Marijuana Tax Act of 1937: What you need to know

Last updated on December 21, 2022

7 min read

Marijuana Tax Act of 1937: What you need to know

If you are from the United States and a regular user of CBD-infused products, then you probably know that there are several laws that you need to abide. The laws that are connected to marihuana does not prohibit its use, but rather regulates it. The legalization of cannabis use – both medical and recreational, gave possibilities to the emergence of numerous cannabis-infused products. But, along the normality of marijuana usage came several laws that regulates it.

In This Article

Marihuana Tax Act: Regulation or Prohibition

How Did the Marihuana Tax Act of 1937 Operate in the United States?

Marihuana: The Origin

Marihuana Tax Act: Regulation or Prohibition

Many people oppose the legalization of cannabis use despite its life-changing benefits. Cannabis is known to treat various illnesses like depression, seizures, and asthma, so people who have chronic diseases turn to CBD alternatives. However, it can be hard to buy medical CBD because there are laws regarding the restrictions of using such therapeutic option. One of the many laws about marijuana use is the Marihuana Tax Act of 1937.

The Marihuana Tax Act of 1937 was most of the times cited as the first step of the U.S. federal government on the ban of cannabis. It was passed on the 2nd of August, year 1937. This law gave birth to all the ongoing laws regarding the prohibition and legalization of cannabis use. Through this law, the federal government of the United States built their country’s attitude towards marijuana plants, including its benefits and perils.

The law was written by Harry Anslinger, an infamous anti-cannabis prohibitionist and the head of the Federal Bureau of Narcotics (FBN). Many people argue that the law was an attempt to reduce the hemp industry. Hemp was the term used by people for cannabis in the 1930s. According to some articles about the act, three families of businessmen were threatened by the growing use of marijuanna. Eversince became famous in the United States, it became a very cheap substitute for paper pulp, a great fiber used for newspaper production. Andrew Mellon, Randolph Hearst, and the Du Pont family found hemp as a threat to the newspaper industry since they all had a major investment to it.

The Marihuana Tax Act of 1937 was originally passed to increase taxes on the use of hemp. The act did not criminalize the use or possession of marijuana. However, it included penalty and subjected marijuana possession to some regulations. The American Medical Association showed strong opposition to the act because physicians were required to pay tax for prescribing cannabis. Pharmacists also had to pay taxes for selling it. On the other hand, farmers had to acquire tax stamps for the production of fiber hemp.

How Did the Marihuana Tax Act of 1937 Operate in the United States?

Under the Marihuana Tax Act, every person who sells, acquire, dispense, or possess marijuana must register to the Internal Revenue Service and pay special occupational taxes. Under the act, selling marijuana is illegal unless there is a written order of transferee between the buyer and seller. Also, there is a transfer tax to be paid upon transferring of marijuana from the buyer to seller. There is also an order form that must be issued, and it must carry the name and address of both the buyer and the seller, as well as the amount of marijuana to be purchased.

After the Marihuana Tax Act of 1937 went into effect, the Bureau of Narcotics arrested Moses Baca for marijuana possession. Baca was a Mexican-American and was the first victim of the federal government’s war against drugs. He was arrested for the possession of quarter-pound marijuana in a drawer inside his rooming house. Another person who was convicted because of the law was Samuel Caldwell. Caldwell was arrested for marijuana dealing. Baca and Caldwell were the first people to be convicted for not paying marijuana tax. Baca was sentenced to be convicted for 18 months while Caldwell was convicted for four years.

In the year 1967, the Commission on Law Enforcement and Administration of Justice came into the picture. The act raised an insignificant amount of tax to people who possess marijuana. The Marihuana Tax Act then became a criminal law, imposing sanctions for people who buy, sell, and possess it.

Many people say that the Marihuana Tax Act was indeed unconstitutional. The proponent of these act drafted it for all the wrong reasons. Anslinger was appointed on the Federal Bureau of Narcotics, but he knew about the weakness of his position. So, he made it his mission to get rid of all narcotics. His significant influence made a huge impact on causing drug scare among the public. In his radio address, he said that marijuana could cause psychosis and insanity. The intoxication of marijuana causes mental deterioration, which then turns into crimes and murder. His radio address caused many people to see marijuana negatively rather than a good and cheap substitute for synthetic fiber. In short, Anslinger demonized marijuana usage in the United States by drafting a law that prohibits it. Anslinger made it look like marijuana only bring negative effects to people when in reality, there is a long list of positive effects of marijuana to its consumers.

Marihuana: The Origin

In the 1930s, marihuana was the original spelling for the drug. Since the term “marijuana” was coined, it had been intertwined with race and ethnicity. The word “marijuana” was said to be from the Mexicans. Cannabis had a bad reputation in Mexico even before it had a bad reputation in the United States. According to Anslinger, he had found evidence that Mexicans were crossing the borders of the U.S. to buy cannabis and take it back to Mexico.

In 1910, the word “marijuana” did not exist in American culture. The more commonly use the word “cannabis” to refer to the drug. The Great Depression took place in the United States, and the government found something to blame. Massive unemployment and social unrest took place under the said Great Depression. Because of the influx of immigrants, the federal government began treating marijuana as a foreign substance brought by Mexicas just so they could blame someone for the Great Depression. The citizens of the U.S stoked great resentment to Mexicans because they were to blame for the uncontrolled emergence of the “evil weed.” This step of the U.S. federal government corrupted the minds of the Americans.

Because marijuana was coined by the U.S. as the evil weed, a lot of people feared it despite its numerous health benefits. Cannabis oil, for instance, may help with anxiety and reduce the effects of depression. Up to these days, marijuana is illegal in the United States, so not all people are aware of its benefits.

What most people do not know is that cannabidiol, a substance from marijuana, does not cause a euphoric effect when taken. Rather, it serves as a good medical alternative because of its long list of positive effects to one’s health. There are a lot more CBD facts that most people are unaware regarding the marijuana intake, so they fear it. A lot of research nowadays serve as a good guide in educating one’s self with regards to marijuana and it life-changing medical effects.

There are lots of mysteries regarding the connection of marijuana to the Mexicans and the United States. Some research says that the U.S. Government demonized marijuana so that they could blame the Mexicans for the Great Depression, the economic downfall of the industrialized world. But whatever the truth is, it is essential to know that cannabis use is legalized as long as the usage is regulated.

If you want to know more about the history of marijuana up to its infamous infusion to different products these days, you can read some articles online about the history of cannabis.

Good reads on American Marijuana:

Written By

Dwight Blake

Dwight was a Mental Health counselor at Long Island Psychotherapy & Counseling in Westbury, New York for more than 15 years. He believes that CBD is the prime solution to this mental illness and more-- with proper research, medical acknowledgment, and application. Through his work at AmericanMarijuana, together with the rest of the team, he wishes to provide everyone with genuine results and high-quality product reviews for everyone to enjoy for free.