Can Unions Stop Cannabis Monopolies?

Cannabis legalization has created big companies that monopolize the industry and bust unions. What can cannabis workers do to fight them?

At a time where “essential laborers” have been forced to work in a deadly pandemic, the challenges an organized workforce face are more sinister than ever before. One growing group of workers facing hurdles to workplace organizing is cannabis workers. Since the 2010s, cannabis has been on the forefront of legalization, creating an entirely new market of workers, who until the expansion of legalization, were targeted members of an “underground society.” Excessive regulation of the substance by the federal government has resulted in an automatic monopoly in the emerging industry, which threatens to reinforce the already strong tendency to political and economic inequality in this country.

Unions like the United Food and Commercial Workers Union (UFCW), the International Brotherhood of Teamsters (IBT), and the Service Employees International Union (SEIU) are joining the ranks looking to represent these workers. And cannabis workers are banding together quickly, filing for elections in at least 23 states. In Illinois, where I live and work, 30 union elections have been filed since recreational legalization in 2020, with an 88% win rate. Workers are demanding things like more pay, paid time off, and better facilities.

The companies who have monopolized the industry are called multi-state operators (MSOs). The “original” legalized states like Colorado, Washington, and California have regulated cannabis sales, but also have easy paths for obtaining licenses to open dispensaries. However, the “new wave” of legalization in the Midwest and East Coast has come with significant roadblocks. Illinois, Florida, New York, and Ohio all have difficult and expensive paths to gain a limited number of cannabis licenses. Even if independently-owned cannabis companies are the first to obtain these licenses, many are pressured by big corporations to sell them. By gobbling up other distributors, these companies can increase revenue rapidly without doing the leg-work of setting up the locations. MJBizDaily reports on the multimillion dollar earnings these companies make per quarter, citing Curaleaf Holdings, Trulieve Cannabis, Green Thumb Industries, Verano Holdings, and Cresco Labs, among others, as the largest companies in the industry. These states’ legalization has come from state legislation, not from ballot initiatives. This means that politicians who ran on pro-cannabis campaigns have sealed deals with these company owners to make licensing more accessible to them.

Do Cannabis Workers Have the Legal Right to Organize?

With the emergence of this new semi-legal industry, the protections surrounding these workers are murky. The National Labor Relations Act (NLRA) was passed by Congress in 1935 to encourage and protect workers’ freedom of association and right to collective bargaining. This means that employees have the right to join together to improve their wages and working conditions. The institution meant to protect this freedom is the National Labor Relations Board (NLRB), an independent federal agency.  However, the NLRB has not given confident responses that they are willing to protect an industry that is still federally illegal. When the Wellness Connection of Maine, a cannabis cultivation site, fired two employees for unionizing in 2014, the NLRA found that the company did nothing wrong, since agricultural workers do not have the right to form a union. At that time, the company and their cultivation centers served three-fourths of the medicinal market in the state.

Although many cannabis workers are voting to join unions, the uninhibited power of these billion dollar companies stop serious changes from being made. MSOs are union busting in their locations and are stalling elections and negotiations. Unions and the NLRB are scrambling to keep up with the rigged system large corporations have created. Alarmingly, the opposition of these giant companies reveals that unionizing in the US is a rigged game.

An Unfair Labor Practice (ULP) is when a company attempts to interfere with or stop employees from enacting their right to organize their workplace and to be represented by a union.

Although the NLRB reported a 58 percent increase in union election petitions in the year 2021,  there was a 19 percent increase in ULPs filed with the NLRB between 2021 and 2022.This is the first rise in ULP charges filed since the year 2016. According to a 2019 report by the Economic Policy Institute, employers violate federal law by engaging in union busting in 41.5 percent of all union election campaigns.  The report also found that $340 million is annually spent on “union avoidance” consultants, or attorneys and labor specialists that strategize ways to break unionizing efforts. The US Labor Lab warns that one of the most common and successful union busting techniques is to delay the process in order to create feelings of futility among the workforce.

A case that exemplifies this tactic is the Windy City Weed Street Dispensary in Chicago. The formally independently owned company was purchased by Curaleaf in 2020. The workers at Windy City Weed Street organized and held a union election in March 2021, where the worksite successfully voted in favor of joining the United Food and Commercial Workers Union (UFCW) Local 881. Curaleaf’s legal council objected to the election, claiming that the mail-in ballot system that was implemented for COVID-19 protocols was unfair. Although the court ruled in favor of the union representation and ruled that the company’s refusal to bargain was illegal, the ruling did not come until 21 months later in December 2022.

The waiting game of unionizing can be detrimental to worker organizing efforts. Workers may not have the emotional and physical stamina to keep working under poor conditions with no legal aid. Companies are ready to exploit any opportunity available to break down organizing efforts. Headset ISO reports that the cannabis industry has one of the highest employee turnover rates, with over 55 percent of budtenders leaving their job by their first year. Of that total, 25 percent leave after their first month. That is higher than the overall turnover rate of 47 percent across all industries the US Bureau of Labor Statistics reported in 2021.

