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Marihuana Tax Act of 1937: A Brief History of Cannabis Prohibition

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Before cannabis was outlawed, it was a huge resource for the start of America. It was used to medically treat people and produced raw material and goods. So why was it made illegal a few centuries later?

The Importance of Cannabis Prior to 1937

Prior to 1937, cannabis had a wide range of uses. It was used medically to treat nausea, inflammation, headaches, pain, sleeplessness and other ailments. In the 1800s, marijuana extracts were sold in pharmacies throughout the United States and as well as in Europe. William O’Shaughnessy was credited with introducing it to western medicine. During the mid-1600s, industrial hemp production was increased and typically imported into England. It was a significant part of the new colony’s economy. George Washington grew hemp and encouraged other Americans to do the same. Hemp production eventually overshadowed cotton.

Hemp comes from the stalky part of certain Cannabis Sativa plants breed for industrial purposes. Hemp contains low amounts of psychoactive traces of tetrahydrocannabinol (THC). According to Farm Collector, hemp was used to make rope, paper, cloth, sails, sacks and more leading up the to the Revolutionary War. Hemp’s popularity declined when anti-hemp propaganda was created by people who had vested interest in lumber and synthetic textiles. William Randolph Hearst, the newspaper mogul supposedly had investments in timber and paper.

George Washington Hemp Grower
Pendleton’S Lithography, and Gilbert Stuart. George Washington, first president of the United States. , 1828. [?] Photograph. https://www.loc.gov/item/96523313/.

The Mexican Revolution Leading to Immigration to the North

The Mexican Revolution lasted ten bloody years; between the years of 1910 to 1920. The poor and middle class revolted against a corrupt wealthy class and government. Mexican war refugees and people exiled for political reasons fled north of the border.

The border patrol formed at the Mexican-American border after Mexico lost the Mexican-American War (April 25, 1846 – February 2, 1848) and was forced to sell territories which are present-day Arizona, California, Colorado, New Mexico, Utah, and Wyoming. The border patrol did not strictly prevent migrants from entering American until the Mexican Revolution was in full swing to prevent violent war conflicts from spilling over to the north1.

Photo by Pablò on Unsplash

According to the Library of Congress, the number of Mexicans who obtain legal status grew from around 20,000 to about 50,000 – 100,000 migrants per year during the 1920s2. Mexicans with them traditions of using hallucinogen like peyote and marijuana. The name marijuana is Mexican in origin. The exact history of the name unknown but it is believed to come from combining two Spanish female names Mari and Juana or Juanita. According to Time3, the Spanish first brought marijuana to Mexico in the 16th century. Although the first breeds were used for industrial fiber. Cannabis other hallucinogens were not socially accepted in Mexico either because they were associated with the devil and was considered unholy in the majority Catholic society.

The American Press Spread Fear About Marijuana

In the midst of the migrations, a Texas police officer reportedly said “[Other] police officers in Texas claimed that marijuana incited violent crimes, aroused a ‘lust for blood,’ and gave its users ‘superhuman strength.’ Rumors spread that Mexicans were distributing this ‘killer weed’ to unsuspecting American schoolchildren.” In truth, according to the Drugabuse.com, “When it comes to what substance will put someone at risk for getting hurt or hurting others, alcohol is considered to cause the most harm.4” Regardless of the truth, the rumors effectively spread inciting fear about both marijuana and Mexicans.

The fight against marijuana was an anti-immigration fight.

American newspapers commonly published sensationalized headlines such has “Smoking weed turns Mexicans into beasts”, “Evil Mexican plant drives you insane”, “Mexican ‘dream drug’ feared here, wafts users into condition of coma and leads, in the end, to insanity”. The fight against marijuana was an anti-immigration fight as shown in the newspaper headlines. An example of the racist rhetoric comes from Harry Anslinger, head of the Federal Bureau of Narcotics between the years of 1930 – 1962. Anslinger said in a testimony before congress, “I wish I could show you what a small marihuana cigaret can do to one of our degenerate Spanish-speaking residents. That’s why our problem is so great; the greatest percentage of our population is composed of Spanish-speaking persons, most of who [sic] are low mentally, because of social and racial conditions.”

In 1936, just a year before the Marihuana Act of 1937 was enacted, the anti-marijuana propaganda film, Reefer Madness was released. Reefer Madness depicted a series of troubling events after young adults use marijuana. They hallucinate, murder and attempt to rape. The film frightened an unknowing audience into demanding political results.


