SB 25-076
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
SB 25-076: INTOXICATING SUBSTANCES & SOCIAL EQUITY BUSINESS
Prime Sponsors:
Sen. Amabile; Pelton B.
Rep. Brown
Published for: Senate Business, Labor, & Tech.
Drafting number: LLS 25-0272
Fiscal Analyst:
John Armstrong, 303-866-6289
Emily Dohrman, 303-866-3687
Version: Initial Fiscal Note
Date: February 27, 2025
Fiscal note status: The fiscal note reflects the introduced bill.
Summary Information
Overview. The bill places additional requirements and restrictions on marijuana and natural medicine
sales and expands the social equity license program.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
State Revenue
State Expenditures
State Transfers
TABOR Refunds
Local Government
Appropriations. For FY 2025-26, the bill requires an appropriation of $261,546 to multiple state agencies,
including an appropriated transfer. The Entrepreneur Cash Fund is continuously appropriated to the Office
of Economic Development.
Table 1
State Fiscal Impacts
Type of Impact
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue -$13.9 million -$15.8 million
State Expenditures $334,788 $358,933
Transferred Funds $9.5 million $10.7 million
Change in TABOR Refunds $279,491 $289,813
Change in State FTE 2.5 FTE 3.0 FTE
1
Fund sources for these impacts are shown in the tables below Page 2
February 27, 2025 SB 25-076
Table 1A
State Revenue
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund -$11.3 million -$12.8 million
Cash Funds – Tax Revenue -$2.9 million -$3.3 million
Cash Funds – Natural Medicine Fee Revenue -$55,297 -$69,121
Cash Funds – Marijuana Fee Revenue $334,788 $358,934
Total Revenue -$13.9 million -$15.8 million
Table 1B
State Expenditures
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund $0 $0
Cash Funds $282,806 $296,431
Federal Funds $0 $0
Centrally Appropriated $51,982 $62,502
Total Expenditures $334,788 $358,933
Total FTE 2.5 FTE 3.0 FTE
Table 1C
State Transfers
Fund Source
Budget Year
FY 2025-26
Out Year
FY 2026-27
General Fund $9.5 million $10.7 million
Cash Funds
1
-$9.5 million -$10.7 million
Net Transfer $0 $0
1
Cash funds include the Marijuana Tax Cash Fund, State Public School Fund, Retail Marijuana Excise Tax
Fund, Public School Capital Construction Assistance Fund, and Marijuana Entrepreneur Fund. See
State Transfers section. Page 3
February 27, 2025 SB 25-076
Summary of Legislation
General Provisions
The bill requires the Marijuana Enforcement Division (MED) and the Natural Medicine Division
(NMD) within the Department of Revenue (DOR), as well as the Department of Public Health and
Environment (CDPHE), to prioritize public health over private interests when regulating
marijuana and/or natural medicines. Additionally, DOR must develop measures that prevent
employees of the MED and NMD from being influenced by marijuana and natural medicine
license holders.
Current law permits MED to seek the assistance from the CDPHE when adopting certain rules.
The bill would require MED to also seek this assistance.
Labeling and Potency Requirements
The bill creates a new labeling requirements for regulated marijuana and regulated marijuana
products, including a color labeling system based on the product’s THC potency, and
requirements for listing product potency, serving size, and consumption directions on product
labels. A guide to the color labeling system must be posted by vendors at points of sale.
Current law restricts the serving size for edible marijuana products to 10 milligrams of THC. The
bill applies this to inhaled marijuana products, and clarifies how total THC is calculated. The bill
also restricts the weight of any package of inhaled marijuana product to a maximum weight of
500 milligrams, excluding packaging.
The bill requires that NMD adopt rules for labeling requirements for natural medicine products
and data reporting standards about adverse medical or behavioral reactions to natural medicine
products.
Age Restrictions
The bill prohibits a retail marijuana store, transporter, hospitality business, or sales business from
selling retail marijuana with a THC potency greater than 10 percent or inhaled retail marijuana
that contains an added flavor ingredient to someone who is 25 years old or younger.
Prohibited Natural Medicine Products
The bill prohibits natural medicine licensees from making products that:
are a candy product, gummy, chocolate or other confection;
contain a concentrated form of a natural medicine product;
are consumed by or administered by a means other than oral ingestion; or,
contain an added flavor or sweetener. Page 4
February 27, 2025 SB 25-076
Social Equity Licenses
Under current law, certain Colorado residents can qualify for a social equity marijuana license if
they meet certain criteria. These social equity licensees are eligible for loans, grants, and
technical support through the Marijuana Entrepreneur Fund administered by the Office of
Economic Development and International Trade (OEDIT). The bill expands the existing social
equity program in OEDIT to apply to any individual who meets certain income and residential
criteria.
The bill also renames the Marijuana Entrepreneur Fund as the Entrepreneur Fund.
Assumptions
The fiscal note estimates that approximately 15.6 percent of retail marijuana is sold to
individuals age 21 to 25, and that over 95 percent of marijuana products currently sold have a
potency that exceeds 10 percent. The fiscal note assumes that restricting the products that can
be sold to individuals under 25 to low potency products will reduce marijuana consumption in
this age group by 40 percent. This translates in a 6.2 percent reduction in overall marijuana
consumption.
