The hemp industry in the U.S. was demolished. Farmers who had already suffered through the Great Depression then lost the potential of making money from hemp, which is a perfect rotation crop that easily grows in every state in the U.S.
Over the following months farmers and hemp companies in the Midwest were soon found by the Federal Bureau of Narcotics to be in violation of the Marijuana Tax Act. The tax burden worked. Investors in hemp farming and processing were discouraged and most dropped out. Banks failed to back the companies. Most farmers stopped planting hemp. The Federal Bureau of Narcotics made it difficult for farmers and hemp companies to transfer ownership of the hemp they had already grown.
The hemp farmers and business people who still worked to continue the hemp industry under the new laws were in a constant battle with the Federal Bureau of Narcotics to comply with the new standards and taxes. Federal Bureau of Narcotics officers often made trips to farms to investigate the farming practices. This could be described as harassment. Interestingly, hemp farms and hemp businesses in Wisconsin that had contracts to supply hemp products to the U.S. government for military uses, especially for the Navy, were not kept under the watchful eyes of field supervisors of the Federal Bureau of Narcotics.
Some hemp companies in Minnesota threatened to sue the government to compensate the companies for their business losses. In Anslinger’s flippant response to this situation during the summer of 1938 he wrote, “This hemp may be sold under the provisions of the Marijuana Tax Act provided that it is substantially free of flowering tops and leaves without respect to the transfer of the act. Accordingly, the passage of the Marihuana Tax Act of 1937 did not destroy the market for hemp.”
“Tell Mr. Anslinger that he can go to the region below and let him present the country with a spectacle of arresting half a thousand farmers in Minnesota for selling an agricultural crop grown off from their farms which were grown long before Congress ever thought of the Marihuana Act.”
– Ojai A. Lende, in a letter to Minnesota Senator Henrik Shipstead, March 31, 1939. Lende was an attorney representing farmers that were trying to deal with this new law that was destroying their businesses.
The year after the U.S. passed the Marihuana Tax Act, Canada also outlawed hemp farming and did so using lies about marijuana. Canadians also lost their source for medicinal cannabis because they relied on cannabis farms located in South Carolina to supply them with the medical grade product.
In the early 1940s, apparently under the pressure of Anslinger, cannabis was taken out of the U.S. pharmacopoeia. Most doctors had already stopped prescribing it because the Tax Act had made it too expensive and problematic. Pharmaceutical companies could then sell more medicine because a most common medicine, marijuana, was essentially taken off the market.
Which companies suddenly became a lot more valuable when hemp became too costly to grow? The International Paper Company; the St. Regis Paper Company; the Du Pont Chemical Company that produced the chemicals used by the tree paper companies; the oil companies; and the one owned by William Randolph Hearst. Although he died on August 27, 1937, Andrew Mellon’s companies, and his heirs and business associates, didn’t make out so badly in the deal, either.
Some members of Congress also just so happened to benefit financially by voting the way Hearst, Du Pont, Mellon, and Anslinger wanted them to vote. Many members of Congress put their fortunes in cotton, petroleum, lumber, paper, and other ventures that benefited from the elimination of hemp farming.
With unfounded claims such as, “Marihuana is an addictive drug which produces in its users insanity, criminality, and death,” and “Marihuana leads to pacifism and community brainwashing,” Anslinger used outrageous lies to advocate and strengthen the laws, and distorted any reasoning in his favor to get funding for his department. His decades-long career was set, but he could always be aided by keeping his so-called important job in the news. One was to go after the high-profile people.
Anslinger’s Federal Bureau of Narcotics received more funding to deal with the control of marijuana, but placed more pressure on states and local governments to enforce the marijuana laws while the Federal Bureau of Narcotics focused on other drug crimes.
When 58-year-old Samuel Caldwell of Denver was the first to be arrested for breaking the Marijuana Tax Act law, Anslinger traveled to be present at the court hearing on October 8, 1937. Caldwell was accused of selling marijuana to a 26-year-old named Moses Baca. The judge, J. Foster Symes, fined Caldwell $1,000 and sentenced him to four years labor. Baca was sentenced to 18 months. They both served their time in the U.S. penitentiary located in Leavenworth, Kansas.
“About 1935, we were stunned with the rapid wildfire spread of this drug, and by the following year it had become such a major menace as to call for the enactment of national control legislation. Nearly every state had suffered from the insidious invasion of this drug. It spread to new circles not previously contaminated by drug addiction – to young, impressionable people.”
– Harry Anslinger, speaking before a meeting with the New York Herald Tribune, 1938