Jim Morgan, Chief Financial Officer of the Washington State Liquor and Cannabis Board, points out:

Colorado’s tax is “not actually a weight based tax.  While they do use weight as a unit of measure for conversion purposes, the weight is just a proxy for calculating sales in transactions where there are no actual sales (vertical integration).  The tax collections fluctuate in relation to price changes, not changes in production.  For it to be a true weight based tax the tax collections would fluctuate based on the total weight of product sold, and would be immune to changes in price.”





Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: