Executive Summary

The history of hemp in the United States reflects a series of distinct legal and economic phases rather than a single continuous policy.Hemp began as an agricultural fiber crop in the colonial period, expanded during early industrial development, declined in the late 1800s, and became subject to federal regulation under the Marihuana Tax Act of 1937. During World War II, hemp production temporarily increased under federal promotion. The Controlled Substances Act of 1970 later classified cannabis broadly, placing hemp under the same regulatory framework. Limited reintroduction occurred through research programs authorized by the 2014 Farm Bill, followed by full federal legalization of hemp as an agricultural commodity under the 2018 Farm Bill. Today, hemp operates under a structured regulatory system involving federal and state oversight.

Colonial and Early American Hemp

Hemp was cultivated in early American colonies primarily as a fiber crop used for rope, sailcloth, and textiles. Its value was tied to maritime and agricultural needs rather than chemical or medicinal uses.

In regions such as Virginia during the early 1600s, hemp production was encouraged as part of broader agricultural development. References from this period indicate that colonial authorities promoted hemp cultivation due to its economic utility, particularly for naval supplies.

Hemp functioned as a practical raw material within a developing agrarian economy and was integrated into early domestic production systems.

1800s Expansion and Decline

During the 19th century, hemp production expanded alongside industrial growth, particularly in regions suited for large-scale agriculture. Demand for durable natural fibers supported its role in rope-making, textiles, and other industrial applications.

However, hemp production declined toward the late 1800s due to multiple converging factors:

• Increased cotton production in the southern United States
• Growth of imported fibers such as jute
• Industrial changes reducing reliance on traditional rope and sail materials

This decline was gradual and driven by economic competition and shifting industrial needs rather than a single legal change.

What the 1937 Marihuana Tax Act Actually Did

The Marihuana Tax Act of 1937 imposed a federal tax and registration framework on cannabis-related activities, including hemp.

Key elements of the law included:

• Mandatory registration with federal authorities
• Tax requirements on the transfer and production of cannabis
• A broad statutory definition of “marihuana” that encompassed multiple parts of the cannabis plant

While hemp was not explicitly prohibited, the regulatory burden created by the tax and compliance requirements significantly restricted its commercial production. The law effectively altered the economic viability of hemp farming by introducing administrative and financial barriers.For a deeper explanation, see why hemp was made illegal in 1937.

World War II and the “Hemp for Victory” Program

During World War II, the federal government promoted hemp production through the “Hemp for Victory” program.

This initiative included:

• Encouragement of domestic hemp cultivation
• Temporary easing of regulatory constraints
• Increased production to support wartime supply needs, particularly for rope and military materials

The expansion of hemp during this period was directly tied to wartime necessity. After the war ended, production declined again, and the prior regulatory framework resumed.

Hemp Under the Controlled Substances Act (1970)

The Controlled Substances Act (CSA) of 1970 established a federal system for regulating drugs and controlled substances. This period is a key part of the history of hemp in the United States, particularly as federal regulation began to take shape.

Under the CSA:

• Cannabis was classified as a Schedule I substance
• Hemp was included within the broader legal definition of cannabis
• Certain parts of the plant—such as mature stalks, fiber, and sterilized seeds—were excluded

Despite these exemptions, cultivation of hemp remained under federal control, with the Drug Enforcement Administration (DEA) overseeing licensing and enforcement. This framework limited large-scale legal hemp production in the United States for decades. This classification is further explained in our breakdown of cannabis policy and law in the United States.

The Return of Hemp: 2014 Farm Bill

The Agricultural Act of 2014 (2014 Farm Bill) introduced a limited reintroduction of hemp through research-focused provisions.

Key features included:

• Authorization of hemp cultivation for research purposes
• State-run pilot programs through departments of agriculture and universities
• Continued classification of hemp within the broader cannabis framework

This phase did not represent full legalization. Instead, it functioned as a controlled transition period allowing states to explore hemp production under federal oversight.

The Legal Reset: 2018 Farm Bill

The Agriculture Improvement Act of 2018 (2018 Farm Bill) established a new federal legal framework for hemp.

Key changes included:

• Definition of hemp as cannabis containing no more than 0.3% THC on a dry weight basis
• Removal of hemp from the Controlled Substances Act
• Recognition of hemp as an agricultural commodity rather than a controlled substance

This legislation marked a structural shift in federal policy, separating hemp from marijuana under the law and allowing for commercial cultivation under regulated conditions.

How Hemp Is Regulated Today (USDA Framework)

Following the 2018 Farm Bill, hemp is regulated through a combination of federal and state systems under the oversight of the U.S. Department of Agriculture (USDA).

