In the US, legal weed businesses are legally obligated to pay taxes on gross profits, even though the majority of industries pay based on net profits. Because marijuana remains a federal controlled substance, sellers of recreational marijuana cannot claim deductions, and in some states, they must charge a 27.9% tax, which encourages consumers to shop elsewhere (illegally).

The Marijuana Tax Equity Act, proposed in 2013, would end federal prohibition on marijuana, but would also tax it at 50%. Even with that high of a tax, the bill could be an improvement to the current situation.

Find out how it this effects Colorado and more art Forbes.