Hemp was made illegal in 1937 via the Marihuana Tax Act, which lumped hemp together with marijuana despite its non-intoxicating nature. The law was driven by a mix of anti-cannabis propaganda, racial politics, and competing industrial interests. Hemp remained banned until the 2018 Farm Bill legalized it federally.
Hemp was effectively banned in the United States by the Marihuana Tax Act of 1937, which placed prohibitive taxes and registration requirements on anyone dealing with cannabis, including industrial hemp. The 1970 Controlled Substances Act made the ban absolute by classifying all cannabis as Schedule I, regardless of THC content. Hemp stayed federally illegal for the next 81 years.
The Marihuana Tax Act didn't outlaw hemp outright. Instead, it required anyone growing, selling, or using cannabis to register with the federal government, pay an annual occupational tax, and obtain a transfer tax stamp for each transaction.
The administrative burden and legal risk killed the industry within a few years. By the early 1940s, the only significant US hemp production happened under the wartime Hemp for Victory program, and even that ended in 1946.
The law was championed by Harry Anslinger, the first commissioner of the Federal Bureau of Narcotics.
Anslinger spent the 1930s building a national panic about marihuana, a Spanish-derived term he popularized specifically to associate cannabis with Mexican immigrants.
His campaign produced the famous Reefer Madness propaganda and a stream of congressional testimony linking cannabis to violence, insanity, and racial mixing.
Hemp and marijuana are both Cannabis sativa. To a botanist they're varieties of the same species; to a 1937 Congress, they were indistinguishable.
The Marihuana Tax Act applied to all marihuana, which the law defined to include the entire cannabis plant. Industrial hemp farmers protested. The American Medical Association formally opposed the bill. They were ignored.
Three forces are typically cited for why hemp got banned alongside marijuana:
The Marihuana Tax Act was struck down by the Supreme Court in 1969 (Leary v. United States) on Fifth Amendment grounds.
Congress responded the following year with the Controlled Substances Act, which placed cannabis on Schedule I, the most restrictive category, alongside heroin and LSD.
Schedule I drugs are defined as having no currently accepted medical use and high potential for abuse. Hemp, a non-intoxicating crop with millennia of agricultural history, was treated identically to street heroin under federal law for the next 48 years.
Hemp's path to legalization came through farm policy, not drug policy.
The 2014 Farm Bill (Agricultural Act of 2014, Section 7606) created limited industrial hemp pilot programs run through state agriculture departments and universities.
The 2018 Farm Bill (Agricultural Improvement Act of 2018) went further: it removed hemp, defined as Cannabis sativa containing 0.3% or less THC by dry weight, from the Controlled Substances Act entirely. Hemp returned to legal commodity status for the first time since 1937.
The 1937 to 2018 ban left American hemp farming roughly 80 years behind countries like China, France, and Canada that never banned it.
US hemp infrastructure (decortication facilities, fiber processing, established seed genetics) is still being rebuilt.
Many state laws, banking restrictions, and crop insurance programs lag behind the federal change.
And the cultural conflation of hemp with marijuana, deliberately engineered by Anslinger's 1930s campaign, still confuses consumers and lawmakers today.
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