I did a reaserch paper on Transcendentalism in literature of the 60s and touched on acid. It basically got really, really popular in the 60s, and then the more conservative folk didn't like people tripping out in public, so they banned it.
LSD was legal until 1967. Albert Hoffman discovered the how to extract the chemical from dried erogot seeds (I think that's what it was...) in 1938; read the Bicycle Day report he wrote, it's an interesting read.