Colorado cannabis tax explained: what you pay in Denver and Boulder

A Denver budtender rings up an eighth, a vape and a tin of gummies, and the receipt does something an Illinois receipt never does: every item carries the same tax lines at the same rates. Colorado charges a 15% retail marijuana sales tax on every adult-use product, flower or concentrate or edible, and since July 1, 2017 it has charged no 2.9% state sales tax on top. The city then adds its own layer. Inside the City and County of Denver the rates added to the shelf price total 26.75%: the state's 15%, Denver's 10.65%, 1% for the Regional Transportation District and 0.1% for the Scientific and Cultural Facilities District.

When sales opened in 2014, Colorado stacked 2 state taxes at the register: the ordinary 2.9% sales tax and a 10% special sales tax on retail marijuana. Senate Bill 17-267 rebuilt that on July 1, 2017. The special tax went to 15%, and retail marijuana stopped paying the 2.9% altogether, so a shopper now meets a single state rate, charged on the final purchase price. Anything else the store sells, a lighter, a T-shirt, rolling papers, still pays the 2.9% state sales tax, according to the Colorado Department of Revenue.

There is also a state tax a shopper never sees. The 15% retail marijuana excise tax is charged when a cultivator transfers product at wholesale, calculated on an average market rate the Department of Revenue resets every 3 months. It is built into the shelf price rather than printed on the receipt, which is why the table above leaves it out.

Denver is a combined city and county, so 1 government sets the local rate. It charges its 5.15% general sales tax on retail marijuana and adds a 5.5% special marijuana sales tax, 10.65% in all, and the city's guidance says the rate applies whatever form the product takes. The transit and cultural district taxes bring the Denver total to 26.75%.

Because the rate is identical at every Denver counter, the shelf price ranks Denver stores honestly. The South Broadway stores we read, Colorado Harvest Broadway, Golden Meds Broadway CO, LiveWell Broadway CO and Reefer Madness Broadway CO, all charge the same 26.75%, so whichever has the lower price before tax also has the lower price after it. That is the arithmetic behind the corridor's price competition: no store on it can win on tax.

Cross the county line and the local layer changes. The City of Boulder charges its 3.86% general sales tax on recreational marijuana plus an additional 3.5% marijuana tax, 7.36% from the city, before the state's 15% and before the county and district taxes that apply at a Boulder address, which this guide does not total. Boulder also levies a 5% excise tax at the wholesale stage, which, like the state's, sits inside the shelf price.

The practical consequence is that a Boulder price and a Denver price are not directly comparable until you add each city's layer. The six Boulder stores we read, The Farm North Boulder CO, Magnolia Road Boulder Rec and Native Roots Boulder, all share Boulder's rate with each other, so within the city the shelf price ranks them just as it does in Denver. Aurora, the third city where we read stores, sets its own rate again.

A registered medical patient buying under Colorado's medical program pays the 2.9% state sales tax and not the 15% retail marijuana sales tax. That is the largest difference between the 2 programs at the register. It does not extend to the city layer in Denver: the City and County of Denver has no exemption from its own sales tax for medical marijuana, so a Denver medical purchase still carries the city's 5.15% general rate.

Illinois taxes the THC rather than the sale. Its Cannabis Purchaser Excise Tax is 10% on flower at or below 35% THC, 20% on infused products such as edibles and 25% above 35% THC, and adult-use cannabis then pays Illinois's 6.25% state rate, with Chicago and Cook County each adding a 3% cannabis tax, before local general sales taxes. On a vape or concentrate the named Chicago rates reach 37.25% against Denver's 26.75%; on flower they come to 22.25% before Chicago's local general sales taxes. Colorado's flat rate is the simpler system, and it is the one in which comparing shelf prices is enough.

That comparison is the job CloudedDeals does. We read the published menus of 37 Colorado dispensaries and rank today's deals by category, so the number you compare is the one a store actually controls.