Marihuana Tax Act of 1937 rises from the dead

Samuel Caldwell\'s mugshot in 1937.

Nothing is more scary on Halloween than the undead. Zombies, ghouls, vampires — all were once dead, but were resurrected and now terrorize living society. It is both frightening and frustrating to think you have finally put something evil to rest with a silver bullet or a stake through the heart, only to find that it has risen from the dead and found new life.

So the fright of pro-cannabis voters was real when we saw that the Colorado legislature wanted to resurrect the most heinous and destructive thing in the history of cannabis prohibition: the Marihuana Tax Act of 1937. Timothy Leary had put this grotesque creature to death in 1969 when he won a landmark U.S. Supreme Court case. Now, a similar monster is being revived by the Colorado legislature as the Marijuana Tax Act of 2013, now known as Proposition AA.

The Marihuana Tax Act of 1937 was primarily the unholy creation of Harry J. Anslinger, head of the Federal Bureau of Narcotics from 1930 to 1962. Anslinger had made his career enforcing alcohol prohibition, but when that was repealed in 1933, Anslinger needed a new illegal substance to secure his job.

“Marihuana” was a perfect target: It was used primarily by minorities who were feared by the public due to newspaper mogul William Randolph Hearst’s nationwide “Reefer Madness” campaign to demonize cannabis and hemp. Hearst was a racist who used the little-known term “marihuana” to describe what had always been commonly known as cannabis or hemp. Hearst ran a very effective scare campaign to convince the public that “Mexicans and Negroes” were smoking a new drug called “marihuana” that was causing them to rape and murder white people.

The Marihuana Tax Act of 1937 used a unique legal theory. Since Congress did not have the power to ban substances directly because of the 10th Amendment, they needed an indirect method of prohibition. They were inspired by the National Firearms Act of 1934, which effectively outlawed machine guns through the requirement of a “prohibitive” tax.

The Marihuana Tax Act adopted the “prohibition through taxation” scheme. Rather than making marijuana possession illegal directly, the law required you to purchase a tax stamp in order to possess marijuana legally. Because the taxes were set prohibitively high, it discouraged compliance, creating de facto prohibition.

Congress passed the law with very little debate, despite testimony by farmers, who complained that the law would destroy the hemp fiber and seed industry, and from the medical community, who complained that cannabis had been in the U.S. pharmacopoeia since 1850.

The new law went into effect on Oct. 1, 1937. A few days later, Denver’s own Samuel Caldwell became Anslinger’s poster boy as the first prosecution under the new Marihuana Tax Act. Caldwell, a 58-year-old Denver resident, was arrested for possessing and selling marihuana without being in possession of his tax stamp. Caldwell was arrested on Monday, Oct. 5, indicted by a federal grand jury on Thursday, Oct. 8, and sentenced to four years in Leavenworth Federal Penitentiary on Friday, Oct. 9.

Caldwell’s speedy prosecution was front-page headlines throughout the country. Anslinger himself traveled to Denver from Washington, D.C., for the photo opportunity at Caldwell’s sentencing.

The Marihuana Tax Act proved an effective method of prohibition, and the legal hemp and cannabis medicine industries soon disappeared. However, in 1969, Timothy Leary’s conviction for possession of marijuana without a tax stamp was overturned by the U.S. Supreme Court. Since marijuana was illegal on a state level in many places, the Court ruled that the federal tax stamp requirement violated Leary’s Fifth Amendment right against selfincrimination.

Now, in 2013, the 1937 Marihuana Tax Act has been revived from the dead as Proposition AA, which proposes a prohibitive tax of up to 30 percent on cannabis. This would be the highest tax on a product in Colorado history. For comparison, alcohol is taxed at a rate of less than 1 percent.

Prop. AA is a regurgitated abomination of the 1937 law, and it is supported by the most anti-marijuana people in the state, including Gov. John Hickenlooper, Attorney General John Suthers (Harry Anslinger’s modern resurrection) and Smart Colorado (channeling Hearst’s Reefer Madness propaganda).

The only difference this time is that, thanks to TABOR (Taxpayer’s Bill of Rights), the voters get to decide the fate of this demon tax act. Will voters pump new life into this Fiscal Frankenstein, or will they put a stake through its heart again?

Laura Kriho works with the Colorado 420 Coalition (


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