During all that time, the law of prohibition was making it more potent, to make it easier to smuggle.

Not at all. The US market was dominated for a long time by very low quality Mexican cannabis, where the growers seemed to treat it like industrial hemp production, producing large bales full of stems and seeds, poorly cured, with little regard for THC content. As it became more difficult to smuggle their bulky product across the border into the US, Mexican producers responded by smuggling in the laborers, instead, to produce the same low quality product inside the United States, on clandestine farms on public lands. Law enforcement responded to this with aerial surveillance, forcing growers indoors. That’s the point where quality began to improve, as growing indoors is more technically challenging, creating more proficient farmers, and quality improvements allowed the more expensive to produce indoor cannabis to compete with low quality outdoor grown cannabis.

Only once indoor production began to dominate the market did concentrates like hash oil begin to become common, as the more technically proficient growers gained the expertise to produce it, and had an economic pressure to maximize THC yields from what at that point had become agricultural waste, with a more discerning consumer now unwilling to smoke anything less than seedless flowers.