Chapter 2
The Feds, the DEA, and the War on Drugs

"Drugs are bad."

- Mr. Mackey, South Park Elementary

The legalization of cannabis may present an amazing investment opportunity. But wait. Why is cannabis illegal in the first place? Most people just assume that marijuana or cannabis has always been illegal. It's a drug. Drugs are bad. But it's not as simple as that. Marijuana's criminalization is a convoluted story full of money, politics, racism - and conspiracy theories.

Federal level marijuana prohibition began just a few short years after alcohol prohibition was repealed. The Marihuana Tax Act of 1937 used an excise tax on all sales of hemp to effectively make possession or sale of marihuana illegal throughout the United States. (Notice that it was spelled with an "h"). Government sentiment against narcotic and other drug use began in the late 1800s and gained steam through the early 1900s.

Before it was made illegal, cannabis had been used in the Americas for hundreds of years. Land-owning American colonists of Jamestown, Virginia were expected to grow and export hemp plants to support their benefactors in England. George Washington grew hemp at Mount Vernon as one of his primary crops. Thomas Jefferson also grew hemp, as did many farmers of the day. Hemp was used as rope, fabric, and even a fuel source. In 1799, Napoleon brought other strains of cannabis from Egypt to France, and Europe began to learn of the medicinal qualities of cannabis. By the 1840s and 1850s, cannabis extracts and tinctures were going mainstream in American and European pharmacies as a treatment for countless maladies. Separately, smoking hash was thought of as a fashionable and exotic habit among middle- and upper-class society. Hundreds of hashish parlors emerged in New York and other east coast cities. But the word marijuana or "marihuana" was little known to most Americans.

Which brings us to the supposed conspiracy to exterminate the hemp and cannabis business leading up to the Marihuana Tax Act of 1937. Our characters are newspaperman William Randolph Hearst, the Du Pont family and their DuPont chemical company, Andrew Mellon and Mellon Bank, and Mellon's relative by marriage, Harry Anslinger.

Hearst was the most powerful media mogul of the time. His vast array of newspapers and magazines were the most read nationwide. As a newspaper man, he was supposedly heavily invested in the timber industry for the development of paper products. Dupont was the maker of synthetic materials and had just invested nylon in 1927. Nylon could revolutionize the textile industry and begin to replace the use of natural fibers. Andrew Mellon was the nation's richest man when he was appointed Secretary of the Treasury in 1921. Mellon Bank was one of the most powerful financial institutions in the world, and Mellon Bank was also the financial backer for DuPont.

In 1930, as Secretary of the Treasury under his third president, Andrew Mellon was in position to appoint the founding commissioner to the Treasury's new Federal Bureau of Narcotics (FBN). He appointed Harry J. Anslinger. Mellon was uncle to Anslinger's wife. Remember that the Treasury Department was also the main enforcer for Prohibition. With the loss of alcohol prohibition as one of the Treasury's main functions just a couple years later, it's thought that Mellon and Anslinger needed a new illegal substance to focus efforts and budgets on. That new focus was squarely on marijuana. Anslinger needed to justify his bureau's very existence. The Commissioner of the FBN became a very aggressive and outspoken critic of marijuana usage.

With Harry Anslinger fighting a war on drugs (before that term existed), others ostensibly joined in to demonize marijuana use. The rich newspaper baron Hearst used his influential portfolio of newspapers and magazines to sway public opinion on the evils of the mind-altering marijuana plant. Advertisements and articles pointed to the rise of crime, violence, and purported "sexual deviance" with marijuana use. Rhetoric from Anslinger, Hearst and other anti-drug propagandists primarily targeted non-white and lower-class communities. Extreme racism and class warfare ran rampant.

There's conflicting information about where the term marijuana even originated. US immigration from Mexico surged between 1910 and 1920 with individuals wanting to escape the violence of the Mexican Revolution. It's believed that Mexican immigrants in the southwest brought casual smoking of the marijuana plant along with them. We don't know if the word was spelled "marihuana" in government documents purposefully or by accident. We do believe that those looking to undermine marijuana chose a word that was foreign to most Americans and as a way to connect it to immigrants and minorities while dissociating it from socially acceptable hemp or medical cannabis.

