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The Marihuana Tax Act of 1937

Nov 6, 1937

World Fibre Corporation

1021-11 South LaSalle Street,

Chicago, Illinois.

Attention Mr. H.W. Bellrose, President.


Your letter of October 14, 1937, addressed to the Attorney General, with enclosures concerning the relation of the Marihuana Tax Act of 1937 to the hemp fiber industry, has been referred to this Bureau for reply.

The growing of hemp for production of fiber and hurds is not an illegal procedure under the Marihuana Tax Act of 1937, provided the producer is duly registered and has paid the special occupational tax under the act, and observes the other requirements of the act relating to transfer, record keeping, etc.

The Bureau was given to understand that the hemp plant, when grown for fiber, is harvested at a time before the seeds have formed but there is no certainty that this harvesting always takes place before there is any resin in the flowering tops or leaves of the plant. However, the Bureau was informed by a grower and manufacturer of hemp that it was the practice to harvest the plant and allow the stalks to remain in the field to ret. In the course of retting, the leaves or foliage became detached from the stalks so that these stalks when ready for transfer to the factory for decorticating were practically free of any leaves or other foliage. Of course. the mature stalks of the plant are exempt from the operation of the act, and no transfer tax is payable with reference to such stalks which are free of the foliage. Thus, the needs of the fiber industry were recognized, and the act was drafted with the imposition of a minimum burden upon this supply of raw material for this industry consistent with a proper degree of supervision over the dangerous by-product represented by the leaves and flowering tops where the resin is secreted. i am sure you will agree with me that the transfer of the entire plant could not be exempted from operation of the act, because, although the reputable manufacturers of hemp fiber would have no interest in the foliage of the plant, there are unscrupulous persons who would make use of such a loophole in the law, and under color of legitimate transfer of fiber stalks, would be able to acquire and harvest all the resin containing foliage.

With reference to the foliage of the plant (flowering tops and leaves) which presumably separate from the stalks during retting, there is admittedly an enforcement problem presented, and the grower of hemp for fiber could render an important aid to the Bureau by collecting this residue and burning same in the field.

I am enclosing a copy of the Marihuana Tax Act of 1937 and the regulations thereunder for convenient reference.

Very truly yours,


Will S. Wood.

Acting Commissioner.




cc - Miscellaneous Tax Unit,

Bureau of Internal Revenue.


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