The Unionization of Cannabis

June 15, 2023 · MG Magazine

Teamsters Local 777 members walked off their jobs at two of Green Thumb Industries’ Rise Cannabis shops in Illinois the day before 4/20. For thirteen days, they picketed the dispensaries, demanding better wages and other concessions. Even when the strike was over, the strife wasn’t. The Teamsters and GTI circulated dueling stories about what a new labor-management agreement said—or whether a new agreement even had been reached. Then the union began charging the company with unfair labor practices that violate federal law and spying on private employee conversations. GTI accused the Teamsters of spreading misinformation and not approaching collective bargaining seriously.

Welcome to the brave new world of organized labor in cannabis. It’s a novel landscape for workers and employers in the space, and it’s not going away.

A wave of unionization has swept the cannabis industry in 2023. In May, 48 employees at Advanced Grow Labs in Connecticut joined United Food and Commercial Workers Local 919. In February, California budtenders at Captain Jack’s Dispensary unionized with Teamsters Local 1932. In January, Illinois workers at the Sunnyside Dispensary in Rockford joined Teamsters Local 777.

Unions have a long history in the United States. One of the earliest examples is the formation of the Federal Society of Journeymen Cordwainers in 1794 to protect the rights of shoemakers. In 1866, the National Labor Union was founded, in part, to call on Congress to mandate an eight-hour work day. That lofty goal was not accomplished until 1917 after the Supreme Court upheld the Adamson Act in the case Wilson v. New.

Aimed at protecting railroad workers, Georgia Rep. William C. Adamson (D) introduced the Adamson Act in 1916 to regulate the hours interstate railroad workers could work and provide time and a half for overtime. Despite protest from the railroads, Congress passed the act in 1916 at the request of President Woodrow Wilson to avoid a national strike, which would have crippled production and transportation of weapons during wartime. The railroads refused to abide by the new federal labor law and challenged the legislation in court until the Supreme Court’s five-to-four decision declared the act constitutional.

Unions gained significant momentum pre-World War I due to a massive increase in factory work, and then again during the Great Depression as workers sought to protect their livelihoods in a downward-spiraling economy.

Unions reached their peak from the middle of the 1950s through the 1970s before beginning to decline due to a number of economic and political developments. According to the U.S. Bureau of Labor Statistics, union membership sagged to 14.3 million in 2022, or roughly 10 percent of the country’s wage and salary workers—the second consecutive annual drop and the lowest number on record. With lower membership numbers year after year, it should come as no surprise union leaders are looking to emerging industries to bolster their bottom lines, which are wholly dependent on membership dues. While dues vary, they’re often calculated as a percentage of gross earnings and typically hover around 1 to 2 percent.

With cannabis employment numbers hovering around 400,000, the industry could contribute 40,000 workers to union ranks. But cannabis remains a Schedule I substance at the federal level. Does the industry’s quasi-legal status affect unions’ effectiveness as bargaining bodies and therefore their ability to recruit?

“Even though cannabis is still a Schedule I substance, proprietors still need to abide by federal labor laws, so it hasn’t had an impact on unions’ ability to organize and collectively bargain in the industry,” said James Glimco, president of Teamsters Local 777. “With that in mind, the Teamsters strongly support legalization at the federal level. Nobody in cannabis—business owners, workers, customers, or patients—should have to operate in a gray area of the law.”

For many Americans, unions are a crucial institution for protecting workers’ rights and eliminating ambiguity regarding workplace rules, as well as a way of ensuring equitable distribution of salaries and benefits. But their presence also changes the landscape in terms of how industries function. So what does unionization mean for the cannabis sector?

“Unionization efforts in the industry have been active since at least 2012,” said Bryan Bergman, partner at the law firm Nolan Heimann. “The labor unions saw early on the advantage of a new industry, and there was clearly going to be a lot of opportunity to expand and help protect workers. For instance, in Los Angeles in 2012 they got behind certain initiatives that protected some of the existing operators at that time.”

According to Bergman, unions were instrumental in California legislative negotiation and implementation of the Cannabis Regulation and Safety Act of 2015. With these and other examples, Bergman sees unions as an influential voice in the overall legalization and normalization process.

“The unions have lobbyists; they have very strong political clout in a majority of states where legalization is occurring,” said Bergman. “To get that proper discussion going, you usually need the help of a coalition of voices to get something happening. It seems union participation was a necessary component, on the West Coast at least, to get regulations implemented at both the state and local level in California.”

Bergman also recognizes the same unionization is happening in other parts of the country, and the process isn’t always smooth.

“I’ve heard about some states where early on [regulators] were giving a limited number of licenses and [those operators] had to have labor peace agreements,” said Bergman. “If that [didn’t happen], there was a push to have those operators removed from their licenses.”

Labor peace agreements are designed to keep the cogs of essential businesses turning, with cannabis considered essential in this case because of the volume of tax revenue the industry generates. Typically, the agreements require unions to give up their right to picket, strike, or otherwise interfere with normal operations. In return, employers agree not to lock out union organizers, malign unions, or attempt to dissuade employees from unionizing.

So how do cultivators, manufacturers, and retailers feel about unionization in general?

“It’s a mix,” said Bergman, who has worked with entities on both sides of labor disputes. “There are some operators that are very in favor of it. Some major operators have recently been in the news for embracing unionization, but I’ve seen a large variety of opinions.”

Workers are inclined to support unionization. A 2022 Gallup poll showed approval of labor unions is at its highest since the 1950s at 71 percent, despite a decline in membership.

According to Glimco, the Teamsters have been organizing in the cannabis industry for the past two years.

“Sometimes the union approaches the workers; other times the workers reach out to the Teamsters,” he said. “Ultimately, though, it’s always the workers who decide to organize their union, regardless of which party initiates the conversation.”

He added the most important goal for his jurisdiction, regardless of the industry, is to negotiate strong contracts for the members the union represents. Contracts must include good wages, protection against unjust retaliation, fair scheduling policies, and realistic healthcare benefits.

“The Teamsters are continuing to organize in Illinois while also expanding into other states as more and more of them implement regulations for recreational markets,” said Glimco. “The number one priority in this industry, for both the local union and the international, both short-term and long-term, is to ensure cannabis workers have prosperous, stable, middle-class careers. If you want to get a job in cannabis when you turn twenty-one and retire from the same company forty years later, you should be able to do that.”

Whether unionization will help or hinder cannabis as an industry is an issue for business owners today, many of whom are wary of the impact organized labor could have on an industry burdened with steep licensing fees, high taxes, and razor-thin margins.

What can’t be avoided is the acknowledgment that workers and owners will always need to find a middle ground that’s best achieved through sincere negotiations, uncomfortable conversations, and more than a modicum of compromise. The industry can achieve long-term success only when everyone from trimmers and budtenders to owners and investors is able to enjoy a worthwhile return on the time, energy, and money it takes to nurture a tiny seed into the multi-billion dollar endeavor the industry has become. (Full Story)

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