Current regulatory elements include:

• Licensing requirements for growers
• Mandatory THC testing to confirm compliance with the 0.3% threshold
• Crop disposal rules for non-compliant plants
• State and tribal regulatory plans approved by the USDA

As of March 2026, hemp operates within a formal agricultural regulatory structure, with compliance requirements similar to other regulated crops but with additional controls related to THC content. Overall, the history of hemp in the United States reflects shifting economic, legal, and regulatory priorities over time.

Hemp vs Marijuana: What the Law Actually Says

Under current U.S. law, hemp and marijuana are legally distinguished based on THC concentration.

Key distinctions include:

• Hemp: Cannabis containing ≤0.3% THC (dry weight)
• Marijuana: Cannabis containing more than 0.3% THC

Both are derived from the same plant species, but their legal classification differs based on this threshold. This distinction determines regulatory treatment, cultivation legality, and federal oversight.

Timeline Summary: What Changed in Each Era

• Colonial Period (1600s–1700s)Hemp cultivated as a fiber crop for rope and textiles→ Established as an agricultural commodity
• 1800sExpansion followed by decline due to competing fibers and industrial changes→ Economic shift reduced demand
• 1937 Marihuana Tax ActImposed a federal tax and registration framework→ Increased regulatory burden on hemp production
• World War II (1940s)Temporary government promotion through “Hemp for Victory”→ Short-term increase in production
• Controlled Substances Act (1970)Cannabis classified as Schedule I; hemp included→ Federal control over cultivation
• 2014 Farm BillAuthorized research and pilot programs→ Limited reintroduction of hemp
• 2018 Farm BillDefined hemp and removed it from the CSA→ Federal legalization as an agricultural commodity
• Post-2018 Framework (Current System)USDA-regulated production with state participation→ Structured legal and regulatory system

Pros and Cons

Pros

• Clear legal evolution across distinct regulatory phases
• Established federal and state regulatory framework
• Defined legal distinction between hemp and marijuana

Cons

• Historical confusion in public narratives
• Regulatory complexity across jurisdictions
• Ongoing adjustments within the modern framework

Conclusion

The history of hemp in the United States reflects a progression from early agricultural use to complex federal regulation and eventual reclassification as a legal crop. Rather than a single policy shift, hemp’s legal status has evolved through multiple legislative stages, culminating in its current position as a regulated agricultural commodity under federal and state oversight.

Version: v1.1

Based on verified statutory and regulatory sources current as of March 2026.

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Cannabis policy and law in the United States is often misunderstood because federal and state systems operate at the same time. While many states have legalized cannabis for medical or adult use, federal law continues to regulate marijuana through national drug control statutes. This overlapping legal structure creates confusion about what is permitted under federal law and how federal agencies approach cannabis-related activities.

Understanding US federal cannabis law requires examining several components: the Controlled Substances Act, federal hemp legislation, federal tax rules, financial compliance requirements, and ongoing regulatory debates about marijuana scheduling. These areas together form the current federal framework governing cannabis.

Overview of Federal Cannabis Law

The core of US federal cannabis law is the Controlled Substances Act (CSA), which establishes federal drug schedules and defines regulated substances. Under the CSA, marijuana is defined as a controlled substance, while hemp is excluded from that definition when it meets specific statutory requirements.

Marijuana and tetrahydrocannabinols are currently classified as Schedule I controlled substances under federal law. Schedule I substances are placed in the category that federal law treats as having high abuse potential and no accepted medical use within the statutory framework of the CSA.

Although many states have adopted medical or adult-use cannabis laws, federal statutes remain applicable nationwide. This federal–state difference is one of the main reasons federal cannabis policy remains a complex legal topic.

The Controlled Substances Act and Marijuana Scheduling

The Controlled Substances Act provides the legal framework for how drugs are scheduled and regulated under federal law. The statute defines marijuana as a controlled substance while excluding hemp that meets federal statutory criteria.

Under federal law, marijuana and tetrahydrocannabinols remain in Schedule I, meaning they are subject to the strictest federal controls.

Authority to change the scheduling of a substance under the CSA belongs to the Attorney General of the United States. In practice, this authority is administered by the Drug Enforcement Administration (DEA), which conducts the scheduling process with scientific and medical review from the U.S. Department of Health and Human Services (HHS).

This administrative framework allows substances to be moved between schedules if federal agencies determine that statutory criteria are met.

Hemp vs Marijuana Under Federal Law

Understanding the difference between hemp and marijuana is essential to how federal law defines cannabis.

