In 1916, Hemp production in the United States as at an all time high. Kentucky, a state that embraced the crop moreso than anyone else, was producing over 850,000 tons of raw material a year. The USDA even released a study saying that an acre of hemp produced more than 4x the amount of paper than trees. Needless to say, business was booming. Hemp was one of the most produced crops on American soil, and it did not look like things would be changing soon.
However, in 1937 the Marihuana Tax Act was passed. A significant tax was imposed on the sale of cannabis products (hemp included) and production was heavily discouraged. It is largely believed that hemp was lumped into this legislation to sway the markets. Both nylon and plastic were proving to be growing industries, and it is thought that lobbyists saw hemp as a threat to potential market share. Thus, much like the trolley system, the American hemp industry was unfairly targeted.
This did not ban hemp production however. During WWII, hemp made a brief comeback in popular culture due to the “Hemp For Victory” campaign. Realizing that they did not have the raw materials available to keep producing important wartime goods like paper and rope, the USDA encouraged farmers to plant over 400,000 acres during the war to support the war effort. This bubble was short lived however, and hemp fell back into obscurity once the war had been won.