Not surprisingly, it seems that the hemp industry will suffer from the recession. Coming out of the Hemp Industries Association annual conference, economists have predicted a slight drop for the month of September. As the Boston Herald reports:

The Hemp Industries Association continues its 15th annual convention at Boston’s Best Western Roundhouse Suites. The group is sharing data about expanding markets and mapping out plans to bring back hemp farming.

The Conference Board releases its index of leading indicators for September, and economists expect a drop of 0.1 percent.

Now, granted, a 0.1% drop seems negligible, but you have to keep two things in mind:

1. 1) Industrial sectors are supposed to yield perpetual growth rates to be successful. This is a fundamental tenet of a growth economy. In fact, a business or sector has to grow at least at the same rate of inflation (another fundamental tenet of a growth economy) just to be stagnant.
2. 2) The recession hasn’t even really begun to penetrate all sectors.

Given that the hemp sector is already anticipating a drop (albeit minute), things aren’t looking that great. Overall, the recession isn’t going to be good for most sectors, but my guess is that the hemp sector will suffer more than other consumer product sectors. After all, hemp products are still mostly a luxury or niche good, and their pricing isn’t that competitive with non-hemp counterparts because the technology necessary to process hemp has developed at an equal rate (due to legislative disincentives). Most hemp products sold, then, will likely be either (a) consumed by die-hard hempsters, or (b) as non-recurring splurge buys.

Part of the irony of all this, however, is that the type of economy (i.e. a sustainable one) that would include energy efficient and eco-friendly products such as those made from hemp, would pretty much preclude the kind of economic crisis currently underway. Not to say that hemp would solve all our economic problems, but rather that the kind of economic mindset that it takes to seriously invest in hemp technologies is largely conterminous with the kind of mindset that eschews the pitfalls of a growth economy.

Late last week, hedge fund manager Andrew Lahde made headlines in the financial community when he gave it all up and, in his letter of resignation, touted hemp as an ethically defensible pursuit. Well, of the many heads that he turned, Mr. Lahde turned that of the Hemp Industries Association (HIA). As a press release on MarketWatch.com states:

The Hemp Industries Association (HIA), a trade association made up of hundreds of hemp businesses meeting in Boston today, is appealing to millionaire retired hedge fund manager Andrew Lahde to use a portion of his recent windfall made betting against sub-prime mortgage-backed securities to help bring back hemp farming in the United States. Mr. Lahde garnered media attention for stating in a resignation letter that hemp is needed as an alternative food and energy source and should be grown again in the U.S.

The press release then goes into some interesting figures on the viability hemp-based market niches. For example:

[...] the HIA Food and Oil Committee now estimates that the total retail value of hemp foods sold over the past 12 months in North America grew from $20 million last year to approximately $33 million this year.

How accurate these market figures are, however, is not the most interesting point. Rather, it’s how effective of a marketing stunt was for the HIA. They manage to seize an opportunity and piggy-back on a stroy that was already making headlines. As a public relations professional by day (who himself is often tempted to write his boss an Andrew-Lahde-style letter), I know for a fact that PR know-how like that doesn’t come cheap. I’m left to believe, then, that either the HIA has a massive marketing budget, or the people behind it really are on top of their game as a lobby group.