A cannabis plant at sunset

The History of Legal Weed: What Cannabis Business Owners Need to Know

In today’s ever-evolving world of cannabis, staying well-informed on the legal landscape becomes increasingly vital for entrepreneurs looking to make their mark on the industry.

But keeping up with the current laws is only part of the equation. To truly grasp the industry’s complexities and position their businesses for success, cannabis entrepreneurs must understand the history of prohibition and legislation.

Unraveling the past provides valuable context for the current regulations, societal attitudes, and market trends, which enables business owners to anticipate changes, protect themselves legally, and make informed decisions for the future.

If you’re a cannabis industry professional, or anyone interested in the industry, brace yourself for a heady dose of cannabis education below.

You’ll learn about the plant’s ancient beginnings, the history of its criminalization, and the important legislation still affecting cannabis business today.

Trigger Warning:
The following content may be infuriating, and lead to increased levels of social justice activism.

Early Cannabis History

Cannabis has been used around the world for thousands of years. The ancient plant has an arsenal of documented uses throughout history. It was used medicinally in China as far back as the Silk Road, and widely used for industrial purposes across Europe and Asia.

During her reign in the 1500s, Queen Elizabeth ordered landowners with 60 acres or more to grow hemp or face a fine. The Virgin Queen also used cannabis to help soothe her menstrual cramps.

Early colonial settlers were also ordered to grow hemp by the British Crown, in order to meet demand for maritime rope. A staple commodity throughout Europe and the American colonies, it was widely used for paper, textiles, building materials, and more. 

Until prohibition, cannabis was commonly found in the medicine chest of most American homes. It was used to remedy a host of ailments — until federal legislation made the cultivation, sale, transport, and possession of cannabis illegal in 1937.

The First Cannabis Law

In 1619, the first-ever legislative assembly of the American colonies (known as the Virginia Assembly) passed the first cannabis legislation, requiring that all households in the union grow hemp.

By the time America was founded in 1776, cannabis was widely known and used throughout the colonies. Benjamin Franklin wrote about medicinal and industrial uses of hemp as early as the 1720s in his publication, The Pennsylvania Gazette (which was printed on hemp paper).

Our Founding Fathers grew hemp, including George Washington and Thomas Jefferson, to make canvas, fishing nets, sewing thread, and more. Clothing for soldiers in the Revolutionary War were made from homespun hemp.

By the mid 1800’s, the plant was regularly cited in the United States Pharmacopoeia, and had gained popularity for a wide range of medicinal uses. Merck, Bristol-Meyers, and other major pharmaceutical companies of today had cannabis products on the market.

Then, at the turn of the century, the federal government made its first moves to regulate cannabis, despite the low prevalence of its recreational use.

The Pure Food and Drug Act of 1906

Primarily a “truth in labeling” act, the Pure Food and Drug Act was passed in 1906, requiring drug manufacturers to list any substances considered to be addictive or dangerous on product labels. Cannabis was on this list, along with substances like alcohol, morphine, cocaine, opium, and heroin.

Signed into law by President Theodore Roosevelt, Jr., the bill led to the establishment of the Food and Drug Administration (FDA), which defined and enforces US safety standards for food and drugs to this day.

But despite the new restrictions, the medicinal use of cannabis continued to grow in popularity throughout the states in the early 20th century.

The Propaganda Movement

As prohibitionists gained momentum in Washington, the states began to follow suit. Nine states had banned the use of cannabis by 1920, including Massachusetts, Maine, Vermont, Colorado, and Nevada. And by 1931, it was outlawed in 29 states.

In 1930, the Federal Bureau of Narcotics was formed to centralize the government’s anti-drug control efforts. Led by Harry J. Anslinger, the agency claimed marijuana caused insanity and drove people to abhorrent criminal acts.

By the mid-1930s, anti-drug activists had launched full-scale disinformation campaigns against cannabis and other drugs, which fueled racial biases and prejudices in discussions surrounding drug use.

They began referring to the plant by its Mexican colloquialism, “marijuana,” for the specific purpose of infusing cannabis with racism and social stigma.

Reefer Madness

Reefer Madness, the 1936 propaganda film, portrayed cannabis users as violent criminals prone to “drug-crazed abandon” and other antisocial behaviors. It aimed to discourage the public from using the plant by portraying it as a dangerous substance that leads to insanity, violence, and moral degradation.

While perhaps not explicitly racist, the film contributed to broader anti-drug campaigns that disproportionately targeted minority communities, particularly African Americans and Mexican Americans.

The film has since become a cult classic, due to its unintentional comedic value and the stark contrast between its exaggerated claims and reality. However, at the time of release, the film’s planned damage was done.

The Marijuana Tax Act of 1937

President Franklin Franklin D. Roosevelt signed the Marijuana Tax Act in 1937, which effectively discouraged and restricted the legal production and distribution of cannabis, and laid the foundation for explicit criminalization later on.

The sweeping legislation established high taxes and strict regulations for producers, manufacturers, importers, retailers, physicians, lab researchers, and anyone else involved in the cultivation or sale of cannabis.