Read the Original Act Passed by Congress on August 2, 1937

From 75th Congress, 1st Session—CHS. 552, 553—August 2, 1937
To impose an occupational excise tax upon certain dealers in marihuana, to impose a transfer tax upon certain dealings in marihuana, and to safeguard the revenue therefrom by registry and recording.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That when used in this Act-
(a) The term “person” means an individual, a partnership, trust, association, company, or corporation and includes an officer or employee of a trust, association, company, or corporation, or a member or employee of a partnership, who, as such officer, employee, or member, is under a duty to perform any act in respect of which any violation of this Act occurs.
(b) The term “marihuana” means all parts of the plant Cannabis satlva L., whether growing or not; the seeds thereof; the resin extracted from any part of such plant; and every compound, manufacture, salt, derivative, mixture, or preparation of such plant, its seeds, or resin; but shall not include the mature stalks of such plant, fiber produced from such stalks, oil or cake made from the seeds of such plant, any other compound, manufacture, salt, derivative, mixture, or preparation of such mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of such plant which is incapable of germination.
(c) The term “producer” means any person who (1) plants, cultivates, or in any way facilitates the natural growth of marihuana; or (2) harvests and transfers or makes use of marihuana.
(d) The term “Secretary” means the Secretary of the Treasury and the term “collector” means collector of internal revenue.
(e) The term “transfer” or “transferred” means any type of disposition resulting in a change of possession but shall not include a transfer to a common carrier for the purpose of transporting marihuana.

SEC. 2. (a) Every person who imports, manufactures, produces, compounds, sells, deals in, dispenses, prescribes, administers, or gives away marihuana shall (1) within fifteen days after the effective date of this Act, or (2) before engaging after the expiration of such fifteen-day period in any of the above-mentioned activities, and (3) thereafter, on or before July 1 of each year, pay the following special taxes respectively:
(1) Importers, manufacturers, and compounders of marihuana, $2 per year.
(2) Producers of marihuana (except those included within subdivision (4) of this subsection), $1 per year, or fraction thereof, duringwhich they engage in such activity.
(3) Physicians, dentists, veterinary surgeons, and other practitioners who distribute, dispense, give away, administer, or prescribe marihuana to patients upon whom they in the course of their professional practice are in attendance, $1 per year or fraction thereof during which they engage in any of such activities.
(4) Any person not registered as an importer, manufacturer, producer, or compounder who obtains and uses marihuana in a laboratory for the purpose of research, instruction, or analysis, or who produces marihuana for any such purpose, $1 per year, or fraction thereof, during which he engages in such activities.
(5) Any person who is not a physician, dentist, veterinary surgeon,
or other practitioner and who deals in, dispenses, or gives away
red dealers, marihuana, $3 per year: Provided, That any person who has registered and paid the special tax as an importer, manufacturer, compounder, or producer, as required by subdivisions (1) and (2) of this subsection, may deal in, dispense, or give away marihuana imported, manufactured, compounded, or produced by him without further payment of the tax imposed by this section. tationof tax. (b) Where a tax under subdivision (1) or (5) is payable on July 1 of any year it shall be computed for one year; where any such tax is payable on any other day it shall be computed proportionately from the first day of the month in which the liability for the tax accrued to the following July 1. hanoneplace (c) In the event that any person subject to a tax imposed by this section engages in any of the activities enumerated in subsection (a)of this section at more than one place, such person shall pay the tax with respect to each such place. than one ao (d) Except as otherwise provided, whenever more than one of the activities enumerated in subsection (a) of this section is carried on by the same person at the same time, such person shall pay the tax for each such activity, according to the respective rates prescribed. tation re- (e) Any person subject to the tax imposed by this section shall, upon payment of such tax, register his name or style and his place or places of business with the collector of the district in which such place or places of business are located. (f) Collectors are authorized to furnish, upon written request, toany person a certified copy of the names of any or all persons who
may be listed in their respective collection districts as special taxpayers under this section, upon payment of a fee of $1 for each one hundred of such names or fraction thereof upon such copy so
requested. r of rgis- SEC. 3. (a) No employee of any person who has paid the special
tax and registered, as required by section 2 of this Act, acting within the scope of his employment, shall be required to register and pay such special tax. officials ex- (b) An officer or employee of the United States, any State, Territory, the District of Columbia, or insular possession, or political subdivision, who, in the exercise of his official duties, engages in any
of the activities enumerated in section 2 of this Act shall not be required to register or pay the special tax, but his right to this

