From the Marihuana Tax Act to Ohio’s licensing system, the government keeps deciding who can work with cannabis—and what happens to everyone else.
I went to see Reefer Madness: The Musical at Stuart’s Opera House in my hometown of Nelsonville, and it put me in a Reefer Madness mood.
The musical, written by Kevin Murphy and Dan Studney, turns the infamous 1936 film into a satire of cannabis fearmongering. Stuart’s production, directed by Devin Sudman, brought that history home. Fiona Petticrew interviewed me for her coverage of the production in The Post. We discussed what people could learn from the play and why I believe we’re still experiencing forms of Reefer Madness.
The old propaganda is easy to recognize. The classic claims are so exaggerated that people can watch a musical about them and laugh. Cannabis supposedly destroyed your judgment, turned you violent and sent your life into catastrophe. The harder thing to recognize is how control over cannabis operates when the language sounds reasonable.
Today, that control can look like an expensive application, a limited number of licenses, a rule that rewards an existing business or a change that shuts down somebody else’s market. Approved companies gain opportunities while consumers, smaller businesses and home growers face another set of restrictions.
After nearly a century of cannabis restrictions, are we finally opening access—or deciding who gets to own it?
The propaganda was ridiculous. The restrictions were real.
Cannabis had a place in American medicine long before the modern dispensary. It entered the United States Pharmacopeia in 1850 and remained there until 1942. Its preparations had limitations, including inconsistent potency and unpredictable dosing, but its medicinal use was already part of recognized pharmaceutical practice.
Restrictions also preceded the famous film. The Library of Congress documents El Paso’s 1915 ordinance, along with newspaper coverage describing cannabis as a dangerous Mexican drug. Local physicians and pharmacists objected to the ordinance’s reach because cannabis was an established medicine.
The broader Reefer Madness campaigns helped change how Americans understood the plant and the people using it.
William Randolph Hearst’s newspapers amplified sensational drug stories. Harry Anslinger, commissioner of the Federal Bureau of Narcotics, presented alarming accounts of crimes attributed to cannabis. The FBN was one of the predecessor agencies of today’s DEA.
Racial and class prejudice shaped the messaging. Stories associated cannabis with Mexican immigrants, Black communities and threats to white society. Allegations of violence and sexual danger helped make marginalized consumers targets of suspicion. Newspapers and government officials reinforced a frightening story about a plant much of the public barely understood.
That story helped make government intervention appear necessary.
Cannabis’s economic uses belong in this history, too. Its fiber and seed oil had commercial value. Claims that Hearst and DuPont engineered prohibition to protect competing paper and chemical interests remain historically disputed. Hearst’s role in publishing sensational coverage is documented; the specific industrial motives attributed to him require separate evidence.
The government’s intentions for taxation, however, were stated directly.
In the 1937 congressional hearings, Treasury lawyer Clinton M. Hester explained how the proposed Marihuana Tax Act would work. Covered transfers to registered recipients generally carried a $1-per-ounce tax. Transfers to unregistered recipients carried a $100-per-ounce tax, with exceptions for specified transactions.
Hester stated that “the $100 tax on unregistered persons is designed to be prohibitive.”
The government intended to preserve approved industrial, medical and scientific uses while discouraging other consumption. Registration, order forms and records would make transactions visible to authorities. Criminal penalties would enforce the arrangement.
The price was part of the restriction.
Samuel Caldwell’s prosecution shows how quickly those restrictions could take someone’s freedom. A 1938 FBI bulletin recorded that he received a four-year prison sentence in October 1937 for violating the new law.
The tax requirements also created a self-incrimination problem. Decades later, in Leary v. United States, the Supreme Court held that complying with the transfer-tax provisions exposed Leary to a real risk of incriminating himself under other marijuana laws. His Fifth Amendment claim defeated that tax conviction.
People challenged the government’s approach from the beginning. In his May 4, 1937, testimony before Congress, Dr. William Creighton Woodward, representing the American Medical Association, questioned the evidence behind the bill and warned about burdens on doctors, pharmacists and farmers. He also raised the possibility that future research could establish medical uses that restrictive policy would obstruct.
