Representatives of state chapters of the U.S. Hemp Industries Association (HIA) have discussed requesting financial records from the national office of the organization after being informed it is facing potential insolvency
HIA’s response post-publication of this article.
Two independent sources confirmed to HempToday that discussions are ongoing over how to resolve the situation. The state representatives have sent correspondence and had at least one teleconference with national headquarters over the past month regarding the problems.
On a conference call in mid-May, the national office warned state chapters of a precarious financial picture, and informed them that Q1 2020 payouts to the state organizations would be delayed to July, according to the sources and two documents reviewed by HempToday.
Correspondence among chapters as a result of that call at one point recommended requesting a formal audit of HIA’s finances. A proposal circulated among chapter representatives early this month, meanwhile, included the possibility of requesting the Association’s financial records back to 2017, minutes of meetings, and a list of multi-year contracts to which the Association is party, among other documentation.
HIA, which according to its website has more than 1,500 members, charges from $100 to $8,100 in dues for memberships in 12 categories. The Association collects membership fees at the national level, then disburses 50% back to state chapters where those members are located, under the group’s formal agreement with the state organizations.
Chapters mentioned in the correspondence include: Arizona, California, Colorado, Florida, Illinois, Kentucky, Louisiana, Michigan, Nebraska, New Jersey, New York, Tennessee and Texas, as well as the HIA’s Pacfic Northwest chapter.
While the correspondence was neither dated nor signed by chapter representatives, sources verified that two letters reviewed by HempToday are the basis for ongoing discussions between the states and HIA’s national administration.
HIA plan floated
The June correspondence among the states, in part, summarized the views of several chapter representatives regarding an HIA proposal to treat the past due amounts as loans to the national organization, and included plans to overcome the troubles. But some chapters expressed skepticism about the organization’s strategy for getting beyond the financial squeeze.
One state organization respondent said his members were “concerned about nationals (sic) and appreciates (sic) the plan, but weren’t very convinced that the current plan is going to work.”
Another “would like further explanation and budget for the initiatives laid out by (the) national (Board of Directors).” That chapter is “not inclined to give up their dues. They have commitments for the money,” the summary noted.
Several other chapters noted they would prefer getting the dues owed them from HIA as soon as possible. One reported that while its chapter doesn’t have a formal response yet to HIA’s recovery proposal, “they expressed wanting to have their dues as they are a new chapter and are yet to receive anything.”
Some chapters were reported to be sympathetic with HIA’s plight. “They feel that the value of the comradery and group as a whole is much more valuable than their dues allocation, so they want to support national’s needs so they can get out of their rough spot,” according to the June correspondence.
Another would “rather have their money, but have ideas for producing money,” the summary noted.
EDITOR’S NOTE: HIA issued the following statement in response to this story: The U.S. hemp industries are not unique in being profoundly impacted by the unprecedented health crisis and the accompanying economic fallout. As the foremost trade association representing the interests of all facets of U.S. hemp, Hemp Industries Association members at all levels are working to meet the challenges of this extraordinary moment. HIA is fortunate to be able to partner with dedicated and talented state chapter leaders to address the near-term challenges of the organization and to ensure the long-term advancement of the U.S. hemp industries. We are excited for the future of HIA and look forward to providing a comprehensive update in the near future, once internal deliberations are complete.”