75TH CONGRESS, 1ST SESSION-CH. 553-AUGUST 2, 1937
exemption shall be evidenced in such manner as the Secretary may
by regulations prescribe.
SEC. 4. (a) It shall be unlawful for any person required to register and pay the special tax under the provisions of section 2 to
import, manufacture, produce, compound, sell, deal in, dispense,
distribute, prescribe, administer, or give away marihuana without
having so registered and paid such tax.
(b) In any suit or proceeding to enforce the liability imposed by
this section or section 2, if proof is made that marihuana was at any
time growing upon land under the control of the defendant, such
proof shall be presumptive evidence that at such time the defendant
was a producer and liable under this section as well as under section 2.
SEC. 5. It shall be unlawful for any person who shall not have paid
the special tax and registered, as required by section 2, to send, ship,
carry, transport, or deliver any marihuana within any Territory, the
District of Columbia, or any insular possession, or from any State, Territory, the District of Columbia, any insular possession of the United
States, or the Canal Zone, into any other State, Territory, the District
of Columbia, or insular possession of the United States: Provided,
That nothing contained in this section shall apply to any common
carrier engaged in transporting marihuana; or to any employee of
any person who shall have registered and paid the special tax as
required by section 2 while acting within the scope of his employment; or to any person who shall deliver marihuana which has been
prescribed or dispensed by a physician, dentist, veterinary surgeon,
or other practitioner registered under section 2, who has been
employed to prescribe for the particular patient receiving such
marihuana; or to any United States, State, county, municipal, District, Territorial, or insular officer or official acting within the scope
of his official duties.
SEC. 6. (a) It shall be unlawful for any person, whether or not
required to pay a special tax and register under section 2, to transfer
marihuana, except in pursuance of a written order of the person to
whom such marihuana is transferred, on a form to be issued in blank
for that purpose by the Secretary.
(b) Subject to such regulations as the Secretary may prescribe,
nothing contained in this section shall apply-
(1) To a transfer of marihuana to a patient by a physician, dentist,
veterinary surgeon, or other practitioner registered under section 2,
in the course of his professional practice only: Provided, That such
physician, dentist, veterinary surgeon, or other practitioner shall keep
a record of all such marihuana transferred, showing the amount
transferred and the name and address of the patient to whom such
marihuana is transferred, and such record shall be kept for a period
of two years from the date of the transfer of such marihuana, and
subject to inspection as provided in section 11.
(2) To a transfer of marihuana, made in good faith by a dealer
to a consumer under and in pursuance of a written prescription issued
by a physician, dentist, veterinary surgeon, or other practitioner registered under section 2: Provided, That such prescription shall be
dated as of the day on which signed and shall be signed by the physician, dentist, veterinary surgeon, or other practitioner who issues the
same: Provided further, That such dealer shall preserve such prescription for a period of two years from the day on which such
prescription is filled so as to be readily accessible for inspection by
the officers, agents, employees, and officials mentioned in section 11.
(3) To the sale, exportation, shipment, or delivery of marihuana
by any person within the United States, any Territory, the District
of Columbia, or any of the insular possessions of the United States.
to any person in any foreign country regulating the entry of mari553
Certain activities
without registration and payment of tax, unlawful.
Presumptive evidence of production. and liability therefor.
Shipments, etc., ex- cept as prescribed, un- lawful.