While Hearst and Anslinger campaigned against marijuana on what they claimed were moral grounds, other conspirators possessed financial interests. The US tobacco industry was booming. Marijuana leaf could be a competitor. DuPont's nylon and other new synthetics could excel with hemp out of the picture. It's also alleged that Randolph Hearst and the timber industry feared the potential growth of hemp-based paper products.

It was Federal Bureau of Narcotics commissioner Harry Anslinger who drafted and lobbied for enactment of the Marihuana Tax Act of 1937.

While this all makes for a good conspiracy theory that's been circulated by cannabis proponents, it is just that - a conspiracy theory. In the early twentieth century hemp was a rather insignificant crop. While clothing can be made from hemp fibers, cotton had already proven itself to be much more practical and the cotton gin had revolutionized that industry many years prior. Just as hemp wasn't a cotton competitor, it was not a real competitor to DuPont's new synthetic nylon. Hemp can also be used to produce high-quality paper, but by 1937, hemp planting had managed to grow to only 14,000 total acres in the United States. Compared to hundreds of millions of acres of timber and about 10 million acres of cotton, hemp's share of the market was totally insignificant.

On the other hand, racism, fear, and anti-drug zealotism were the real reasons behind marijuana's criminalization. Its outlaw was pursued by many of the same extremists behind Prohibition. It also gave Andrew Mellon's Treasury Department and Harry Anslinger's Federal Bureau of Narcotics something to do.

City and state laws had been passed making cannabis illegal decades before our Marihuana Tax Act of 1937. California had banned non-prescription cannabis in 1913. New York City did in 1914. Through the remainder of the decade and into the 1920s, other states and municipalities quickly followed suit. Unfortunately, it's said that enforcement of these new laws was targeted almost entirely against Mexican and black communities. By the end of 1936, all 48 states had formed laws to ban or regulate marijuana on some level.

While illegal marijuana use was being policed, its minor use as a medicine was also in decline. The development of aspirin, morphine, and other modern drugs replaced marijuana in the treatment of pain and other medical conditions. The new federal marijuana law was structured in a fashion like several other Acts of the time - attacking the issue financially. The Marihuana Tax Act of 1937 maintained the right to use marijuana for medicinal purposes but required pharmacists and physicians who prescribed the drug to register with federal authorities and pay an annual tax. The 1937 Act simply made legal marijuana use prohibitively expensive. Prescriptions of marijuana dramatically declined as doctors generally chose to avoid the unnecessary hassles and costs.

The Marihuana Tax Act of 1937 was ruled unconstitutional by the United States Supreme Court in 1969 and overturned. You can thank famous psychedelic drug advocate and Harvard psychologist Timothy Leary for that. As Leary faced a 30-year prison sentence for marijuana possession, he hired a powerful team of lawyers to defend him. His attorneys argued that the Tax Act violated his Fifth Amendment rights because he had to tell federal authorities he possessed pot so they could tax it. The Supreme Court agreed.

The federal government followed up with the Controlled Substance Act (CSA) in 1970, which established the modern prohibition against marijuana. Marijuana was lumped in as a "Schedule I" drug along with the other drugs purported to be the most dangerous, like heroin and LSD.

According to the United States Drug Enforcement Agency website, drugs are classified into five distinct categories (or schedules) depending on the drug's acceptable medical use and the drug's abuse or dependency potential. Schedule I drugs have a high potential for abuse and the potential to create severe psychological and/or physical dependence. Schedule I drugs, substances, or chemicals are also defined as drugs with no currently accepted medical use. As the CSA was written, Schedule V drugs represented the least potential for abuse. This 1970 Schedule I listing of marijuana in the CSA and enforced by the DEA would hamper the cannabis industry for decades to come. By comparison, even cocaine and methamphetamine are listed as Schedule II drugs in the CSA Schedule. Still dangerous and with a high potential for abuse, but theoretically lesser than that of marijuana. Ridiculous.

It's been said that Nixon himself wanted marijuana...