HB 25-1209
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
HB 25-1209: MARIJUANA REGULATION STREAML INE
Prime Sponsors:
Rep. Lindstedt; Willford
Sen. Gonzales J.
Published for: House Appropriations
Drafting number: LLS 25-0332
Fiscal Analyst:
John Armstrong, 303-866-6289
john.armstrong@coleg.gov
Version: First Revised Note
Date: March 11, 2025
Fiscal note status: The revised fiscal note reflects the introduced bill, as amended by the House Finance
Committee.
Summary Information
Overview. The bill makes several changes to the regulation of marijuana businesses.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
State Revenue
State Expenditures
TABOR Refunds
Local Government
Appropriations. For FY 2025-26, the bill requires a reduction in appropriations of $278,217. See State
Appropriations section for detail.
Table 1
State Fiscal Impacts
Type of Impact
1
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue -$234,731 -$469,463
State Expenditures -$305,487 -$576,232
Transferred Funds $0 $0
Change in TABOR Refunds -$148,320 -$296,640
Change in State FTE -1.5 FTE -2.9 FTE
1
Fund sources for these impacts are shown in the tables below Page 2
March 11, 2025 HB 25-1209
Table 1A
State Revenue
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund $0 $0
Cash Funds -$234,731 -$469,463
Total Revenue -$234,731 -$469,463
Table 1B
State Expenditures
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund $0 $0
Cash Funds -$278,217 -$523,571
Federal Funds $0 $0
Centrally Appropriated -$27,270 -$52,661
Total Expenditures -$305,487 -$576,232
Total FTE -1.5 FTE -2.9 FTE
Summary of Legislation
The bill makes changes to the regulation of marijuana businesses, as outlined below.
Rulemaking
The bill allows the Marijuana Enforcement Division (MED) in the Department of Revenue to
adopt rules allowing for individual digital identification cards for licensed owners of marijuana
businesses or persons who transport regulated marijuana, and expands options for digital
communication with licensees. It also clarifies what must be included in rules related to record-
keeping requirements, and requires expanded rulemaking related to video surveillance
requirements and research and development units (R&D Units).
Background Checks
Under current law, all marijuana license and renewal applicants must complete a
fingerprint-based criminal history record check. Under the bill, a fingerprint-based criminal
history record check is only required for owners upon initial application, and a name-based
judicial record check is required for renewals. Occupational license holders are required only to
obtain a name-based judicial record check each year. Page 3
March 11, 2025 HB 25-1209
Current law prohibits businesses from possessing a license if they employ anyone who has not
undergone a background check. The bill removes the requirement, and allows employees and
managers to begin working before the individual’s application has been fully processed.
Sales Limits
The bill raises the limit for the amount of retail marijuana products that can be sold in a single
transaction from one ounce to two ounces.
Video Surveillance Requirements
Under current law, marijuana business must meet minimum security requirements. The bill
specifies that rules related to video surveillance must include that businesses have cameras on
all entrances and exits to the store, each point of sale, shipping and receiving areas, and areas
where delivery vehicles load and unload materials. The bill also removes the requirement for
mobile marijuana hospitality businesses have surveillance inside the vehicle. The bill specifies
that DOR rules must include procedures for requests for surveillance recordings.
Research and Development Units
Under current law, cultivation facilities and manufacturers of marijuana can provide R&D units
for quality control or product development purposes to managers of these facilities. The bill
allows these R&D units to be provided to all employees of the facility, provided certain
requirements are met. Managers cannot require their employees to consume R&D units and
cannot receive any compensation for distributing them. The bill specifies that MED must adopt
rules for researchers to evaluate different flavors and non-marijuana ingredients in these R&D
units.
Repeal of Certain Requirements
The bill repeals provisions that make undisclosed ownership of a marijuana license and an
unapproved transfer of a marijuana license a class 2 misdemeanor.
Fees and Inspections
The bill requires that the MED assess a fee to request a copy of a license application. The bill
specifies that licensees to not have to maintain duplicate copies of their records unless the MED
requires the licensee to maintain additional records upon finding of a violation.
State Revenue
The bill decreases state cash fund revenue by $235,000 in FY 2025-26, and $469,000 in
FY 2026-27 and ongoing. The bill removes the requirement that owners and employees of
marijuana businesses submit to an annual criminal background check, which decreases state
cash fund revenue to the CBI Identification Unit Cash Fund in the DPS. Page 4
March 11, 2025 HB 25-1209
Fee Impact on Marijuana Business Owners and Employees
The fiscal note assumes that 30,723 marijuana business owners and employees will shift from
fingerprint-based criminal history record checks to name-based judicial record checks. This
represents the number of owners and employees as of February 2025. These licensees are on a
biennial renewal cycle, so the amounts shown in Table 2A below reflect this impact divided
between two fiscal years. The first-year impact is prorated for the bill’s effective date.
The current fee for criminal background checks is $39.50, which includes $11.25 for the Federal
Bureau of Investigation (FBI) fingerprint-based check, which is passed on to that federal agency,
and excluded from the state TABOR limit.
The current fee for a name-based judicial record check is $8.94, which is subject to TABOR.
