Learn | 12.01.2022

Stonerpedia: What Is The Marihuana Tax Act of 1937?

A brief history lesson on when and how cannabis prohibition began.

The 1930s had a significant influence on how we see weed today.

When looking back, cannabis and hemp had a very important cultural and societal role in the past. Hemp was largely used in textile industries, and cannabis had a very popular demand in the medicinal and therapeutic sectors.

Then, society took a turn and decided to ban and pursue a war against many substances. Hemp and cannabis took collateral damage. In reality, there was a huge war on flower, and one of the last hits was the Marihuana Tax Act of 1937.

While the Act was framed as a cannabis tax, it actually served as the groundwork for cannabis regulation in the United States. Simply put, it was a turning-point moment in the United States’ relationship with marijuana, one that took a turn for the worst.

 

 

What Did The Marihuana Tax Act Of 1937 Intend?

In the late 1930s, there was a global shift in favor of cannabis prohibition.

The federal government of the USA was under increasing pressure to regulate marijuana use and production. Their tactic was peculiar and pretty indirect.

Although the Tax Act did not criminalize cannabis use or possession, it did subject users and distributors to:

  • High taxes
  • Punitive penalties
  • Strict regulations

The Act imposed a $1 tax on anyone who uses cannabis in any form, including:

  • Physicians
  • Dentists
  • Researchers
  • Veterinarians
  • Growers
  • Consumers

The Act also imposed a tax on cannabis transfers from buyers to sellers. Importers, manufacturers, and compounders were to pay a yearly fee of $24.

Looking back, cannabis was extremely popular. It is a remedy being rediscovered today, but the tax simply made people stray from the benefits for financial reasons.

 

The Consequences Of Breaking The Marihuana Tax Act Of 1937

A dollar tax might not seem like much. However, when you look at the penalty provisions set by Regulation No. 1, you see just how harsh the measures were.

Failing to follow the rules or fill out appropriate forms could result in:

  • Police inspections
  • Sworn statements
  • Punitive fines

Tax evasion would result in five years in prison, a $2,000 fine, or both. A later version of the Act even mandated a life sentence for selling marijuana to a minor.

Medicinal use of cannabis was highly unregulated before the Tax Act of 1937. After so many requirements, many physicians stopped prescribing cannabis altogether.

Forms had to be filled out with the patient’s name and address, their ailment, and the dates and amounts of cannabis prescribed. Failure to follow the rules could result in imprisonment and a large fine for both the patient and the doctor.

 

How Did The Marihuana Tax Act of 1937 Affect Hemp?

In the early 20th century, commercial sales of hemp fiber, seeds, and oil were hot in the United States.

Some academics believe the Act was made to weaken the hemp industry, which was threatening the monopoly of paper pulp. The combined lobbying efforts of tycoons such as Andrew Mellon and newspaper magnate Randolph Hearst may have also aided in the passage of the Tax Act of 1937.

The Act had far-reaching consequences. The legislation also included industrial hemp, making hemp production in the United States extremely difficult and financially unviable.

The Marijuana Tax Act of 1937 effectively ended hemp production in the United States. Following the Tax Act, additional legislation, such as the Boggs Act of 1951 and the Controlled Substances Act, further established hemp and cannabis as illegal.

It wasn’t until the 2018 Farm Bill that made the possession, production, sale, and cultivation of cannabis and hemp under 0.3% THC legal.

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