Medicinal use of cannabis was still permitted, however, doctors who prescribed it were required to register with the federal government and pay an annual tax. The extra headaches led many doctors to look for more convenient options, such as aspirin and morphine — two drugs coming to popularity at the time.

This created significant barriers for scientific research on cannabis, limiting our understanding of its medical potential, appropriate dosages, and safety profiles to this day.

Finally, in 1942, cannabis was removed from the U.S. Pharmacopeia, which ended its legal use as a medicine.

The Boggs Act of 1951

After the war, there was a renewed focus on anti-drug legislation. The Boggs Act of 1951 was established to combat drug abuse and trafficking, primarily of narcotics such as heroin and cocaine.

Unfortunately, penalties for cannabis offenses were increased exponentially under the act, which aligned cannabis with the stricter sentencing guidelines of heavy narcotics.

Mandatory minimum sentences of two to five years were established for all drug charges — including first-time offenders on simple cannabis possession charges, and up to 20 years for subsequent offenses.

The 1956 Narcotics Control Act further increased sentencing minimums to up to 10 years, with fines up to $20,000.

Early Advocacy 

By the late 1960’s, several prominent civilian-led advocacy groups had emerged in support of legislative reform for cannabis. 

These groups and individuals recognized the negative impact the Marijuana Tax Act had on access to cannabis for medical purposes, the economic implications, and the broader social stigma associated with its use.

  • LeMar (short for “Legalize Marijuana”) was founded in 1964 as the country’s first legalization advocacy group. Allen Ginsberg, famed counterculture icon and beatnik poet, helped establish LeMar’s east coast chapter in NYC.
  • NORML (National Organization for the Reform of Marijuana Laws) has garnered the widest name recognition. It was founded out of Washington, D.C. in 1970 as a nonprofit public-interest advocacy group.
  • Amorphia was established in 1971, selling hemp rolling papers to finance its legalization efforts.

Cannabis legislation reform scored a brief win in 1969, when the Marijuana Tax Act was overturned as part of Leary v. United States. The Supreme Court ruled the 1937 Act was unconstitutional and violated the Fifth Amendment. 

Unfortunately, this victory was short-lived.

The Controlled Substances Act of 1970

Nixon responded to the Supreme Court ruling by passing the Comprehensive Drug Abuse Prevention and Control Act of 1970. Also known as the Controlled Substances Act (CSA), this legislature has been devastating to the cannabis industry.

The CSA prohibits the cultivation, use, and sale of cannabis for commercial or personal use. It classified drugs into various schedules based on their perceived medical value and potential for abuse.

As defined by law, cannabis meets the following criteria for Schedule 1 classification:

  1. The drug has high potential for abuse
  2. The drug has no accepted medical use for treatment in the United States
  3. There is lack of accepted safety for use of the drug under medical supervision

Not only was this based on propaganda and misinformation, the law made it nearly impossible for scientists to study the plant and its potential benefits, let alone come to consensus on accepted medical uses or agree on standards of treatment.

To this day, all clinical trials involving cannabis must be approved by both the FDA and the Drug Enforcement Administration (DEA).

Congress to Nixon: Decriminalize!

At the direction of Congress in 1972, Nixon appointed a commission to study and report on the effects of cannabis use. 

The 13-person bipartisan group known as the Schafer Commission conducted more than 50 studies across the United States, and found that personal use of cannabis should be decriminalized. They favored an approach based on education and prevention over harsh prohibitionist penalties.

However, despite their findings, Nixon declined their recommendation and launched the War on Drugs, declaring, “America’s public enemy number one… is drug abuse.” 

“A blatant disregard for the voice of the people, and an insult to personal freedom!”

~Every cannabis advocate in the 1970s~

The War on Drugs

Critics of Nixon’s War on Drugs condemned the approach as overly punitive, citing its overemphasis on law enforcement and criminalization — rather than treating drug addiction as a public health concern, and working to resolve the underlying social and economic issues.

Others argued the resources dedicated to law enforcement and drug interdiction could have been better utilized for drug prevention, education, and treatment programs.

Activists slammed the policies for disproportionately targeting marginalized communities, and perpetuating racial disparities in the criminal justice system, resulting in mass incarceration.

Progress in the States

Despite the dramatic increase in federal drug enforcement, interest in the medicinal benefits of cannabis continued to grow. Since then, we’ve seen a slow tide of change, with state after state choosing to buck federal mandates and decriminalize.

  • Oregon became the first US state to decriminalize cannabis in 1973, with a handful of other states passing similar legislation in the 1970s. 
  • In 1978, New Mexico passed the Controlled Substances Therapeutic Research Act, allowing cancer and glaucoma patients access to cannabis through research programs. 
  • Virginia followed in 1979, with similar legislation allowing doctors to recommend cannabis to patients with glaucoma and recovering from chemotherapy.
  • California passed Prop 215 in 1996, making it the first state to legalize the sale and medical use of cannabis for patients with AIDs, cancer, and other serious ailments. 
  • Also in 1996, Arizona passed Prop 200, which gave doctors the ability to prescribe or recommend Schedule I drugs for certain illnesses, while requiring probation instead of jail time for nonviolent offenders. 
  • In 2012, Washington and Colorado became the first states to legalize adult recreational use, after passing landmark ballot initiatives.