We had people asking for better evidence before these policies became history. The government proceeded anyway.
A price and a smoke screen
Today, we’re living through a form of modern Reefer Madness where money and power make participation expensive, selective and punishable outside government-approved arrangements.
Ohio gives us something concrete to examine.
Under the state’s current cannabis fee schedule, a dispensary application costs $5,000. Issuing its certificate of operation costs another $70,000. Renewal is listed at $35,000 per year. A Level I cultivator faces a $20,000 application fee and a $180,000 certificate fee.
All of those fees come before a business pays for its building, equipment, employees, inventory and the work required to comply with the rules. And having the money does not mean a license is available.
To someone with substantial investment behind them, those amounts may be manageable business expenses. To someone with experience growing cannabis, working in a dispensary or studying the plant, these fees can make ownership impossible before that person even gets started.
This is what I mean by a price and a smoke screen.
The process can appear open because an application exists. The financial requirements can make it functionally closed to most people. Licensing then determines which of the remaining applicants get permission.
Ohio’s original selection process also deserves scrutiny. A 2018 state audit documented scoring errors, inconsistent standards and weak controls in cultivator licensing. Auditors found no evidence of intentional manipulation, but they found that opportunities to manipulate scores existed. Those failures affected a process deciding who could enter a valuable new industry.
Governments should explain what those costs accomplish. How much pays for necessary oversight? How much discourages participation? What opportunities exist for people who can grow a good product or serve their community but cannot raise hundreds of thousands of dollars?
“Regulated” should not end the conversation about whether a system is fair.
The “lucky ones” keep getting new opportunities
An early cannabis license can become more valuable every time the law changes.
Ohio’s adult-use rollout illustrates this well. In June 2024, the state opened applications for dual licenses that would allow existing medical dispensaries to serve adult-use customers. That route was built into the voter-approved legalization framework. For those businesses, an existing permission became access to a much larger customer base.
Now federal policy has attached another opportunity to state medical licensing. An April 2026 federal rule moved covered medical marijuana into Schedule III and established an expedited DEA registration process for state medical marijuana license holders.
This federal pathway also matters financially. Nasdaq says companies following it can become eligible for listing if they demonstrate federal compliance and meet the exchange’s other requirements. A state license alone does not guarantee registration or a listing, but it can provide the starting point for an opportunity unavailable to businesses outside that framework.
A license originally obtained for medical sales can become the foundation for adult-use expansion and, later, a route toward federal recognition and broader access to investment. At what point do we stop describing these outcomes as companies getting lucky and start examining how the rules create their advantages?
Businesses make strategic decisions. They acquire licenses, hire people who understand regulations and position themselves for changes. The public deserves to understand how those opportunities are designed and whether people outside the existing industry have a realistic route in.
Every new benefit attached to an old license increases the importance of who received—or could afford to acquire—that license in the first place.
Meanwhile, other routes are closing
Remember when THC drinks started showing up in ordinary stores?
I was working in a dispensary while those products were becoming more visible. From what I saw, some consumers and frontline workers were happy people had another way to access cannabis. Everybody does not want the same product, and everybody does not want to shop in a dispensary.
The 2018 Farm Bill’s hemp definition helped create that separate market. Its delta-9 THC threshold became the basis for businesses selling products that consumers could find outside state marijuana programs. People built businesses around that opening. Consumers built habits around it.
Ohio’s Senate Bill 56 moved in the other direction. Governor Mike DeWine vetoed a provision that would have temporarily allowed a separate regulated THC beverage market. The legislation also established a statewide cap of 400 dispensaries. Its hemp restrictions have faced court challenges over enforcement.
Those decisions determine who can continue serving customers and under what conditions.
Federal changes reach further. The revised hemp definition excludes specified cannabinoid products and viable seeds from cannabis plants exceeding the new total-THC threshold. Portions of those changes have been delayed until December 11, 2026. Affected products and seeds will lose the federal hemp status that supported their trade.
