Why Was Hemp Made Illegal in 1937? What the Law Actually Says

Hemp was not banned because of what it is — it was restricted because of how it was classified.

Throughout the 20th century, U.S. drug policy failed to distinguish between hemp and marijuana. As a result, a non-psychoactive agricultural crop became tied to broader cannabis prohibition.

This article explains what laws affected hemp, why those decisions were made, and how those policies shaped decades of restriction.

What Law Made Hemp Illegal?

The primary law that restricted hemp in the United States was the Marihuana Tax Act of 1937. While it did not directly ban hemp, it imposed strict regulations and taxes that made legal production extremely difficult.

Later, the Controlled Substances Act of 1970 classified cannabis as a Schedule I substance. Because hemp and marijuana were not legally separated at the time, hemp remained restricted under federal law.

Why Was Hemp Made Illegal?

Hemp was not targeted independently. Instead, it became restricted due to its association with marijuana.

At the time, federal policy did not distinguish between low-THC hemp and high-THC cannabis. Public perception, political priorities, and regulatory simplicity all contributed to hemp being included in broader drug enforcement policies.

Hemp vs. Marijuana: What’s the Difference?

Hemp and marijuana both come from the cannabis plant, but they are legally and chemically different.

• Hemp contains less than 0.3% THC and does not produce psychoactive effects
• Marijuana contains higher levels of THC and is regulated differently

The lack of this distinction in early laws led to hemp being restricted alongside marijuana.

The Commission That Reviewed Cannabis Policy

In 1970, the U.S. government established the Shafer Commission to evaluate cannabis policy.

After conducting national hearings and scientific review, the commission released its report, Marijuana: A Signal of Misunderstanding (1972), recommending decriminalization of personal use.

“The criminal law is too harsh a tool to apply to personal possession…”

— Shafer Commission, 1972

Despite these findings, federal policy remained unchanged.

The War on Drugs and Policy Expansion

During the 1980s, federal drug enforcement expanded significantly.

Policies included:

• Mandatory minimum sentencing laws
• National anti-drug campaigns
• Increased enforcement funding

Cannabis remained classified as a controlled substance, and hemp continued to be restricted due to its legal association.

The Impact on Hemp

As a result of these policies:

• Hemp production declined in the United States
• Research and cultivation were limited
• Public understanding of hemp remained unclear

Despite its industrial uses, hemp was effectively removed from U.S. agriculture for decades.

What Changed After the 2018 Farm Bill?

The 2018 Farm Bill created a legal distinction between hemp and marijuana.

Hemp was defined as cannabis containing less than 0.3% THC and was removed from the Controlled Substances Act.

This allowed:

• Legal cultivation of hemp
• Expansion of hemp-based industries
• Renewed research and agricultural use

However, hemp remains regulated at both federal and state levels.

Conclusion

Hemp was not banned because of its properties, but because it was grouped with marijuana under federal law.

Only in recent years has policy begun to separate the two, allowing hemp to return as a legal agricultural and industrial crop.

Coming Next

In Part 4, we follow the activists. We also look at the researchers and farmers who kept hemp alive. They persevered even when the law said it was dead. While the U.S. clung to outdated policies, the rest of the world moved ahead.

Next: Part 4 – Cracks in the Wall (1990s–2000s)

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