The "punishment rate" as measured by the Pew Foundation is a state's incarceration rate per capita, normalized to reflect the rate at which various serious crimes for which there is good information available are committed in a state.
Thus, a state with a middling incarceration rate could have a high punishment rate if it incarcerates so many people despite having a very low crime rate, or could have a low punishment rate if it has a much higher than average crime rate.
Colorado currently is very close to the U.S. average for its punishment rate and its incarceration rate.
But, this wasn't always the case. No state in the United States has seen its punishment rate increase more rapidly over the two decades from 1983 to 2013, during which Colorado's punishment rate increased by 417% and its incarceration rate increased by 271% (the 6th fastest growth rate in the nation).
The lowest increase in the punishment rate over that time period was in North Carolina, where it increased only 17% (it is now 372). Nationwide, the average increase in the punishment rate over that two decade time period has been 165%, while the incarceration rate has increased nationally by 149% (reflecting a modest drop in crime between 1983 and 2013).
Basically, over the last twenty years, Colorado has gone from being one of the most lenient in the nation in incarcerating people per comparable crime committed, to average. No state in the nation today has a punishment rate as low as Colorado's was in 1983. (It is now 469 and was about 100).
For the most part, this happened because the legislature decided to enact higher sentences for the same crimes and to pay for the prisons needed to incarcerate the people sentenced under those new laws.