Until 1937, consumption and sale of cannabis was legal in most American states. In some areas it could be openly purchased in bulk from grocers or in cigarette form at newsstands, though an increasing number of states had begun to outlaw it. In that year, federal law made possession or transfer of cannabis (without the purchase of a by-then-incriminating tax stamp) illegal throughout the United States. This was contrary to the advice of the American Medical Association at the time. Legal opinions of the time held that the federal government could not outlaw it entirely. The tax was $100 per pound of hemp, even for clothes or rope. The expense, extremely high for that time, was such that people stopped openly buying and making it.
The decision of the U.S. Congress was based in part on testimony derived from articles in the newspapers owned by William Randolph Hearst, who was heavily interested in DuPont Inc. Some analysts theorize DuPont wanted to boost declining post-war textile sales, and wished to eliminate hemp fiber as competition. Many argue that this seems unlikely given DuPont's lack of concern with the legal status of cotton, wool, and linen; although it should be noted that hemp's textile potential had not yet been largely exploited, while textile factories already had made large investments in equipment to handle cotton, wool, and linen. Others argue that DuPont wanted to eliminate cannabis because its high natural cellulose content made it a viable alternative to the company's developing innovation: modern plastic. Still, others could argue that hemp could never truly compete with the high strength and elasticity of synthetics, such as nylon. Furthermore, hemp would have been an easy target due to its intoxicating effect, while no rational justification could have been made for outlawing cotton, wool, or linen.
During this period, Henry (Harry) Anslinger, then-Commissioner of the Federal Bureau of Narcotics, alleged that the drug could provoke criminal behavior in previously solid citizens. Anslinger, originally against a federal law, switched his position in response to pressure from Southern and Western states seeking to outlaw the substance in connection with immigrant populations. With the aid of Hearst and other media, the Bureau of Narcotics demonized the subject in pop culture. Anslinger was a prohibitionist and believed anti-marijuana laws would help encourage a revival of alcohol's prohibition. Anslinger also popularized the word marihuana for the plant, using a Mexican derived word (believed to be derived from an archaic Brazilian Portuguese term for inebriation, "Maria Joana") in order to associate the plant with increasing numbers of Mexican immigrants, creating a negative stereotype which persists to this day.
Anslinger was successful in outlawing machine-gun sales with a trick of law that made it impossible to complete a transaction without a stamp issued by the government. Even though the government had no intentions of issuing said stamps, the Supreme Court upheld the restriction on machine gun sales. (Today these stamps are routinely issued however to qualified buyers under the rules set forth in the National Firearms Act.) Congress then applied the same theory to majiuana. Following passage of The 1937 federal marijuana tax act, the mayor of New York City commissioned a study that determined all of Anslinger's claims to be false. Despite the testimony of the American Medical Associations director, Congress passed the bill to curb the percieved violent spread of the drug. In fact, the legal spread of amphetamines by prescription from doctors was at this time clearly a larger problem.
Anslinger's law was struck down by the Supreme Court in 1969. In a case brought by Timothy Leary, the Court held that the law's requirement that a would-be possessor of marijuana register with the local bureau of the IRS, thereby placing his name and address on a file available to local law enforcment, violated the Fifth Amendment privilege against self-incrimination, given the fact that at the time all 50 states had state laws on the books outlawing marijuana outright. In 1970, the Controlled Substances Act made possession of marijuana illegal again on a federal level, without the Fifth Amendment issues that scuttled the 1937 act, and without apparent concern for the issues which required the Eighteenth Amendment to effect the prohibition of alcohol. Several petitions for cannabis rescheduling in the United States have been filed, since the Act permits legalization of marijuana through the executive branch.