A federal judge has approved a settlement in a lawsuit that accused Timber Cannabis Co., a Michigan-based marijuana dispensary chain, of withholding tips meant for its employees. The deal aims to resolve allegations that the company kept gratuities left by customers instead of distributing them to the budtenders who earned them.
Timber Cannabis, which operates seven dispensaries across Michigan, agreed to pay $205,000 to settle the case. While the company admitted no wrongdoing, the settlement marks a significant resolution in a dispute that had raised concerns about fair labor practices in the cannabis industry.
The case was brought by lead plaintiff Chad Underwood, a former budtender at Timber Cannabis. According to court documents, Underwood claimed he used to make up to $150 in tips per shift — money left by satisfied customers in jars or baskets at the front counter. However, in 2024, management allegedly began collecting the tips and withholding them from employees.
Underwood and other employees argued that the move violated federal wage laws. More than 60 current and former workers are eligible to receive a portion of the settlement, said their attorney, Angeli Murthy.
U.S. District Judge Matthew Leitman approved the deal, calling the terms “fair and appropriate” during a brief hearing. The settlement avoids a prolonged legal battle while providing compensation to the affected employees.
Timber Cannabis denied any violation of wage laws in its official response to the lawsuit. However, the company’s decision to settle indicates a willingness to move forward without admitting liability or facing further litigation.
Michigan legalized recreational cannabis in 2018 for adults age 21 and older. Since then, the state’s marijuana industry has grown rapidly, creating thousands of jobs and generating millions in tax revenue. However, as the industry matures, labor disputes like this one are becoming more common, highlighting the need for clear workplace policies and protections.
The case also underscores how tipping culture intersects with newer industries like cannabis retail. While tips are often seen as a bonus in service industries, disputes over their handling can quickly turn into legal challenges if employers aren't transparent and compliant with wage laws.
For the budtenders involved, the settlement brings a degree of closure — and perhaps a renewed focus on fair treatment within an evolving industry.
