Cannabis Industry Mandates to Stay Union-Neutral Come Up Short
Unions Push for Enforcement of Labor Agreements in Legal Marijuana States.
As more states legalize marijuana, unions are crying foul over loopholes and a lack of enforcement that have kept state-backed labor peace deals from delivering the promised boon of organizing the industry.
Out of the 25 states that have made recreational marijuana distribution legal, eight have laws that either require or incentivize employers to sign labor peace agreements. Several other states, including Oregon and Massachusetts, are considering such measures either in legislation or ballot initiatives.
Only a few states with LPAs in place, including California and New Jersey, have issued penalties against employers for violating it—like when companies made deals with fake unions. This low enforcement contrasts with labor leaders reporting violations in the field.
Such peace agreements typically require employers to stay neutral on unionization and allow labor organizations access to the workplace, said Esta Bigler, director of Cornell University’s labor and employment law program and co-chair of the Cannabis Workforce Initiative. In turn, unions usually agree not to call a strike.
“This doesn’t mean you have a collective bargaining agreement. It doesn’t mean your workers are going to unionize,” Bigler said. “It only means that workers have more space to decide what they want, without fear or retaliation from their employer.”
Robert Solomon, an economics professor at University of California Irvine, said the states have to step up their enforcement for the LPAs to have the desired effect.
“Anything that’s going to have an impact on workers will have to come through regulation and enforcement of regulation or with goodwill on both sides,” he said. “The whole idea of an LPA is to have good will on both sides and labor management hasn’t always operated from that place.”
Inconsistent Results
LPAs are necessary to provide stability to an industry that’s still finding its footing, said Jim Araby, the strategic campaigns manager for United Food and Commercial Workers Union Local 5 in San Francisco.
“We wanted to create ongoing standards for the industry and we knew that had to be established from the very beginning,” said Araby, who served on a California state task force to help legalize medical marijuana in 2014. “There are very few times in history where you have labor and businesses working together to create an industry, so since we helped bring this about on the legal side, we wanted to make sure we were setting up workers for success.”
California law now requires any employer in the cannabis industry with more than 20 workers to have and maintain a peace agreement with a bona fide union in order to get a license. The law also allows employers to fulfill the requirement with a notarized statement saying it will enter into an agreement.
But Araby says the results have been “inconclusive.”
“You can get a license and just never actually sign the peace agreement,” he said. “There are some companies that we have really strong relationships with, but for the overall effectiveness of the peace agreements, I’d give it an incomplete.”
Room to Grow
Matthew Lee, general counsel for California’s Department of Cannabis Control, said unions and workers can file complaints with the state’s Agricultural Labor Relations Board if they believe an employer is violating the law. The ALRB is tasked with enforcing the state’s agricultural labor laws, which include the marijuana industry.
Lee said the policy has room to grow.
On the face of the statute, he said, whether and how employers need to get into an LPA after submitting a notarized statement and “how we follow up on that is not immediately obvious.”
“So as we look at ways to further refine the state’s labor peace agreement requirements, I suspect that’s an issue worth looking at,” he said.
Jim Glimco, president of the International Brotherhood of Teamsters Local 777 in Illinois, said unions there are also facing a similar issue.
Illinois doesn’t require LPAs, but instead gives employers in the cannabis industry more points in the licensing process if they have an agreement. Companies vying for a license get points that contribute to their applications, including those for having local ownership, giving back to the community, or having an LPA. Businesses with the most points will be granted licenses first.
“There’s just no enforcement,” he said. “I’ve seen so many cases where companies sign the labor peace agreement and then do whatever they want. We prefer to build our campaigns from the ground up so we have a strong backing before going to an LPA.”
William Bogot, co-chair of Fox Rothschild’s Cannabis Law Practice, said his clients in states with LPA mandates are typically eager to enter into the deals so they can get their licenses. But employers would be wise to examine the details of the agreements and the unions involved before signing, he said.
“Don’t just sign with the first union that comes along; not all unions are created equal,” Bogot said. “You want to pick ones that have prior experience in the industry and have established themselves a little.”
‘Bogus’ Unions
Among the few enforcement actions the states have undertaken, New Jersey’s Cannabis Regulation Commission in July 2023 ordered Columbia Care LLC to sign and maintain its LPA with a Teamsters union local or risk facing fines starting at $50,000.
The California ALRB has issued only two decisions related to peace agreements, both targeting illegitimate “bogus unions” that have no intention of representing or organizing workers. Unions have long accused cannabis businesses of creating or turning to the fake unions to make it look like they’re complying with the licensing requirements.
In July and October 2023, the ALRB found that the Professional Technical Union Local 33 and the National Agricultural Workers Union weren’t actual unions.
ProTec and NAWU had signed over 20 peace agreements with some of the biggest cannabis companies in the state, including Nabis, Glass House Brands, and Herbl. Yet ProTec failed to “respond to basic inquiries” about an LPA it had with a Palm Springs dispensary and has no offices or representatives based in California, the board said. NAWU also failed to provide information about its members and officers in the state.
After the rulings, the Department of Cannabis Control notified employers that any that had an LPA with ProTec or NAWU would have to sign one with a “bona fide” union or risk losing their license.
Those decisions followed years of pressure on the ALRB to take action against fake unions, Araby said.
“Employers have always tried to find ways around regulation and it’s kind of like whack-a-mole because there’s plenty of other fake unions out there,” he said.