The Farm Bills

When Barack Obama passed the Agricultural Act in 2014, he established the Hemp Research Pilot Program. Also known as the 2014 Farm Bill, it relaxed federal restrictions on the cultivation of hemp for research purposes. 

However, the program was reserved for state departments of agriculture and institutions of higher education only. State laws and regulations still applied, and it did not federally legalize hemp, nor allow for interstate commerce.

DJT passed the Agriculture Improvement Act in 2018 (also called the 2018 Farm Bill), which expanded provisions in the 2014 bill, and established the Domestic Hemp Production Program. 

This made hemp cultivation technically legal –IF and only IF cultivated in accordance with the 2018 Farm Bill. It defined hemp as a type of cannabis plant with 0.3% of Delta-9 THC or less, and removed it from the statutory definition of marijuana in the Controlled Substances Act.

Corruption or Capitalism?

So, they established research programs to “study” hemp, which they defined as having no medicinal value (i.e. delta-9 THC content of 0.3% or less), and then they legalized hemp for industrial agriculture to “research” because CAPITALISM.

Correct. And the cannabis plants with the actually life-changing medicine (which President Nixon was advised to decriminalize in the ’70s) are still illegal.

And it gets worse…

Big Agriculture

The industrial farming industry has obviously been thrilled with the profit potential and brand new sources of revenue these rulings bring. Hemp, having no medicinal value, is very cheap to mass-produce in low-quality conditions.

Unfortunately, with federal runway for research and no FDA regulations, Big Agriculture has found plenty of questionable ways to be innovative.

That 0.3% of THC from those low-quality crops with no medicinal value, for example, is now being extracted, concentrated, and sold as “CBD” to unsuspecting victims who just want to feel better.

“Where’s the public safety concern now?”

~Literally anyone paying attention to all of this~

These are wildly dangerous practices! Without health regulations, marketers can position CBD as a natural cure for all types of health concerns. People think they’re taking CBD, in hopes that it helps with their symptoms, and they end up ingesting terrifying concoctions containing little more than pesticides and chemicals those industrialized crops were grown with.

Of course, these toxic innovations will leave users feeling unimproved at best, with potentially more distressing symptoms than they began with.

Victims of this shameful exploitation may conclude, based on the actual fraud that’s currently being funded by our government, that CBD is not only ineffective but actually harmful to their health. They may swear off cannabis completely, warn their friends and neighbors about its dangers, and share their experience online — where misinformation spreads like wildfire, and most things are taken completely out-of-context.

Add these to the long list of reasons why cannabis education and advocacy is so important!

Paths to Legalization

While cannabis remains federally illegal, potential paths to full legalization do exist. And with industry projections expected to top over $60 billion by 2030, the future of cannabis is looking bright. 

As of today, it’s fully legal in Canada, legal for medical use in 40 US states, and for recreational use in 20 states (plus DC, with more states to follow). 

Several long-awaited bills were recently introduced to Congress, including cannabis banking bills to improve access to funding, and an attempt to address IRC Section 280E — the punitive federal tax law still decimating the bottom line of cannabis businesses across the United States.

These are small but encouraging signs. However, until cannabis is removed from Schedule I classification, any legislative steps forward leave much to be desired.

Cannabis Today

In the meantime, doing business in the cannabis industry has plenty of other challenges.

Interstate commerce is still illegal under federal law, so e-commerce as we typically think of it, isn’t possible (it’s complicated). Lack of access to banking and shipping services mean that, while cannabis retailers are technically licensed to “sell” online, they can’t accept digital payments or ship products.

This forces the cannabis market to remain primarily a local game, which has its own set of issues — including smaller market areas, and more competition for the same customers, who become more expensive to acquire over time.

Each state has its own constantly-changing laws and regulations around cannabis, including heavy restrictions around marketing and advertising. Laws can also vary by locality within state lines (i.e. laws within cities vs. laws in rural outskirts).

Business owners must keep up with the laws to ensure they remain compliant, and constantly monitor for market trends, breakthroughs, and competitive insights to stay competitive, and keep their books above water.

Let Us Help

As the industry evolves, and technology changes the game on what seems like a daily basis, successful digital marketing grows consequentially more important to the livelihood of any cannabis business.

If you’re a cannabis industry professional, we can help you navigate these challenges and develop a successful marketing strategy to expand your online presence, reach your target audience safely, and bring customers through your doors.

Stay tuned for more cannabis industry news and educational content on The Potent Truth! Or book your free 20-minute consultation call today. Questions? Drop us a line.

The Potent Truth is that cannabis is medicine. We aim to empower as many humans as possible with this knowledge, and to provide the support they need to grow, thrive, and change their lives in ways they hadn’t imagined possible.

~The Potent Truth~