2026 Tobacco Master Settlement Agreement Forecast

Colorado receives annual payments from tobacco manufacturers as part of the Tobacco Master Settlement Agreement (MSA). The Tobacco MSA was reached in 1998 between certain tobacco manufacturers (known as “participating manufacturers”) and the governments of 52 states and territories. Under the MSA, participating tobacco manufacturers are released from health‑related claims associated with their products in exchange for making perpetual annual payments to states. Payments made to Colorado under this agreement are exempt from TABOR as a damage award.

This document presents a forecast for annual receipts from the Tobacco MSA through 2028. Payments are received each April, and each payment determines how much will be distributed to MSA‑funded programs in the following fiscal year. In April 2025, the state received $77.0 million, which determined distributions for the current FY 2025-26. The state is expected to receive $72.3 million in 2026, $68.5 million in 2027, and $65.2 million in 2028.