Marihuana Tax Act

Last updated: August 13, 2018

What Does Marihuana Tax Act Mean?

The Marihuana Tax Act, sometimes referred to specifically as the Marihuana Tax Act of 1937, was drafted in the United States and signed into law on August 2, 1937 by Harry Anslinger. The signing of the act placed a tax on the sale of cannabis. It came into effect on October 1, 1937.

Prior to the signing of the Marihuana Tax Act, cannabis had been legal and untaxed in the United States. Although the Marihuana Tax Act did not criminalize cannabis precisely, it did enable penalties and prison time for offenders, i.e. those who did not pay the applicable taxes.

Upon the passage of the monumental nationwide law, strict regulations and restrictions became enforceable. The Marihuana Tax Act also imposed taxes on hemp and cannabis growers, physicians prescribing medical marijuana, pharmaceutical companies, and sellers.


Maximum Yield Explains Marihuana Tax Act

The Marihuana Tax Act’s original purpose was to levy taxes on hemp-based products, hemp farmers, cannabis growers, physicians prescribing cannabis, and the pharmaceutical industry who used cannabis in their products. It was hoped that the tax would curb the sale and prescription of cannabis.

The Act also quickly became the favorite way to persecute anyone found selling, using, or carrying cannabis who had not paid the required taxes or met the requirements set forth in the Act.

It didn't take long for the Marihuana Tax Act to be used to prosecute offenders. The first marijuana convictions in the U.S. were of Moses Baca for possession and Samuel Caldwell for dealing. Baca was sentenced to 18 months and Caldwell was sentenced to four years in Leavenworth Penitentiary for violating the Marihuana Tax Act in 1937 not long after it was enacted.

Many considered this Act to be the very start of the drug war on marijuana in America.

The 1937 Marihuana Tax Act was repealed by the federal 1970 Controlled Substances Act, which is still enforced today.


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