This act critically shapes the nexus of racism, power, and profit during the rise of the cannabis industry. It began with efforts to control Mexican migration by scapegoating Mexican people for cannabis possession and allowing police to search, detain, and deport Mexican immigrants.

The American Medical Association (AMA) fights against the tax because it is also imposed on physicians prescribing cannabis for medicinal purposes.

This begins the criminalization of cannabis state by state and becomes a model for drug regulation. This act also ultimately slows down the hemp production business, which was becoming a threat to magnates such as William Randolph Hearst, Andrew Mellon, and the DuPont family, who were invested in other industries, such as timber for paper pulp and synthetic fibers, which hemp provides an economical replacement for.