Proof You Were Paying Too Much

As every Colorado licensee already knows, the AMR underlying our excise tax bills has been horribly skewed for years - and only in one direction. The distortion exploits legitimate operators, with vertically integrated licensees bearing the brunt: they must use the published AMR for internal transfers, so every dollar of inflation lands directly on their tax bill.

The rate that triggered a department-wide emergency was, by all available evidence, the most accurate AMR ever published - the first time the number had landed anywhere near what the market actually paid. The scandal is not the 89% drop. It is the years of inflation that preceded it. That is what the Governor’s office chose to suppress.

The Allegations

Colorado’s AMR is calculated by monitoring contract transactions between non-affiliated licensees.
Statute and regulation require a separate AMR for each of seven product categories.
MED manipulates the AMR by blending separate statutory categories:
- Bud with Bud Allocated for Extraction
- Bud with Trim Allocated for Extraction
Shake/Trim is included on the same suspicion: blending hasn’t been directly documented for this category, but the published rate sits well above what the market actually pays - consistent with MED’s documented willingness to manipulate the others.
The blending is done exclusively to skew the rate upward, with documented inflation of as much as 17× the market rate (Bud Allocated for Extraction).
MED admitted the blending in writing in March 2025.
When one bad-actor group exited the market, the rate collapsed 89% in one quarter ($349 → $40/lb).
Three claims: TABOR violation, ultra vires conduct, and procedural due process violation.

What Class Members Stand to Recover

Refund of excise tax overpaid under the unlawful AMR.
10% annual interest from the date of initial illegal collection (Colo. Const. art. X, § 20(1)).
Halt of audit referrals and penalties premised on the unlawful AMR.
Methodology fix: separate AMR for each of the seven statutory categories.
Transparency: public quarterly disclosure of transaction-level data.

The Evidence

Evidence of Data Manipulation

Three internal MED/DOR communications, in chronological order, from a Google Vault email thread (March 7-10, 2025). ORA - the Department’s Office of Research and Analysis - discovers the AMR drop, MED’s data analytics manager admits the blending in writing, and ORA escalates the categorization rule to senior staff.

March 7, 2025 · 3:33 PM · The Discovery

ORA Team to Jacob Comer, MED Data Analytics Manager

From: DOR_ORA - DOR, DOR <dor_ora@state.co.us>
Date: Fri, Mar 7, 2025 at 3:33 PM
Subject: April 2025 AMR Transfer Data Question - Action Needed by 3/10 (ENCRYPT)
To: Jacob Comer - DOR <jacob.comer@state.co.us>

Hello Jacob,

In the April 2025 AMR calculation, we are seeing a very large decrease in the bud allocated for extraction median (going from $349 in January to $40 in April). There is an increase in the number of transfers on the lower end of receiver price per unit, and a decrease in transfers on the higher end. [redacted]

Can you please take a look at the attached April and January bud allocated for extraction transfer data? Is there any concern about the validity of the transfer data in April for this category? Do you have any insights as to why the category has changed so drastically?

What this shows: ORA flags an 89% one-quarter collapse in the published Bud-for-Extraction rate ($349 in January → $40 in April) and asks the data team to explain it.

March 8, 2025 · 10:22 AM · The Admission

Jacob Comer, MED Data Analytics Manager

From: Jacob Comer <jacob.comer@state.co.us>
Date: Saturday, March 8, 2025 at 10:22:44 AM Mountain Standard Time
To: dor_ora@state.co.us - DOR_ORA - DOR, DOR
Cc: DOR_MED_Data_Analytics@state.co.us, briana.drayton@state.co.us

Ok, so we’re mixing two different categories of records by including both Transfers labeled Allocated for Extraction and Transfers that are not labeled Allocated for Extraction sent to a MIP in the same calculation. So if you remove the Bud Transfers from the January report, the median is about $20/lb. If you do the same for April, it’s about $10/lb. While that is still a decrease of 50%, it’s not saying that April is 10% of January, and it’s more believable that $20 could go down to $10 than $400 could go down to $40.

[redacted]

If the first-Transfer issue is present here, I would assume it’s present in all of the AMR reports.

What this shows: MED’s own data team admits in writing that (i) MED is blending two categories the regulation requires to be calculated separately; (ii) the true extraction-only rate was around $20/lb against a published $349 - roughly 17× inflation; and (iii) the same blending issue likely affects every other AMR report, not just Bud for Extraction. (Editor's note: Comer's “$400” is round-number shorthand for the actual published Bud Allocated for Extraction rate of $349/lb.)

March 10, 2025 · 2:39 PM · The Mechanism

ORA Team to DOR senior staff (Drayton, Pens, Lambert)

ORA is processing the April 2025 AMRs. We noticed something irregular in the data for bud allocated for extraction. Please see the quoted text below for full details, but here is the summary:

We are seeing a very large decrease in the bud allocated for extraction median (going from $349 in January to $40 in April). There is an increase in the number of transfers on the lower end of receiver price per unit, and a decrease in transfers on the higher end.

We reached out to Jacob on the MED data team about what we saw in the data. He looked into it, and we have some questions, but generally his reply makes us wonder if the way we currently categorize transfers as bud allocated for extraction is not right. For years we have been classifying a transfer as “bud allocated for extraction” if it meets one of two criteria: 1) category in Metrc is Bud Extract or 2) category in Metrc is Bud and it is transferred to a MIP.