Federal law distinguishes hemp from marijuana using a statutory definition created by Congress.

The Agriculture Improvement Act of 2018, commonly called the 2018 Farm Bill, removed hemp from the federal definition of marijuana when the plant contains no more than 0.3 percent delta-9 tetrahydrocannabinol (THC) on a dry-weight basis. Hemp that meets this threshold is not treated as marijuana under the Controlled Substances Act.

Congress later enacted Public Law 119-37, which modifies aspects of the federal hemp definition. These changes are scheduled to take effect November 12, 2026.

Clarification: Hemp and Cannabinoids

Misconception

Hemp legalization makes all cannabinoids legal.

Clarification

Although hemp is excluded from the marijuana definition when it meets federal requirements, cannabinoid products may still fall under regulatory authority from federal agencies. For example, the Food and Drug Administration regulates certain products containing cannabinoids.

DEA Rescheduling Debate

This ongoing process reflects how cannabis policy and law in the United States continues to evolve at the federal level.

In 2024, the Drug Enforcement Administration proposed moving marijuana from Schedule I to Schedule III under the Controlled Substances Act. The proposal initiated a formal administrative process that includes hearings and regulatory review.

However, administrative hearings related to the rescheduling proposal were postponed and remain unresolved.

Clarification: Schedule III and Federal Legality

Misconception

If marijuana moves to Schedule III, cannabis becomes federally legal.

Clarification

Rescheduling changes how a substance is classified under the Controlled Substances Act. It does not automatically legalize recreational cannabis at the federal level. For historical context, federal cannabis policy developed alongside earlier history of hemp in the United States

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FDA Regulation of CBD

The Food and Drug Administration (FDA) regulates products that contain cannabidiol (CBD) when those products fall under the agency’s jurisdiction.

The FDA has stated that CBD cannot currently be marketed as a dietary supplement under federal law. This position is based on the existing regulatory framework governing food, drugs, and dietary supplements.

As a result, CBD products may be subject to FDA enforcement if they are marketed in ways that conflict with federal regulatory requirements.

Cannabis Banking and Financial Compliance

Financial institutions that provide services to cannabis-related businesses must comply with federal financial regulations.

The Financial Crimes Enforcement Network (FinCEN) requires financial institutions to file suspicious activity reports for transactions involving cannabis-related businesses. This reporting framework was designed to address compliance obligations under federal anti-money-laundering laws.

Because cannabis remains a federally controlled substance, financial institutions often implement enhanced compliance procedures when dealing with cannabis-related transactions.

Federal Cannabis Taxation and IRS 280E

Federal tax law imposes unique restrictions on businesses involved with federally controlled substances.

Under Internal Revenue Code §280E, businesses trafficking in Schedule I or Schedule II controlled substances cannot deduct ordinary business expenses from their federal taxable income.

Because marijuana remains a Schedule I substance under federal law, cannabis businesses may face significant limitations on the deductions they can claim for federal tax purposes.

State Legalization vs Federal Authority

State cannabis legalization has expanded across the United States, but federal law continues to apply nationwide.

In Gonzales v. Raich (2005), the U.S. Supreme Court ruled that Congress has authority under the Commerce Clause to enforce federal cannabis prohibition even in states that allow medical marijuana.

Federal courts are also considering additional constitutional questions related to cannabis markets. Some courts have disagreed on whether the Dormant Commerce Clause applies to state cannabis regulatory systems. This issue remains unresolved in federal litigation.

Future of Federal Cannabis Policy

Several federal cannabis policy issues remain under active consideration or development.

The DEA rescheduling proposal could potentially change marijuana’s classification within the Controlled Substances Act if the administrative process is completed.

Separately, statutory changes enacted through Public Law 119-37 will modify aspects of the federal hemp definition beginning in November 2026.

At the same time, federal courts continue to address constitutional questions related to state cannabis markets, including disputes involving the Dormant Commerce Clause.

These developments illustrate that federal cannabis policy continues to evolve through legislation, regulatory processes, and judicial decisions.

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Based on verified statutory and regulatory sources current as of March 2026.

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Cannabis and Human Health: Executive Summary

Research on cannabis and human health focuses on how compounds in the cannabis plant interact with the body’s endocannabinoid system, a biological network involved in regulating functions such as mood, appetite, and pain perception. Studies examine the effects of cannabinoids including tetrahydrocannabinol (THC) and cannabidiol (CBD), potential medical applications such as seizure treatment and chronic pain research, and documented risks including cognitive impairment and dependency. Scientific and regulatory institutions—including the National Institutes of Health, National Institute on Drug Abuse, U.S. Food and Drug Administration, and the World Health Organization—continue to study both the benefits and potential harms associated with cannabis exposure.cannabis and human health research continues to be examined across multiple scientific and regulatory fields.