75TH CONGRESS, IST SESSION-CH. 553-AUGUST 2, 1937
huana, if such sale, shipment, or delivery of marihuana is made in
accordance with such regulations for importation into such foreign
Promulgation of country as are prescribed by such foreign country, such regulations
to be promulgated from time to time by the Secretary of State of
the United States.
Use by public offi- (4) To a transfer of marihuana to any officer or employee of the
United States Government or of any State, Territorial, District,
county, or municipal or insular government lawfully engaged in
making purchases thereof for the various departments of the Army
and Navy, the Public Health Service, and for Government, State,
Territorial, District, county, or municipal or insular hospitals or
prisons.
Transfer seeds to (5) To a transfer of any seeds of the plant Cannabis sativa L. to
any person registered under section 2.
ration, sale, epac. (c) The Secretary shall cause suitable forms to be prepared for
the purposes before mentioned and shall cause them to be distributed
to collectors for sale. The price at which such forms shall be sold
by said collectors shall be fixed by the Secretary, but shall not exceed
2 cents each. Whenever any collector shall sell any of such forms he
shall cause the date of sale, the name and address of the proposed
vendor, the name and address of the purchaser, and the amount of
marihuana ordered to be plainly written or stamped thereon before
delivering the same. se of (d) Each such order form sold by a collector shall be prepared
by him and shall include an original and two copies, any one of
which shall be admissible in evidence as an original. The original
and one copy shall be given by the collector to the purchaser thereof.
The original shall in turn be given by. the purchaser thereof to
any person who shall, in pursuance thereof, transfer marihuana to
him and shall be preserved by such person for a period of two years
so as to be readily accessible for inspection by any officer, agent, or
employee mentioned in section 11. The copy given to the purchaser
by the collector shall be retained by the purchaser and preserved
for a period of two years so as to be readily accessible to inspection
by any officer, agent, or employee mentioned in section 11. The
second copy shallbe preserved in the records of the collector.
A tnter, 53. . SEC. 7. (a) There shall be levied, collected, and paid upon all
transfers of marihuana which are required by section 6 to be carried
out in pursuance of written order forms taxes at the following rates:
1
Rs
) Upon each transfer to any person who has paid the special tax
and registered under section 2 of this Act, $1 per ounce of marihuana
or fraction thereof.
(2) Upon each transfer to any person who has not paid the special
tax and registered under section 2 of this Act, $100 per ounce of
marihuana or fraction thereof.
feree; by traseor. (b) Such tax shall be paid by the transferee at the time of securing
each order form and shall be in addition to the price of such form.
Such transferee shall be liable for the tax imposed by this section
but in the event that the transfer is made in violation of section 6
without an order form and without payment of the transfer tax
imposed by this section, the transferor shall also be liable for such
Payment by means ax.
of stamps. (c) Payment of the tax herein provided shall be represented by
appropriate stamps to be provided by the Secretary and said stamps
shall be affixed by the collector or his representative to the original
order form.
made applicable (d) All provisions of law relating to the engraving, issuance, sale,
Internal revenue accountability, cancelation, and destruction of tax-paid stamps protamps. vided for in the internal-revenue laws shall, insofar as applicable and
554
75TH CONGRESS, 1ST SESSION-CH. 5.,3-AUGUST 2, 1937
not inconsistent with this Act, be extended and made to apply to
stamps provided for in this section.
(e) All provisions of law (including penalties) applicable in
respect of the taxes imposed by the Act of December 17, 1914 (38
Stat. 785; U. S. C., 1934 ed., title 26, secs. 1040-1061, 1383-1391), as
amended, shall, insofar as not inconsistent with this Act, be applicable in respect of the taxes imposed by this Act.
SEC. 8. (a) It shall be unlawful for any person who is a transferee required to pay the transfer tax imposed by section 7 to acquire
or otherwise obtain any marihuana without having paid such tax;
and proof that any person shall have had in his possession any marihuana and shall have failed, after reasonable notice and demand by
the collector, to produce the order form required by section 6 to be
retained by him, shall be presumptive evidence of guilt under this
section and of liability for the tax imposed by section 7.
(b) No liability shall be imposed by virtue of this section upon
any duly authorized officer of the Treasury Department engaged in
the enforcement of this Act or upon any duly authorized officer of
any State, or Territory, or of any political subdivision thereof, or the
District of Columbia, or of any insular possession of the United
States, who shall be engaged in the enforcement of any law or municipal ordinance dealing with the production, sale, prescribing, dispensing, dealing in, or distributing of marihuana.
SEC. 9. (a) Any marihuana which has been imported, manufactured, compounded, transferred, or produced in violation of any
of the provisions of this Act shall be subject to seizure and forfeiture and, except as inconsistent with the provisions of this Act,
all the provisions of internal-revenue laws relating to searches, seizures, and forfeitures are extended to include marihuana.
(b) Any marihuana which may be seized by the United States
Government from any person or persons charged with any violation
of this Act shall upon conviction of the person or persons from whom
seized be confiscated by and forfeited to the United States.
(c) Any marihuana seized or coming into the possession of the
United States in the enforcement of this Act, the owner or owners
of which are unknown, shall be confiscated by and forfeited to the
United States.
(d) The Secretary is hereby directed to destroy any marilluana