Table 2A
Annual Fee Impact on Marijuana Business Owners and Employees
FY 2026-27 and ongoing
Type of Fee Fee
Number
Affected
Total Fee
Impact
Criminal Background Check (CBI ID Unit Cash Fund) $28.25 -15,362 -$433,977
Criminal Background Check (federal pass-through) $11.25 -15,362 -$172,823
Name Based Judicial Check $8.94 15,362 $137,336
Annual Fee Revenue -$469,463
Annual TABOR Impact -$296,640
Marijuana Fee Revenue
The bill also increases revenue to the Marijuana Cash Fund for any fees charged to applicants to
obtain a copy of a license application. The revenue increase is expected to be minimal.
State Expenditures
The bill decreases state expenditures by $305,000 in FY 2025-26, and $576,000 in FY 2026-27
and ongoing. This includes reductions in Department of Revenue expenditures, paid from the
Marijuana Cash Fund, and a reduction of Department of Public Safety expenditures, paid from
the CBI Identification Unit Cash Fund. These impacts are summarized in Table 3 and discussed
below. Page 5
March 11, 2025 HB 25-1209
Table 3
State Expenditures
All Departments
Department
Budget Year
FY 2025-26
Out Year
FY 2026-27
Department of Revenue -$25,883 -$25,883
Department of Public Safety -$279,604 -$550,349
Total Costs -$305,487 -$576,232
Department of Revenue
MED will have a reduction in expenditures from the Marijuana Cash Fund to implement the bill
of about $26,000 in FY 2025-26 and ongoing. Allowing license holders to possess a digital form
of identification and removing the requirement that renewal notices be mailed to a licensee
results in cost savings for mailing, estimated at $25,883 per year
In addition, workload in MED will increase to modify enforcement procedures related to sales
limits, samples, and R&D units. No change in appropriations is required for that work. The MED
will also incur additional rulemaking costs to implement the various changes required by the bill.
Legal services for rulemaking are provided by the Department of Law. These additional costs are
absorbable within existing legal services appropriations.
Department of Public Safety
This bill decreases overall expenditures from the CBI Identification Unit Cash Fund in DPS by
$280,000 and 1.5 FTE in FY 2025-26 (half year impact) and $550,000 and 2.9 FTE in FY 2026-27
and ongoing. Costs are summarized in Table 3B and described below.
Staff
Beginning in FY 2025-26, DPS will no longer require 1.9 FTE Fingerprint Examiner II and 1.0 FTE
Technician II to process the 15,362 fingerprint background applications that the fiscal note
assumes the bill will eliminate annually. First year FTE and expenditure reductions are prorated
for the bill’s effective date.
Federal Bureau of Investigation Pass-through.
The DPS passes $11.25 of every application on to the federal government. With 15,362 less
applications, this equates to a reduction of $172,823 per year. This amount is prorated for a
half-year impact in FY 2025-26.
Page 6
March 11, 2025 HB 25-1209
Processing Costs
There are the following costs associated with each background check application: $6.10
dedicated to equipment maintenance; $1.55 for print digitization; $0.88 to access the Colorado
Crime Information Center for information pertinent to the background check; and $0.73 for
postage costs. This equates to a reduction of $142,252 per year, with the reduction prorated for
a half year impact in FY 2025-26.
Table 3B
State Expenditures
Department of Public Safety
Cost Component
Budget Year
FY 2025-26
Out Year
FY 2026-27
Personal Services -$92,877 -$178,901
Operating Expenses -$1,920 -$3,712
FBI Pass-through Fee -$86,411 -$172,823
Background Check Expenses -$71,126 -$142,252
Centrally Appropriated Costs -$27,270 -$52,661
Total Costs -$279,604 -$550,349
Total FTE -1.5 FTE -2.9 FTE
Centrally Appropriated Costs
Pursuant to a Joint Budget Committee policy, certain costs associated with this bill are
addressed through the annual budget process and centrally appropriated in the Long Bill or
supplemental appropriations bills, rather than in this bill. These costs, which may include
employee insurance, supplemental employee retirement payments, leased space, and indirect
cost assessments, are shown in the expenditure tables above.
TABOR Refunds
The bill is expected to decrease the amount of state revenue required to be refunded to
taxpayers by the amounts discussed in the State Revenue section and shown in Table 1. This
estimate assumes the December 2024 LCS revenue forecast. A forecast of state revenue subject
to TABOR is not available beyond FY 2026-27. Because TABOR refunds are paid from the
General Fund, decreased cash fund revenue will increase the amount of General Fund available
to spend or save. Page 7
March 11, 2025 HB 25-1209
Local Government
Local marijuana licensing authorities may have additional workload to adjust their workload and
rules to accommodate the provisions of the bill.
Effective Date
The bill takes effect January 5, 2026, assuming no referendum petition is filed, and applies to
conduct on or after that date.
State Appropriations
For FY 2025-26, the bill requires the following:
a reduction in appropriations of $25,883 from the Marijuana Cash Fund to the Department
of Revenue;
a reduction in appropriations of $252,334 from the CBI Identification Unit Cash Fund to the
Department of Public Safety, and a reduction of 1.5 FTE.
State and Local Government Contacts
Counties
Law
Municipalities
Public Health and Environment
Revenue
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.