Verified Legal / Regulatory Foundation

Federal Drug Classification

Under the Controlled Substances Act, cannabis has historically been listed as a Schedule I controlled substance, a category used for substances considered to have high potential for abuse and no accepted medical use under federal law at the time of classification. The statute establishes regulatory control but does not independently determine medical efficacy.

Agricultural Definition of Hemp

The Agriculture Improvement Act of 2018 defines hemp as cannabis containing no more than 0.3% delta-9 tetrahydrocannabinol (THC) on a dry-weight basis. This legal definition applies to agricultural regulation and production but does not establish medical claims or therapeutic approval.

FDA-Approved Cannabinoid Medication

The U.S. Food and Drug Administration approved the prescription drug Epidiolex, a purified cannabidiol formulation, for certain rare seizure disorders. The approval followed clinical trials evaluating its safety and effectiveness.

Confirmed Facts

• Cannabis plants produce biologically active compounds known as cannabinoids.

• Cannabinoids interact with biological signaling systems in the human body.

• The human body contains an endocannabinoid system, which participates in regulating processes including mood, appetite, and pain perception.

• The cannabinoid THC (tetrahydrocannabinol) produces psychoactive effects primarily through activation of CB1 receptors in the brain and central nervous system.

• CBD (cannabidiol) does not produce intoxicating effects and has been studied for potential therapeutic applications including seizure disorders and inflammatory processes.

• A purified cannabidiol medication, Epidiolex, has received regulatory approval for treatment of certain rare forms of epilepsy.

• Scientific studies frequently examine cannabis in the context of chronic pain research, among other medical conditions.

• Reported adverse effects of cannabis use may include cognitive impairment, anxiety, and potential dependency in some individuals.

• Long-term effects of cannabis exposure on the developing brain remain an active area of scientific investigation.

Clarifications / Misinterpretations

Cannabis vs. Cannabinoids

Cannabis refers to the plant species, while cannabinoids are the chemical compounds produced by the plant. Research often focuses on individual cannabinoids rather than the plant as a whole.

Psychoactive vs. Non-Intoxicating Compounds

Not all cannabinoids produce psychoactive effects. THC is the primary compound associated with intoxication, whereas CBD does not cause the same cognitive effects.

Medical Approval vs. Research Interest

Many studies examine cannabinoids for possible therapeutic roles, but scientific investigation does not necessarily indicate approved medical treatment. Regulatory approval requires controlled clinical trials demonstrating safety and effectiveness.

Structural Implications

Scientific research into cannabis and human health primarily centers on understanding how cannabinoids interact with the endocannabinoid system, a regulatory network involved in multiple physiological functions. This interaction has made cannabinoids a subject of investigation in fields including neurology, pain research, and immunology. At the same time, public health research examines potential risks associated with cannabis exposure, particularly concerning cognitive effects and developing brains. The coexistence of therapeutic investigation and risk assessment reflects the current structure of cannabis-related health research across medical and regulatory institutions.

Cannabis and Human Health: Conclusion

Scientific study of cannabis and human health focuses on the biological activity of cannabinoids and their interaction with the human endocannabinoid system. Research conducted by medical and public health organizations has documented both areas of therapeutic investigation—such as seizure disorders and chronic pain—as well as potential risks including cognitive impairment and dependency. As research continues, the understanding of cannabinoids, their physiological mechanisms, and their health implications remains an evolving field within biomedical science.

Version: v1.0

Based on verified statutory and regulatory sources current as of March 2026.

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Abstract

Between 2013 and 2021, national survey data in the United States indicated increases in youth-reported persistent sadness, hopelessness, and suicidal ideation, with partial stabilization in 2023. During portions of this period, adolescent cannabis prevalence did not demonstrate a consistent upward trajectory. Observational research reports associations between early and frequent cannabis use and increased psychosis risk, as well as co-occurrence between cannabis use disorder and internalizing disorders. Independent research also identifies housing instability, adverse childhood experiences, family mental illness, and socioeconomic stress as factors associated with psychiatric risk. Methodological limitations across studies complicate isolation of individual causal pathways. This review summarizes current evidence and measurement constraints without drawing policy conclusions.

Pull Quote: National trend comparisons do not establish individual-level causal relationships.

National Youth Mental Health Trends

Data from the Centers for Disease Control and Prevention (CDC) Youth Risk Behavior Survey indicate increases in persistent feelings of sadness or hopelessness among high school students between 2013 and 2021, with a slight decline observed in 2023. Reports of suicidal ideation increased during much of this interval.

