Mark Twain wrote: “It is not worthwhile to keep history from repeating itself, for man’s character will always make the preventing of the repetitions impossible.”
With momentum building among the American public and on Capitol Hill for the legalization of marijuana, a look back to the rise and fall of alcohol Prohibition provides insights into the future of the cannabis industry.
The 18th Amendment to the U.S. Constitution banned the manufacture, sale and transportation of alcohol in United States. Interestingly, it did not ban consumption. The amendment was supposed to reduce crime and corruption, eliminate poverty and other negative alcohol-related social issues, reduce the tax burden created by prisons and poorhouses, and generally make the country a better place. The temperance movement, with supporters such as the Anti-Saloon League, the Women’s Christian Temperance Union and even the Ku Klux Klan, lobbied heavily at the beginning of the 20th century for a constitutional ban on liquor. As anti-German sentiment rose with the American entry into World War I, the temperance movement effectively connected beer and brewers with Germans and posed drinking as an unpatriotic, even treasonous, pastime.
Based on this political momentum, the 18th Amendment breezed through both houses of Congress in 1917 and was ratified by the states 13 months later. Prior to ratification, Congress passed the Volstead Act, which provided for the enforcement of Prohibition.
This “noble experiment” failed on most counts. Consumption initially fell, but quickly increased. The death rate from homemade alcohol poisoning quadrupled. Crime increased and became “organized” with criminals like Al Capone making $60 million a year running bootlegging operations. Corruption of public officials skyrocketed. The federal government lost $11 billion in tax revenue while spending $300 million on enforcement. Prohibition supporters expected sales of other industries to skyrocket and landlords expected rents to rise with the closing of saloons nationwide. The entertainment industry also expected a boost with Americans looking for other forms of entertainment other than alcohol. Instead, there were large declines in the amusement and entertainment industries and none of the predictions for growth in other industries materialized. Support for the national experiment quickly dissipated.
The tide had begun to turn against Prohibition when the Great Depression hit the nation’s economy. Taxing alcohol to raise federal revenue became a popular idea among certain lawmakers, though many citizens expressed concern over huge increases in crime and violence. In 1932, the Democratic candidate for president, Franklin D. Roosevelt, promised the repeal of Prohibition. After winning the election, President Roosevelt in 1933 signed the Cullen-Harrison Act which authorized the sale of 3.2% alcohol beer and allowed the first beer sales since the beginning of Prohibition in January 1920.
Congress soon proposed the 21st Amendment, which would end Prohibition. The proposal was unique not only because it was the first to repeal a prior amendment, but it was the first to propose ratification by state ratifying conventions rather than by state legislatures.
State ratifying conventions and ratification by state legislatures are the two methods established by Article V of the U.S. Constitution for ratifying proposed constitutional amendments. The belief on Capitol Hill at the time was that state lawmakers might still be overly influenced by the temperance lobby, so power was given to the people instead. The people spoke and the amendment was adopted Dec. 5, 1933.
Interestingly, the 21st Amendment did not impose mandatory legalization of alcohol. Instead, it gave power back to the states to make their own laws regulating alcohol. State laws regulating alcohol had been in effect long before Prohibition, and Congress did not want to interfere with them. Section 1 of the amendment repeals the 18th Amendment. Section 2 provides: “The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.”
In other words, the states must abide by the others’ laws regulating alcohol, but the federal government let states govern themselves on alcohol regulation.
The rise of marijuana prohibition was similar to that of alcohol. The temperance movement targeted marijuana soon after its victory banning alcohol. The movement found its leader in Harry J. Anslinger, who authored the Marihuana Tax Act of 1937 and became the first commissioner of the Federal Bureau of Narcotics. The Marihuana Tax Act did not actually criminalize use or possession of cannabis but imposed stiff fines and jail time for not paying an occupational tax for marijuana handling. Anslinger continued his campaign against cannabis on the state level and by 1952, every state had laws banning marijuana. The U.S. Supreme Court, however, ruled in 1969 that the Marihuana Tax Act was unconstitutional after professor and activist Timothy Leary challenged his conviction for marijuana possession. Congress quickly passed the Controlled Substances Act in 1970, banning marijuana, which remains in effect today.
In response to the recent legalization of medical and recreational cannabis in so many states and the growing public support for an end to federal marijuana prohibition, several bills were proposed in Congress to end the prohibition in some form. Taking a page from the 21st Amendment, U.S. Senators Cory Gardner and Elizabeth Warren and U.S. Representatives David Joyce and Earl Blumenauer introduced the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act, which would allow each state to determine for itself the best approach to marijuana within its borders. Specifically, the STATES Act amends the Controlled Substances Act so that — as long as states and tribes comply with a few basic protections — its provisions no longer apply to any person acting in compliance with state or tribal laws relating to marijuana activities. The act makes clear that state-compliant transactions and all resulting proceeds would no longer be illegal under federal law.
Ultimately, this bill might not pass, but the approach Congress took with the 21st Amendment may be a viable option to resolve the current conflict between federal and state marijuana laws.
If Congress follows the states’ rights approach, the future of interstate commerce of marijuana is uncertain because the Commerce Clause of the U.S. Constitution gives the federal government power over interstate commerce. In 1935, only two years after the end of Prohibition, Congress passed the Federal Alcohol Administration Act to regulate the interstate commerce of alcohol and created the Bureau of Alcohol, Tobacco and Firearms to enforce those laws. A similar federal law will be necessary for marijuana, but the implementation of these new laws will be challenging. As a simple example, the maximum dosage for a single edible in Oregon is 5 milligrams of THC while California, Washington and Nevada allow 10 milligrams.
For now, the industry must be content with a state-by-state regulatory scheme. If the past is a prologue, however, then interstate commerce of marijuana should not be too far off.
Brad Blommer is a litigation and real estate attorney with Green Light Law Group (portlandmarijuanaattorneys.com) in Portland, Oregon. He has more than 17 years of experience, including all areas of trial practice, real estate transactions and disputes, foreclosure law and creditor’s rights, along with a detailed understanding of current marijuana laws. He is an active member of the Oregon State and Multnomah bar associations. He can be contacted by email at brad@gl-lg.com.