Conflicts caused by Marijuana Labor Peace Agreement in the Legal Cannabis Industry

December/19/2019

In the marijuana industry, companies have agreed to sign a labor peace agreement unionizing their employees while others have resisted entering the said contract. 

Companies that have signed the labor attest that it is good for business. However, conflicts between companies that did sign labor peace agreements with labor organizers are evident from the recently filed complaints by unions and federal labor officials. 

The federal National Labor Relations Board (NLRB) has received labor complaints within the past few months form labor unions against multi-state marijuana businesses such as Curaleaf, Cresco Labs, and Green Thumb. The companies are accused of making coercive statements and refusing to bargain, which could be a result of not understanding the strict workplace rules that could be triggered by the labor peace language by the accused companies. 

In the U.S, some areas have traditional strong labor unions such as the East Coast and some parts of California and the Midwest. Marijuana experts warn cannabis companies from these areas to expect more unionization efforts in the coming future. 

Entering into labor peace agreements can help companies in the recruitment and retailing of skilled employees. It may also help the union in their political endeavors. 

However, labor deals can also lead to increased employee costs and reduced flexibility in terms of operations. Labor peace agreements are hard to adopt for companies, especially those located in California since most of them are straining financially due to tax increases. 

Some of the recent labor peace agreements formed within the marijuana industry include: 

  • In California, they enacted a law requiring all marijuana companies with more than 20 workers to provide a rubberstamped statement saying that they will adhere to the terms of the peace agreement. The employees are required to maintain neutrality with union work. 
  • In New York, labor peace agreements are included in the medical law and were also included in the recreational legislation at the beginning of 2019. Recently, the United Food and Commercial Workers International Union (UFCW) urged Northeast governors to add labor peace deals in their regional adult-use marijuana framework. 
  • UFCW initiated labor peace deals with Vireo Health in Pennsylvania and Sira Natural in Massachusetts. UFCW’s efforts towards unionizing marijuana workers started in 2013, and back then, the organization was referred to as the Cannabis Workers Rising. 

Vireo Health is based in Minneapolis, and it has signed a vertically integrated labor peace agreement. The chief strategy officer in Vireo Health, Ari Hoffnung, said that signing the labor peace deal was the right thing for the business and the employees as it ensures that the workers have access to a competitive salary and health insurance. He also noted that through unions, they could recruit and retain skilled personnel. The company has also signed labor deals in Maryland, Minnesota, and New York. 

Hoffnung further said that labor agreements are the start of a new marijuana industry where employees are given wages and benefits capable of maintaining their families. 

Hoffnung also noted that Vireo usually faces disagreement from their employees, and it is up to the company and the employees to work through the conflict. The company was against unionization of the Warehouse Production Sales and Allied Service Employees, and after the complaint was filed and voted on, the employees won by 16-0. 

Tanja Thompson offers advice for companies to be cautious when entering into labor peace agreements. She said that some marijuana businesses make themselves vulnerable to labor unions by giving them more access to their company than its necessary in their eagerness to join the booming industry. Some agreements allow unions to access employer facilities, organize a meeting with employees, and access to employee’s personal information in and out of the workplace. Some of the labor deals require companies to be neutral with their employees about unions, which could be detrimental to the workers if a union misrepresents itself by making promises that it cannot deliver to the employees, and this could lead to employees strike.

Thompson further said that unionization of employees and collective bargaining contracts often limit companies from making any amendments to the terms and conditions of employment. And this could be challenging for new businesses looking to expand. 

During an MJBizCon session, the executive director of the California Cannabis Industry Association, Lindsay Robinson, said that currently, marijuana businesses are going through a period of financial instability, and it is hard for them to adhere to all regulatory stipulations, especially the states strict labor peace policy.