Don’t Like Unions, Make a Fake One Up! – California Cannabis Companies Create Fake Unions to Cut Labor Costs

July 20, 2023 · Cannabis.net

According to state regulators on Monday, a dozen cannabis businesses in California, including the collapsed distribution giant Herbl, are facing the possibility of license revocation. As first reported by MJ BIZ, these businesses had previously signed agreements with a labor union that has now been deemed illegitimate.

Under California law, marijuana businesses must enter into a labor peace agreement with a legitimate and “bona fide” labor organization to obtain a state license. However, critics argue that some cannabis businesses nationwide are circumventing worker-friendly marijuana legalization laws and pursuing labor cost savings by signing agreements with so-called “labor organizations” that lack significant membership and display no intention to organize workers.

This practice has raised concerns about the integrity of labor relations within the industry and has led to heightened scrutiny from regulatory bodies. By signing agreements with illegitimate labor organizations, these businesses potentially undermine the rights and protections of workers while seeking to benefit from reduced labor costs.

State regulators in California are now evaluating the compliance of these businesses with licensure requirements. They are considering revoking licenses for those found to have engaged with illegitimate labor organizations. This development underscores the importance of upholding fair labor practices and ensuring that businesses adhere to the spirit and intent of worker-friendly legislation in the cannabis industry.

Alleged Fake Union ProTech Faces ALRB Ruling, Putting California Cannabis Companies’ Licenses at Risk

California’s Agricultural Labor Relations Board (ALRB) made a significant ruling on July 6, declaring that an organization known as the Professional Technical Union Local 33, also referred to as ProTech, is not a legitimate labor organization. The ALRB emphasized that a bona fide labor organization must sincerely intend to represent and organize employees as a collective bargaining unit. In contrast, ProTech, characterized as an “employer-sponsored” group, failed to respond to basic inquiries and provide essential information about its membership and organization, raising suspicions of impropriety.

The ALRB issued its decision in response to a complaint filed by the International Brotherhood of Teamsters, an established union actively participating in cannabis sector organizing. As a result of the verdict, the California Department of Cannabis Control (DCC) issued a notice informing state marijuana firms that any labor peace agreements signed with ProTech are null and void. Licensees that have signed agreements with ProTech will be notified that they are not in compliance with the state’s licensing standards.

According to a spokesperson from the DCC, 12 companies have signed labor peace agreements with ProTech. However, a public records request made on May 16 to obtain the labor peace agreements is still pending as of the latest update. The situation raises concerns about the potential consequences for the licenses of California cannabis businesses associated with ProTech, as they now face the risk of losing their licenses due to the organization being deemed illegitimate by the ALRB.

Herbl and Other California Cannabis Businesses Face License Concerns as ALRB Rules ProTech’s Labor Organization Illegitimate

ALRB’s ruling highlighted that Joe Senese, the president of ProTech, claimed that his organization had signed between “20 and 100” labor peace agreements with cannabis businesses in California. Notably, Herbl, a prominent cannabis distributor, is among the companies that entered into a labor peace agreement with ProTech. Still, it recently experienced financial difficulties and fell into receivership, as reported.

In an emailed statement, Peter Finn, the Teamsters’ Western Region vice president, expressed his support for the ALRB’s decision. Finn emphasized that simply signing a labor peace agreement is insufficient; the key lies in workers forming a genuine union and engaging in negotiations for a robust Teamster contract that can bring tangible improvements to workers’ lives. The Teamsters have been actively using strikes and other tactics to gain concessions from management in recent times.

For instance, in April, workers organized by the Teamsters at three Rise stores owned by Green Thumb Industries in the Chicago area staged a 13-day strike after contract negotiations reached an impasse. Last month, the union filed complaints regarding unfair labor practices against the company with the National Labor Relations Board. These actions demonstrate the Teamsters’ strong determination to advocate for workers’ rights and achieve better conditions through collective bargaining.

California Cannabis Businesses Face Potential Consequences

As the Agricultural Labor Relations Board (ALRB) ruling deeming the Professional Technical Union Local 33 (ProTech) as illegitimate shakes the California cannabis industry, license compliance concerns are mounting for affected businesses. The California Department of Cannabis Control (DCC) has issued a bulletin notifying marijuana businesses that any labor peace agreements entered into with ProTech are null and void.

Licensees who have signed such agreements with ProTech will receive notifications indicating their non-compliance with licensure requirements. This development puts these cannabis businesses at risk of losing their licenses, a significant blow to their operations and prospects.

Among the companies affected is Herbl, a major cannabis distributor that recently fell into receivership, compounding its challenges. With Herbl and others being tied to labor peace agreements with ProTech, the outcome of their licenses hangs in the balance.

This situation highlights the importance of due diligence and verifying the legitimacy of labor organizations before entering into agreements. The ALRB’s ruling serves as a wake-up call for the industry, emphasizing the need for businesses to ensure compliance with labor laws and align themselves with bona fide labor organizations.

Moving forward, affected businesses will likely face increased scrutiny, and steps may be taken to rectify the situation. The DCC and other regulatory bodies will closely monitor compliance with licensure requirements, further underscoring the significance of maintaining transparent and legitimate labor practices within the cannabis industry.

This issue’s outcome will shape these businesses’ future and contribute to the broader dialogue on labor rights and fair practices within the rapidly evolving cannabis sector.

Bottom Line

The recent ruling by the Agricultural labor Relations Board (ALRB) deeming the Professional Technical Union Local 33 (ProTech) illegitimate has raised license compliance concerns for a dozen cannabis businesses in California, including Herbl. These businesses now face the risk of license revocation as they signed agreements with a labor organization accused of lacking legitimacy and intent to represent workers. This development highlights the need for businesses to adhere to labor laws, verify the authenticity of labor organizations, and prioritize genuine union representation. It also sparks a broader conversation about labor rights and fair practices in the ever-evolving cannabis industry, urging greater transparency and adherence to regulations to ensure the protection and well-being of workers. (Full Story)

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