Cannabis Prohibition Repeal: Will History Repeat Itself?

June 15, 2021


In 1919, through the ratification of the 18th Amendment, the federal government prohibited the sale of alcoholic beverages.  By most accounts, the “Great Experiment” was a failure.  It eliminated jobs and drastically reduced tax revenue.  Estimates range from a loss of $861M- $11B in tax revenue during the period 1920-1931.  An additional $310M was spent on law enforcement of prohibition.  These economic costs became especially pronounced during the “Great Depression”.  Although prohibition may not have created organized crime, it certainly expanded it, and accelerated it’s growth due to lucrative liquor sales.  

In 1932, the United States was in the midst of the Great Depression, similar to the COVID-19 related economic downturn we are dealing with. The country, looking for solutions, elected Franklin D. Roosevelt, a Democrat who proposed an agenda of progressive policies to rebuild the economy. One of the primary components of his plan was repealing the federal prohibition of alcohol.  

On March 22, 1933, within days of his inauguration  Congress authorized, and FDR signed a law which would allow the sale of 3.2 percent beer, thought to be too low in alcohol concentration to be intoxicating.  This action is comparable to the federal legalization of HEMP, a low THC strain of cannabis, in 2018.  

By December 5, 1933 the 21st amendment was passed, repealing federal prohibition, and guaranteeing the rights of the states to develop their own liquor laws.  Federal liquor laws and regulations, primarily the Federal Alcohol Administration Act, were implemented over the next two years 1934-35.  These laws developed a system of licensing, regulation, and taxation of alcohol sales.  

In essence, many of the same factors which led to the repeal of alcohol prohibition, jobs, revenue, social and justice reform, could lead to the repeal of the prohibition of cannabis cultivation and sales.