Busting Bud Unions

According to the NLRB, Curaleaf is one of the most notorious companies for union busting, having 19 charges brought against them in 5 cities. Curaleaf is the owner of brands such as Select vapes, Wana gummies, and Grassroots flower. Among these charges against Curaleaf are accusals of coercive actions like surveillance, unfair discipline, and concerted activities like retaliation and discharge in Phoenix, refusal to bargain/bad faith bargaining in Chicago, changes in terms and conditions of employment, and coercive statements such as threats and promises in Brooklyn, as well as refusal to furnish information and bad faith bargaining in Boston. Curaleaf’s revenue in the third quarter of 2022 alone was $340 million.

Though notorious, Curaleaf is in no way the only MSO to play the union busting game. Ascend Wellness, Verano, Cresco, Trulieve, Ayr Wellness, and Jushi Holdings are all listed in MJBizDaily’s report on the highest Cannabis MSO earners in third quarter of 2022, and all are found with union busting charges through the NLRB to varying degrees.

What is the cost to employers for being found guilty of committing ULPs? According to Cornell Law School’s Legal Information Institute, the main function of the NLRB is to order the company to cease and desist illegal behavior. The NLRB may order the company to compensate workers for lost wages and benefits in an attempt to “make whole” the situation. However, the NLRB restorations stop there. The NLRB cannot make violating the NLRA a crime, cannot adjudicate issues outside a six month statute of limitations, or even order a company to make concessions at the bargaining table. All in all, the NLRB deliberation acts as another way for there to be legal stalling in employer union busting. ULPs are ultimately a slap on the wrist for multi-billion dollar companies.

Delaying the unionization process not only wears out the will of workers, but allows companies ample amount of time to make serious changes across the company without union intervention. Unions only have the power to call for arbitration with companies after the terms of a union contract, or a collective bargaining agreement (CBA), is negotiated and ratified. While four Curaleaf dispensaries in Illinois have been waiting on CBAs since 2021, Curaleaf has been rolling out company wide lay-offs throughout 2022 and 2023. Meanwhile, the cannabis industry is expected to grow 13 percent in 2023, with revenues projected to grow from $17.5 billion to $41.5 billion in 2025. Despite strong growth, Curaleaf and other companies continue to fight unionizing efforts in multiple states.

How are Unions Responding?

Unions cannot react much to lay-offs or ULP charges. In fact, many unions are taking a “soft” approach to the union busting of MSOs, as many have signed Labor Peace Agreements (LPAs) with cannabis employers. These agreements are meant to prohibit union busting by also guaranteeing that unions will not strike. Six states require an LPA for cannabis businesses to operate. The Illinois Cannabis Union Project, an offshoot of SEIU, promotes ready made LPAs on their website, pointing out that the LPA will help future cannabis employers gain licensing by providing them more “points” on their application. A quote from the website reads that an employer can expect “A predictable, fair and standardized labor management relationship that resolves routine workplace concerns fairly and quickly, while helping employers avoid costly litigation and regulatory issues.”

Without NLRB backing, and an unwillingness to strike, unionizing seems to be a futile effort among workers looking to change the standards of their industry, or at least in the United States. Alternatively, in Canada, cannabis legalization has come with similar costs and has been met head on with strikes. A public sector strike recently closed most of British Columbia’s recreational cannabis shops, which hit employers where it hurt by turning the community back to the black market. How can unions strengthen their cause and push back against the monopoly of the cannabis system? The answer may lie in the structure and perspective of original labor unions that inherited the movement of the 2020s.

Some unions provide equal opportunity to all, with all organizers making similar wages and all decisions voted on by the majority, called a rank-and-file system, like that of the United Electrical Radio and Machine Workers of America (UE), nicknamed the “Union for Everyone.” However, other unions like UFCW, which has over a million members nation-wide, operates more like a company with a long list of officers and staff making over a hundred thousand dollars per year. Meanwhile, the membership they fight for like Jewel-Osco grocers make around $14 per hour.

On average, cannabis workers make around $16 per hour or $33,000 per year. For all of this, cannabis workers fight stigma surrounding their job, educate communities that have been fed misinformation about the plant, and act as government agents or pharmacy techs, following state procedure for logging and selling these regulated items. Although unions as a whole boast that their workers make an average of 27 percent more than non-union workers, many cannabis union contracts only bargain for a 6 percent increase in wages. Although this average is a significant increase for most cannabis retail workers, workers have to face the hurdles of ULPs and stagnant negotiations to get there. Likewise, union contracts do beneficially propose yearly increases, which most dispensaries do not offer, but then a cannabis worker would have to work multiple years to earn a living wage, or to have a profitable career all while MSOs make a couple million dollars per month. These MSOs also have the potential to close stores and withdraw from the market at any time.

Moreover, unions that are becoming involved in cannabis legalization should understand the cultural importance and significance of cannabis legalization. The origin of cannabis prohibition, or the War on Drugs, is one of racism and police brutality. Regular citizens were turned into criminals for growing and sharing cannabis. Labor organizing in the legal cannabis industry begs the question of how these large companies that violate labor law are less criminal than regular people looking to make a living by cultivating and sharing a plant they’ve used for their whole lives? Who deserves to profit from cannabis? Is it only the few people who’ve successfully created multi-state operators, even though they never put in the labor of those who have cultivated the culture of cannabis?