What this shows: ORA escalates internally and exposes the destination-based proxy: any Bud sent to a manufacturing licensee has been auto-reclassified as extraction-allocated - and this rule has been in effect for years, distorting the rate the entire time.

Source: Google Vault export - thread “Fwd: April 2025 AMR Transfer Data Question - Action Needed by 3/10 (ENCRYPT),” March 7-10, 2025. Black bars are redactions in the original Vault export.

Caught in Real Time

MED Retracts Published Rates

On or about March 21, 2026, MED published the AMR rates for Q2 2026 on the Department of Revenue’s website. Within weeks - without announcement, notice, or explanation - MED retroactively altered the same page to show different numbers. Both versions are reproduced below; the replacement sheet carries the percent change next to each value that moved (red for cuts, green for increases).

Originally Published

Period: April 1 through June 30, 2026

Retail Bud	$607 per pound
Retail Trim	$204 per pound
Bud Allocated for Extraction	$403 per pound
Trim Allocated for Extraction	$95 per pound
Retail Immature Plant	$15 per plant
Wet Whole Plant	$91 per pound
Seed	$9 per seed

Captured from MED’s rate page before the retraction

Quietly Replaced With

Period: April 1 through June 30, 2026

Retail Bud	$648 per pound +6.8%
Retail Trim	$204 per pound
Bud Allocated for Extraction	$275 per pound −31.8%
Trim Allocated for Extraction	$85 per pound −10.5%
Retail Immature Plant	$15 per plant
Wet Whole Plant	$91 per pound
Seed	$7 per seed −22.2%

Captured from MED’s rate page on April 25, 2026

Why this matters. The retraction backs the case on three fronts. First, the Bud Allocated for Extraction rate was cut by nearly a third (−31.8%) - the exact category at the heart of the lawsuit. Second, Trim Allocated for Extraction was cut alongside it (−10.5%), directly corroborating MED’s own internal admission that “the first-Transfer issue is present in all of the AMR reports” (Comer email, March 8, 2025). Third, Retail Bud was simultaneously raised (+6.8%) - tax revenue isn’t being lost; it is being shifted off lower-value extraction product onto higher-value bud, exactly the upward-only skew the Complaint alleges.

Sources: Originally published rates - MED rate page captured before retraction. Replacement rates - MED rate page (tax.colorado.gov/average-market-rate), saved April 25, 2026 at 6:01 AM. Both visuals are reproductions of MED’s table presentation; the underlying rates are verifiable against MED’s current and historical AMR spreadsheet at tax.colorado.gov.

The Attempted Cover-Up

The Executive Director Reviewed the Data - and Chose to Publish the Inflated Rate.

The March 7-10 emails establish that ORA discovered the rate distortion and that Jacob Comer (MED Data Analytics Manager) admitted the unlawful blending methodology in writing. A second Google Vault thread - Re: April 2025 AMR - Final Documents Attached, March 14-18, 2025 - reveals what happened next: publication was halted, the matter was escalated all the way to Heidi Humphreys, the Executive Director of the Colorado Department of Revenue and the Governor’s direct appointee overseeing the agency. After her office reviewed the data, the decision was made to publish the inflated rate anyway. When the Department’s communications team asked how to explain the near-90% collapse to reporters, the Director of Tax Policy drafted a response invoking taxpayer confidentiality - while knowing precisely what had caused the drop.

March 14, 2025 · 2:55 PM · The Hold

Brendon Reese, Senior Director, Taxation Division

From: brendon.reese@state.co.us - Reese - DOR, Brendon
Date: Friday, March 14, 2025 at 2:55 PM
To: heather.draper@state.co.us - Draper - DOR, Heather

Can we please hold on publishing the AMR? MED and Tax are talking with Heidi about the reduction in Bud Allocated for Extraction.

What this shows: Six days after Comer’s written admission, the Senior Director of Taxation personally halts publication and names the Executive Director of the Department of Revenue - “Heidi” - as the decision-maker being consulted. The communications team responds: “No problem! We are not in a rush.”

March 17, 2025 · 2:39 PM · The Decision

Executive Director and Governor’s Office Sign Off

From: brendon.reese@state.co.us - Reese - DOR, Brendon
Date: Monday, March 17, 2025 at 2:39 PM
To: heather.draper@state.co.us - Draper - DOR, Heather
Cc: jacob.comer@state.co.us - Comer - DOR, Jacob

Good afternoon,

Heidi and the Gov’s office have reviewed the AMR data and we will be using the original calculation. I know we did some additional analysis. Thank you for that effort.

Elizabeth is going to give the final approval after coordinating with Conner in the Gov’s office. I think she is aiming to post the AMR tomorrow.

What this shows: The Executive Director of the Department of Revenue - the Governor’s direct appointee and the highest authority in the agency - personally reviewed the AMR data alongside the Governor’s office and directed publication of the original calculation. This is not a mid-level staff error. This is a decision made at the apex of the agency, with the Governor’s office in the room, taken in full knowledge that the underlying methodology was unlawful. Jacob Comer - who admitted the blending nine days earlier - is copied on the directive.

Add your name to the class.

You may have a claim if you held a Colorado cultivation, MIP, retail, or vertically integrated license at any point during the affected period - even if you’ve since exited the market. Two minutes to add your name. No commitment.

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The Mystery Behind Inflated AMR Has Been Solved.