A federal bill proposed in March has the potential to push legal cannabis consumers into the black market.

The H.R. 1823 – Marijuana Revenue and Regulation act was introduced in the House of Representatives by Rep. Carlos Curbelo (R-FL) and Rep. Earl Blumenauer (D-OR) and in the Senate by Sen. Ron Wyden (D-OR), Sen. Rand Paul (R-KY), and Sen. Michael Bennet (D-CO). The bill would establish a federal tax on all legal sales in the country, at a rate of 10 percent on retail cannabis sales in 2018 and increase to a maximum of 25 percent after five years of implementation.

The proposed tax rate is much higher than other federal excise tax rates inlacing alcohol and cigarettes which have rates of 4.5 percent and 12.5 percent, respectively.

Some states such as Washington would see a total cannabis tax rate exceeding 60 percent under the new bill, as the state already imposes a 37 percent rate on top of sales and local taxes. These high tax rates could potentially lead consumers to purchase from the illicit market as they seek cheaper alternatives to legal cannabis.