The Cannabis Industry and Labor Unions

Michelle Berger

Michelle Berger is a student at Harvard Law School.

As the market for recreational cannabis products continues to gain traction, cannabis workers across the country are unionizing. These organizing drives have brought to light the ways in which, to its workers, the cannabis industry is not all that its consumer brand would suggest. This organizing has also illustrated how unions and labor law can be powerful countervailing forces when employers do not treat their workers well.

“Emerging from the Shadows”

The cannabis industry, as one CEO described, “is emerging from the shadows.” Congress criminalized cannabis in 1970 and it remains illegal under federal law, though all but ten states have adopted approaches to cannabis that are more permissive than the federal regime. This includes 23 states that permit the sale of cannabis for recreational use, subject to state tax and licensing regimes. As the CEO’s words suggest, the cannabis industry is in a transitional phase. And while the industry promotes itself as progressive and cool, its workers often have a different experience.

There are three sectors of the cannabis industry. First, agricultural workers grow cannabis; then, processing workers turn raw cannabis into products for sale; finally, retail workers sell the products at dispensaries. All three sectors can be challenging places to work. The cannabis cultivation sector, for starters, involves the sort of commercial agricultural work that is notoriously dangerous, demanding, and low paying in the United States. And the processing of cannabis material, too, can place workers at grave risk. In one case, constant exposure to air filled with cannabis dust caused a woman to develop asthma within months of working at a cannabis cultivation and processing facility. Tragically, in January of 2022, the 27-year-old woman suffered a fatal heart attack at her workstation because of an asthma attack.

The retail segment of the industry is also earning a bad reputation among some workers. Many “budtenders” (cannabis salesclerks) report encountering disorganized management, unpredictable scheduling, and toxic or even abusive bosses. As the aforementioned cannabis CEO acknowledged, the industry “doesn’t necessarily have a good track record of treating employees very well.” In a striking illustration of the disillusionment that many workers feel, 55 percent of budtenders leave their dispensary jobs within 12 months. 

Labor unions are emerging as a solution. The United Food and Commercial Workers (UFCW) has been particularly active in organizing cannabis workers. According to the union, they have organized tens of thousands of cannabis workers as part of their Cannabis Workers Rising campaign.

The Cannabis Industry and Labor Law

Cannabis workers across the United States have a patchwork of labor law protections. First, workers who grow cannabis fall under the NLRA’s “agricultural worker” exception, so the NLRA does not apply to them. The same is sometimes true for workers who process cannabis, because the test to determine whether workers are “agricultural workers” is fact-intensive––and due to shifting political headwinds, the NLRB has not been consistent in deciding how to apply it. As a result, many cannabis workers organize under state labor law regimes. In some states, these regimes may be favorable to workers. For example, unlike the NLRA, state labor laws can require or encourage business to adopt labor peace agreements (LPAs) with unions. Under the terms of an LPA, employers typically agree to make it easier for workers to organize in exchange for unions’ promise not to engage in work stoppages. At least six states include LPA provisions in their cannabis licensing laws. 

Applying labor law to the third cannabis industry sector, retail, is complex as well. Because cannabis remains illegal at the federal level, companies cannot transport it across state lines. All cannabis products sold in a state must be grown, packaged, and delivered intrastate. Since the National Labor Relations Act is Commerce Clause legislation, to assert jurisdiction over a matter the NLRB must establish that the employer in question affects interstate commerce. As a result, when states first began to legalize cannabis, it was not clear whether union organizing in the cannabis industry would fall within the jurisdiction of the NLRB.

Then, in an advice memo in 2013, the NLRB General Counsel concluded that the Board could assert jurisdiction over a cannabis dispensary. In the advice memo, the General Counsel reasoned that a large labor dispute within the cannabis industry, even if confined to a single state, could affect interstate commerce and regulations. The General Counsel also noted that the retailer purchased equipment and supplies from out-of-state. Since the 2013 memo, the NLRB has adopted the General Counsel’s position and has consistently adjudicated labor disputes arising at dispensaries.

For cannabis retail workers everywhere in the country, the 2013 memo secured critical union-related rights––though at the cost of preempting state laws that, as noted, can be favorable to workers in some states. The bottom line, though, is that dispensaries must comply with the NLRA. And as workers nationwide have exercised their rights under the NLRA, some dispensaries have revealed an inclination toward violating the law.

Unions, Dispensaries, and Cemex

In September, an NLRB Administrative Law Judge found that a cannabis dispensary in Massachusetts caused “irreparabl[e] harm” to their employees’ organizing effort. As Swap reported elsewhere on the OnLabor blog, after workers presented the dispensary with a letter declaring the workers’ intention to form a union, the employers engaged in illegal efforts to crush the union––including by discharging and disciplining lead organizers, impliedly promising benefits to workers if they would refrain from joining the union, and prohibiting employees from talking about the union at work. This sort of conduct makes it impossible for a fair union election to take place. Fortunately, the NLRB decided three months ago in Cemex that, when employers commit such egregious unfair labor practices during the lead-up to a union election, the NLRB will order them to recognize and bargain with the union, election results notwithstanding.

The cannabis dispensary in Massachusetts became the first workplace to receive a Cemex bargaining order. Then, two weeks later, a different ALJ issued another Cemex bargaining order. The workplace? Another cannabis dispensary.

Hopefully, these two decisions are a sign that unions––and the state and federal agencies that secure workers’ rights––will rise to the challenge of ensuring that the emerging cannabis industry provides fair, safe, and secure jobs to all of its workers.

Michelle Berger interned for the National Labor Relations Board from January until April of 2023, during which time the Board conducted a hearing in the aforementioned case involving the Massachusetts dispensary.  Any views expressed in this post are her views alone and not those of the National Labor Relations Board or the United States Government.

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