These findings describe population-level trends. National trend comparisons do not establish individual-level causal relationships.

Youth Cannabis Prevalence

National survey data report that past-30-day marijuana use among adolescents did not consistently increase between 2013 and 2023. In several years within that period, prevalence declined.

Trend comparisons alone cannot determine causality.

Cannabis-Related Psychiatric Associations

Observational research identifies associations between cannabis use and certain psychiatric outcomes.

Findings include:

• Associations between early and frequent cannabis use and increased risk of psychotic disorders, particularly among individuals with preexisting vulnerability.
• Co-occurrence between cannabis use disorder and depression, anxiety, and suicidal behaviors.
• Retention of certain associations after statistical adjustment in some longitudinal models.
• Attenuation of suicidality associations in some sibling and familial-control studies.

These findings represent associations observed within observational and cohort research designs.

Cannabis Potency Context

Available data indicate that average tetrahydrocannabinol (THC) concentrations in cannabis products have increased over time. Legal market conditions have expanded access to higher-potency flower and concentrated products. Individual-level potency exposure is inconsistently captured in national surveys.

The magnitude of population-level psychiatric impact attributable specifically to potency variation remains uncertain.

Environmental and Familial Risk Factors

Independent research identifies associations between several environmental and familial variables and increased psychiatric risk, including:

• Housing instability and internalizing symptoms.
• Eviction-related stress and anxiety or depression.
• Adverse childhood experiences (ACEs) and increased risk of psychiatric disorders.
• ACE exposure and earlier or heavier cannabis use trajectories.
• Family history of mental illness and increased psychiatric vulnerability.
• Socioeconomic hardship and barriers to mental health care.

These variables are not uniformly measured across cannabis-related psychiatric studies.

Methodological Considerations

Across available literature, several methodological limitations are observed:

• Reliance on self-report survey data.
• Inconsistent definitions of heavy or frequent cannabis use.
• Incomplete measurement of baseline mental health status prior to cannabis exposure.
• Socioeconomic status frequently assessed using proxy indicators.
• Inconsistent measurement of environmental stress load.
• Limited capture of product potency and type in exposure assessment.

These factors limit precision in isolating independent effects within multi-factor models.

Conclusion

Current evidence indicates overlapping associations among cannabis use, environmental stressors, familial vulnerability, and psychiatric outcomes. Observational and longitudinal research identifies associations but cannot fully eliminate residual confounding.

Available research does not establish cannabis as a singular driver of national youth mental health trends. It also does not demonstrate that environmental variables fully account for observed associations.

Uncertainty remains regarding the relative contribution of individual variables within multi-factor risk models.

No policy conclusions are drawn.

References (AMA Style with Official Links)

1. Centers for Disease Control and Prevention. Youth Risk Behavior Survey Data Summary & Trends Report: 2013–2023. Atlanta, GA: CDC; 2024.
   https://www.cdc.gov/healthyyouth/data/yrbs/index.htm
2. Monitoring the Future Study. National Survey Results on Drug Use, 1975–2024: Secondary School Students.Ann Arbor, MI: Institute for Social Research, University of Michigan; 2024.
   https://monitoringthefuture.org
3. Young-Wolff KC, et al. Cannabis use and mental health outcomes in adolescents: longitudinal analysis. JAMA Health Forum. 2026.
   https://jamanetwork.com/journals/jama-health-forum
4. Addictive Behaviors Reports. Sibling-comparison analysis of cannabis use and suicidality. Addict Behav Rep. 2025.
   https://www.sciencedirect.com/journal/addictive-behaviors-reports
5. National Institute on Drug Abuse. Cannabis (Marijuana) Potency Data 1995–2022. Bethesda, MD: NIDA; 2023.
   https://nida.nih.gov/research/research-data-measures-resources/cannabis-potency-data
6. ElSohly MA, Mehmedic Z, Foster S, et al. Changes in cannabis potency over time in the United States. Front Public Health. 2024.
   https://www.frontiersin.org/journals/public-health
7. JAMA Network Open. Housing instability and internalizing symptoms among youth. 2025.
   https://jamanetwork.com/journals/jamanetworkopen
8. JAMA Network Open. Eviction-related stress and adolescent mental health outcomes. 2025.
   https://jamanetwork.com/journals/jamanetworkopen
9. Silins E, Horwood LJ, Patton GC, et al. Adverse childhood experiences and cannabis use trajectories. Lancet Public Health. 2023;8(6):e421-e430.
   https://www.thelancet.com/journals/lanpub

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