State Revenue
The bill reduces state revenue by $13.9 million in FY 2025-26, $15.8 million in FY 2026-27, and
similar amounts in future years. As shown in Table 2, the bill impacts revenue from the
15 percent special sales tax on marijuana, 15 percent excise tax on marijuana, and licensing fees
for natural medicine and marijuana licensees. Revenue impacts the General Fund and multiple
cash funds.
Table 2
State Revenue
Revenue Source FY 2025-26 FY 2026-27
Marijuana Special Sales Tax -$11.3 million -$12.8 million
Marijuana Excise Tax -$2.9 million -$3.3 million
Natural Medicine Fee Revenue -$55,297 -$69,121
Marijuana Fee Revenue $228,641 $234,587
Total -$13.9 million -$15.8 million Page 5
February 27, 2025 SB 25-076
Marijuana Special Sales Tax Revenue
By restricting the marijuana products that can be sold to individuals under 25 to low potency
products, the bill reduces revenue from the 15 percent special sales tax on marijuana by
$11.3 million in FY 2025-26, $12.8 million in FY 2026-27, and similar amounts in future years.
Special sales tax revenue is initially credited to the General Fund. After being deposited in the
General Fund, 71.85 percent of the revenue is transferred to the Marijuana Tax Cash Fund
(MTCF), 12.59 percent is transferred to the State Public School Fund, and the remaining
15.56 percent remains in the General Fund.
Marijuana Excise Tax Revenue
By restricting the marijuana products that can be sold to individuals under 25 to low potency
products, the bill reduces revenue from the 15 percent excise tax on marijuana by $2.9 million in
FY 2025-26, $3.3 million in FY 2026-27, and similar amounts in future years. Excise tax revenue is
initially credited to the Retail Marijuana Excise Tax Cash Fund and is then transferred to be used
for the Building Excellent Schools Today (BEST) program.
Natural Medicine Facilitator Licenses
By reducing the number of products that a natural medicine products manufacturing licensee
can produce, the bill is expected to reduce the number of licenses issued, therefore reducing
license fee revenue by $55,297 in FY 2026-27, $69,121 in FY 2027-28, and similar amounts in
future years. Natural medicine products manufacturing license fee revenue is cash fund revenue
used to fund the DOR’s Natural Medicine Division. License fees are subject to TABOR.
Marijuana Fee Revenue
The bill increases revenue to the Marijuana Cash Fund by an estimated $228,641 in FY 2025-26,
$234,587 in FY 2026-27, and similar amounts in the future. The MED will raise fees for all license
applications and renewals to cover the increased expenditures to implement the bill, as
discussed in the State Expenditures and Technical Note sections below. License fees are subject
to TABOR.
State Transfers
The bill modifies or initiates four state transfers, totaling $9.5 million in FY 2025-26. Specifically,
the bill:
requires an appropriated transfer of $88,677 in FY 2025-26 and ongoing from the General
Fund to the Entrepreneur Fund, to cover the costs discussed below;
reduces by $8.1 million in FY 2025-26, $9.2 million in FY 2026-27, and similar amounts in
future years the amount of marijuana tax revenue transferred from the General Fund to the
Marijuana Tax Cash Fund; Page 6
February 27, 2025 SB 25-076
reduces by $1.4 million in FY 2025-26, $1.6 million in FY 2026-27, and similar amounts in
future years the amount of marijuana tax revenue transferred from the General Fund to the
State Public School Fund; and
reduces by $2.9 million in FY 2025-26, $3.3 million in FY 2026-27, and similar amounts in
future years the amount of marijuana tax revenue transferred from the Retail Marijuana
Excise Tax Cash Fund to the Public School Capital Construction Assistance Fund, which is
used to administer the BEST program.
State Expenditures
On net, the bill increases state expenditures by $335,000 in FY 2025-26, $359,000 in FY 2026-27,
and similar amounts in future years. These costs will be incurred in the Department of Revenue
and the Governor’s Office of Economic Development and International Trade as shown in Table
3 and described in the sections below. DOR costs impact the Marijuana Cash Fund and the
Natural Medicine Division Cash Fund, and OEDIT costs are paid from the Entrepreneur Fund.
Expenditures shown below do not include a reduction in expenditures from the Marijuana Tax
Cash Fund, Public School Capital Construction Fund, and State Public School Fund a result of the
reduced transfers discussed above.
Table 3
State Expenditures
All Departments
Department
Budget Year
FY 2025-26
Out Year
FY 2026-27
Department of Revenue $228,641 $234,587
Office of Economic Development and International Trade $106,147 $124,347
Total Costs $334,788 $358,934
Department of Revenue
Staff
DOR requires a net increase in staff to implement the bill. This includes an increase of
2.5 FTE Compliance Investigator and 0.5 FTE Legal Assistant in the MED in FY 2025-26 and
ongoing in order to conduct an estimated 425 additional investigations to ensure that persons
between the ages of 21 and 25 are not able to purchase marijuana with a THC content of
greater than 10 milligrams. This cost increase is paid from the Marijuana Cash Fund.
