I just came across an article about how hemp and marijuana came to be outlawed. As you may already know, both were legal until the 1930s when the "disease" of "reefer Madness" was made up to scare people about drugs. Worse, this scare tactic was thought up by those who stood to benefit financially from its being outlawed.
William Randolph Hearst was a tycoon with large holdings in paper mills and timber was being threatened by recent advancements in machinery to process hemp. The processing of hemp had been a labor intensive ordeal which at various times was handled by slaves or prisoners. New machinery was threatening to make hemp paper the premiere choice for newspapers due to its greater strength, durability and its resistance to yellowing. The DuPont corporation had recently introduced a new synthetic fiber for making rope and was likewise motivated to hinder or destroy their competition. Hearst and DuPont joined forces with the one entity capable of destroying competition from a long standing product. The Federal Government. Henry Anslinger, the first head of the Federal Bureau of Narcotics, joined in the fight
Due to this attack on hemp and marijuana, the mayor of New York, Fiorello LaGuardia, created a commission to undergo a six year study of the drug. However, the LaGuardia commission's findings were not consistent with the image Hearst, DuPont and Anslinger were trying to convey. Only halfway throught the six year study which eventually reported that “marijuana caused no violence at all and cit[ed] other positive results,” the smear campaign was begun. Anslinger had three full years to discredit the commission and was quite successful at it. As a result the commission's findings were dismissed by the public.
As a result of this pairing of big corporations with big government America remains the only industrialized country where it is illegal to grow hemp. This is despite previous government findings that one acre of hemp could replace 4.1 acres of timber for wood pulp. It is also more environmentally friendly as its processing need not use chemicals like bleach. There is also the potential for hemp to be used to produce clothing, food, oils (both edible and combustible) and plastics (some auto body parts are made from hemp)
Ron Paul, long the only sane voice in DC, recently introduced a bill, The Industrial Hemp Farming Act, that would get the Fed Gov out of the way and allow the crop to be grown in accordance to State law.
More information on hemp can be found at WikiPedia