For a home grower, access to seeds is access to the plant itself. For a small business, losing a lawful supply route can mean losing the business.
Put those developments beside the expanding opportunities for qualifying medical operators. One part of cannabis is gaining recognition while other ways of participating face new restrictions.
We should be asking why those outcomes are happening together.
Public protection should come with public accountability
There are legitimate safety questions surrounding cannabis products. Consumers should know what they’re buying. Products should be tested, accurately labeled and kept away from children. These goals still leave choices about how the government responds.
Could a business meet testing, labeling and age-verification requirements while continuing to operate? Could regulators address a dangerous manufacturing practice without eliminating an entire sales channel? Could home growers have a practical way to test what they produce?
A government claiming to protect consumers should explain why its chosen restrictions are necessary and what alternatives it considered.
Hemp businesses and dispensaries are angry at each other. They operate under different costs, permissions and restrictions, and they compete for some of the same customers. Their frustrations deserve to be directed toward the policy decisions that created those conditions.
Lawmakers should answer for those decisions. Businesses that lobby to restrict their competitors also deserve scrutiny. Consumers should not have to choose a corporate side to argue for safe products, reasonable prices and more ways to participate.
Who can afford the consequences?
Money also affects what happens when something goes wrong. An established company may have the resources to hire attorneys, challenge an enforcement action and continue operating through a dispute. A smaller business may exhaust its savings trying to reach the same point.
The size of a fine does not tell us whether it changed a company’s behavior. We should examine the benefit gained, whether violations recur and whether the business keeps its permission to operate. If a penalty is smaller than the financial advantage of violating a rule, what is it actually discouraging?
Consumers face a different kind of vulnerability. Ohio law preserves employers’ ability to refuse to hire, discipline or discharge someone because of marijuana use. A medical card does not automatically protect that person’s job.
Even sharing comes with conditions. Ohio’s adult-use law requires permitted unpaid transfers to occur on privately owned property used primarily for residential or agricultural purposes, alongside other restrictions. Legal protection depends on following those boundaries.
We have made room for cannabis investment while leaving ordinary participation complicated and vulnerable. People should be able to understand their rights and rely on them. They should not have to hope an officer, employer or regulator decides to be understanding.
Was control the point all along?
Cannabis has value across medicine, agriculture, consumer products and industrial uses. Government decisions about access reach into all those possibilities.
The original campaigns helped make restrictive control over cannabis publicly acceptable. Hester’s testimony shows officials openly discussing how taxation could preserve approved uses while making other access prohibitively expensive.
People continued using cannabis through the restrictions that followed. Its medical, agricultural and commercial possibilities remained. Governments retained enormous influence over whether those possibilities could legally develop and who could participate in them.
Medical programs created limited business permissions. Adult-use laws gave some existing license holders access to larger markets. Federal recognition can now attach another advantage to a qualifying medical license.
Each change can be celebrated as progress while making the original permission more valuable.
Was cannabis restricted for nearly a century so its opportunities could eventually be concentrated among approved participants? How much of today’s market reflects deliberate efforts to preserve that control?
Those questions require evidence connecting the people, business interests and decisions involved. The repeated use of government permission to restrict participation is already visible. We should examine how that authority has carried through changes in the law and who has benefited as markets reopened.
In 1937, officials described using taxation to direct cannabis into approved channels. Today, expensive licenses and selective eligibility still determine who can build a business. New opportunities can strengthen existing operators while other businesses lose their routes to market.
Legal purchasing has improved people’s lives. I want those gains to continue. I also want us to judge progress by whether more people can participate safely, affordably and without unnecessary punishment.
The production at Stuart’s Opera House gives us a chance to laugh at how ridiculous the old propaganda became. Outside the theater, the questions remain serious: Who gets permission? Who can afford it? Who benefits when another route closes?
We recognize Reefer Madness when it tells us a joint will ruin society. Can we recognize it when exclusion is presented as progress?