That increase will be partially offset by a reduction of 0.5 FTE Administrative Assistant and
0.5 FTE Compliance Investigator in the NMD due to an estimated decrease in the number of
natural medicine applications as a result of the product limitations in the bill. This cost reduction
is from the National Medicine Division Cash Fund. Page 7
February 27, 2025 SB 25-076
Costs are prorated to assume a September 2025 start date and standard capital outlay and
operating costs are included.
Undercover Operatives
DOR will employ additional undercover operatives between the ages of 21 and 25 to assist in
compliance checks. These operatives are paid $20 per hour and the fiscal note assumes a total
of 1,063 hours. Costs are paid from the Marijuana Cash Fund
Other Impacts
The MED will conduct rulemaking and provide technical assistance to businesses and local
licensing authorities in order to comply with the changes to labeling requirements, among the
bills’ other provisions. This additional workload can be accomplished within existing
appropriations.
Table 3A
State Expenditures
Department of Revenue
Cost Component
Budget Year
FY 2025-26
Out Year
FY 2026-27
Personal Services $144,013 $170,102
Operating Expenses $2,176 $2,560
Capital Outlay Costs $26,680 $0
Undercover Operatives $21,260 $21,260
Centrally Appropriated Costs $34,512 $40,665
Total Costs $228,641 $234,587
Total FTE 1.7 FTE 2.0 FTE
Office of Economic Development and International Trade
OEDIT requires 1.0 FTE Program Management to expand the existing social equity program for
marijuana entrepreneurs to any qualified individual. This staff will consult with non-cannabis
businesses, meet with new clients, develop promotional materials and provide technical
assistance to individuals who apply for social equity designee. Costs are prorated to assume a
September 2025 start date and standard operating and capital outlay costs are included. Costs
are paid from the Entrepreneur Cash Fund (formerly the Marijuana Entrepreneur Cash Fund).
OEDIT uses funding in the Entrepreneur Cash Fund for loans, grants, technical assistance and
other services for eligible social equity entrepreneurs. With the increase in eligible individuals,
expenditures from the fund may increase. The fund is continuously appropriated to OEDIT.
Page 8
February 27, 2025 SB 25-076
Table 3B
State Expenditures
Office of Economic Development
Cost Component
Budget Year
FY 2025-26
Out Year
FY 2026-27
Personal Services $80,983 $101,229
Operating Expenses $1,024 $1,280
Capital Outlay Costs $6,670 $0
Centrally Appropriated Costs $17,470 $21,838
Total Costs $106,147 $124,347
Total FTE 0.8 FTE 1.0 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 include employee
insurance and supplemental employee retirement payments, are shown in the expenditure
tables above.
Department of Public Health and Environment
The bill minimally increases workload for CDPHE to collaborate with MED on rulemaking. No
change in appropriations is required.
Department of Education
The bill reduces the amount available to spend or save from Public School Fund and for the
Building Excellent Schools Today (BEST) program due to reduced revenue from marijuana taxes.
The exact reduction in expenditures in each fiscal year will depend on future decision-making by
the General Assembly and the department.
Marijuana Tax Cash Fund
The bill reduces the amount available to spend or save from the MTCF due to reduced revenue
from marijuana taxes. Revenue in the MTCF is appropriated to multiple state agencies. Which
agencies and programs would be affected is unknown.
Page 9
February 27, 2025 SB 25-076
TABOR Refunds
The bill is expected to increase the amount of state revenue required to be refunded to
taxpayers by the amounts shown in the State Revenue section above. 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 General Fund revenue will lower the TABOR refund obligation, but result in no net
change to the amount of General Fund otherwise available to spend or save. Additionally,
decreased Cash Fund revenue will increase the amount of General Fund available to spend or
save.
Local Government
Local licensing offices for marijuana and natural medicine businesses will adjust their procedures
and coordinate with the MED to implement the bill.
Technical Note
The fiscal note assumes that increased costs for the bill will be paid from the MED Cash Fund,
and that the DOR will raise fees as necessary to ensure that it has sufficient funds to pay for
program expenses. However, the DOR reports that current spending from the fund is projected
to exceed the available fund balance. If the DOR is unable or unwilling to raise fees, General
Fund may be required, either in this bill or through the annual budget process, to ensure cash
fund solvency.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed, and applies to products manufactured, sold, or distributed on or
after that date.
State Appropriations
For FY 2025-26, the bill requires the following appropriations:
$228,166 from the Marijuana Cash Fund to the Department of Revenue and 2.5 FTE;
a decrease of $55,297 from the Natural Medicine Division Cash Fund to the Department of
Revenue, and a reduction of 0.8 FTE;
$88,677 from the General Fund to the Entrepreneur Fund, to be further appropriated from
the fund to the Office of Economic Development and International Trade, and 0.8 FTE. Page 10
February 27, 2025 SB 25-076
State and Local Government Contacts
Law
Office of Economic Development
and International Trade
Public Health and Environment
Revenue
Treasury
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.