confiscated by and forfeited to the United States under this section
or to deliver such marihuana to any department, bureau, or other
agency of the United States Government, upon proper application
therefor under such regulations as may be prescribed by the
Secretary.
SEC. 10. (a) Every person liable to any tax imposed by this Act
shall keep such books and records, render under oath such statements, make such returns, and comply with such rules and regulations as the Secretary may from time to time prescribe.
(b) Any person who shall be registered under the provisions of
section 2 in any internal-revenue district shall, whenever required so
to do by the collector of the district, render to the collector a true
and correct statement or return, verified by affidavits, setting forth
the quantity of marihuana received or harvested by him during such
period immediately preceding the demand of the collector, not exceeding three months, as the said collector may fix and determine. If such person is not solely a producer, he shall set forth in such statement or return the names of the persons from whom said marihuana was received, the quantity in each instance received from such persons, and the date when received.
SEC. 11. The order forms and copies thereof and the prescriptions
and records required to be preserved under the provisions of section
Narcotic Drug Act. 38 Stat. 785.
26 U. S. C. §§ 1040- 1061. 1383-1391.
Transferee required
to pay transfer tax failing to pay, etc.
Proof of I)ossession.
No liability on en- forcement officer.
Forfeiture of contra- band marihuana.
Confiscation of seizures.
I )lsrllltilon. et.’
Records. returns, etc.
Statements by reistered persons.
Orler forms, pre- scription., etc.; inspection
555
75TH CONGRESS, 1ST SESSION-CH. 553-AUGUST 2, 1937
6, and the statements or returns filed in the office of the collector of the district under the provisions of section 10 (b) shall be open to inspection by officers, agents, and employees of the Treasury Department duly authorized for that purpose, and such officers of any State, or Territory, or of any political subdivision thereof, or the District of Columbia, or of any insular possession of the United States as shall be charged with the enforcement of any law or municipal ordinance regulating the production, sale, prescribing, dispens- (opiesof returns. ing, dealing in, or distributing of marihuana. Each collector shall
be authorized to furnish, upon written request, copies of any of the said statements or returns filed in his office to any of such officials of any State or Territory, or political subdivision thereof, or the District of Columbia, or any insular possession of the United States as shall be entitled to inspect the said statements or returns filed in the office of the said collector, upon the payment of a fee of $1 for each 100 words or fraction thereof in the copy or copies so requested.
Penalty provisions. SEC. 12. Any person lwho is convicted of a violation of any provision of this Act shall be fined not more than $2,000 or imprisoned not more than five years, or both, in the discretion of the court. tioNegincetXnemN SEC. 13. It shall not be necessary to negative any exemptions set etc. forth in this Act in any complaint, information, indictment, or other writ or proceeding laid or brought under this Act and the burden of proof of any such exemption shall be upon the defendant. In the absence of the production of evidence by the defendant that he has complied with the provisions of section 2 relating to registration or that he has complied with the provisions of section 6 relating to order forms, he shall be presumed not to have complied with such provisions of such sections, as the case may be. ile to be pre- SEC. 14. The Secretary is authorized to make, prescribe, and pubPoe, p. 772. lish all necessary rules and regulations for carrying out the provisions of this Act and to confer or impose any of the rights, privileges, powers, and duties conferred or imposed upon him by this
Act upon such officers or employees of the Treasury Department as lie shall designate or appoint.
Scope of Act. SEC. 15. Thle provisions of this Act shall apply to the several States, the District of Columbia, the Territory of Alaska, the Territory of Hawaii, and the insular possessions of the United States, except the Philippine Islands. In Puerto Rico the admninistration of this Act, the collection of the special taxes and transfer taxes, and the issuance of the order forms provided for in section 6 shall be performed by the appropriate internal-revenue officers of that government, and all revenues collected under this Act in Puerto Rico Vircin Islands. shall accrue intact to the general government thereof. The President is hereby authorized and directed to issue such Executive orders as will carry into effect in the Virgin Islands the intent and purpose of this Act by providing for tte registration with appropriate officers and the imposition of the special and transfer taxes upon all persons in the Virgin Islands who import, manufacture, produce, compound, sell, deal in, dispense, prescribe, administer, or give away marihuana. ling clause. SEC. 16. If any )rovision of this Act or the application thereof to any person or circumstances is held invalid, the remainder of the Act and the application of such provision to other persons or circumstances shall not be affected thereby.
Efective date SEC. 17. This Act shall take effect on the first day of the second
month after the month during which it is enacted. Short title. SEC. 18. This Act may be cited as the “Marihuana Tax Act of 1937.”

Approved, August 2, 1937.

1https://www.history.com/news/mexico-border-wall-military-facts
2https://blogs.loc.gov/kluge/2015/03/the-history-of-mexican-immigration-to-the-u-s-in-the-early-20th-century/
3https://time.com/5572691/420-marijuana-mexican-immigration/
4https://drugabuse.com/marijuana-vs-alcohol/
Musto DF. The Marihuana Tax Act of 1937. Arch Gen Psychiatry. 1972;26(2):101–108. doi:10.1001/archpsyc.1972.01750200005002 https://jamanetwork.com/journals/jamapsychiatry/article-abstract/490581
https://www.mit.edu/~thistle/v13/2/history.html

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