Monopoly Power

Cannabis MSOs are most successful in states where legalization has come with limited licensing guaranteeing monopolies. Moreover, these states allow individuals to “home grow” or grow their own cannabis in their homes or gardens and share their yields with others. In January 2023, Curaleaf pulled all operations out of three open market states including California, Colorado, and Oregon likely due to an inability to compete with other dispensaries. This pull back reduced the payroll of the company by 10 percent and effectively got rid of 500 employees. According to CEO Matt Darin, the illicit market compelled these moves: “We believe these states will represent opportunities in the future, but the current price compression caused by a lack of meaningful enforcement of the illicit market prevents us from generating an acceptable return on our investments.”

MSOs have been lobbying to make “home-grow” illegal. This would effectively continue the War on Drugs’ legacy of surveillance and criminalization of a plant that is less dangerous than alcohol. Cannabis MSOs like Curaleaf, Cresco Labs, and PharmaCann are all members the United States Cannabis Council, a lobbying group that has spent $337,500 so far this year on several legal campaigns like the “Intentional Federal Regulation,” which would effectively end and police home-grow. What’s more, because some union contracts and LPAs limit strikes, cannabis workers would not be able to protest against corporations making laws like this, as it could be seen as a demonstration against the employer.

Movements like “Support Your Local Weed Man” advocate for consumers to keep their money in their local community instead of handing it over to MSOs. “As the social acceptance and legalization of weed continues to drastically shift,” they argue, “we would like our apparel to serve as a message of gratitude to the men and women who have long been providing for the people. Decades before big businesses and politicians declared weed beneficial, our weed men have been answering the call to serve, risking it all! … you will not be forgotten! Salute.” Their efforts run in conjunction with with Ex-Cons for Community and Social Change (ECCSC), an Illinois-based non profit that advocates for those who have been incarcerated, calling for restorative justice practices, and resources used to stop violence at the source with a community centered attitude for achieving a better tomorrow for all.

As reported by the Last Prisoner Project, 15.7 million people have been arrested on the premise of cannabis possession in the last two decades alone. The project aims to free every last person incarcerated for these offenses and offers programs for the reintroduction of these people back into society. Like the ECCSC and SYLWM, the Last Prisoner Project offers budtending courses, and aims to help those arrested on marijuana offenses begin earning and taking place in the legal cannabis market. With cannabis legalization, money should not be on the forefront, but the emphasis should be on restoring the lives and the communities of those affected. NORML, a marijuana law reform organization, reports that twenty-three of the legalized states have enacted legislation to expunge cannabis records and offenses. Not all of the offenses qualify, and although some states have created an automatic expungement, others require the person convicted of the offense to petition for their expungement.

President Biden announced in October 2022 that his presidency plans to improve on marijuana reform, acknowledging that “no one should be in jail for just using or possessing marijuana.” The Biden administration introduced the Marijuana Opportunity Reinvestment and Expungement (MORE) Act to the House of Representatives in May 2021. And yet NORML finds that as of February 2023, none of the 6,557 convicts who qualify for expungement have received their pardons. In fact, the Application for Certificate of Pardon for Simple Possession of Marijuana is not yet available on the Justice Department’s website.

Legalize It (Union Organizing)

In her book The New Jim Crow: Mass Incarceration in the Age of Colorblindness, Michelle Alexander discusses how mass incarceration serves as a means of racial control, especially perpetrated by the War on Drugs. Mass incarceration of people of color has resulted in unpaid prison labor, the loss of the right to vote for tens of thousands, generational trauma, and family separation. Alexander writes “…nothing has contributed more to the systematic mass incarceration of people than this ongoing war.” What’s more, the War on Drugs has effectively violated Americans’ fourth amendment right to be protected against unreasonable searches and seizures. Police are given the ability to break the law, racially profile, and to upgrade police equipment to paramilitary grade weapons. In imagining the end of the War on Drugs, Alexander argues

If we hope to end this system of control, we cannot be satisfied with a handful of reforms….Federal grant money for drug enforcement must end; drug forfeiture laws must be stripped from the books; racial profiling must be eradicated; the concentration of drug busts in poor communities of color must cease; and the transfer of military equipment and aid to local law enforcement agencies waging the war must come to a screeching halt. And that’s just for starters.

Cannabis legalization comes after a long history of racism and violence. This growing group of laborers are folks who were targeted and marginalized. The role of labor unions is to protect these workers and to seek justice through adequate compensation and respect. If unions consider this history, they must consider fighting for reparations in order to make serious social change for the rights of workers. Labor Unions have fought before for reparations, especially during the formation of black-led labor unions who fought for better wages, considering the country’s foundation of building wealth on the backs of African slaves. In fact, at the Millions for Reparations March in August 2002, president of the union conglomerate AFL-CIO, Fred Mason, said that unions should fundamentally support reparations. So far, no cannabis CBA has made calls for reparations or challenged the status quo of ex-cons being barred from working in the legalized cannabis market. So far, it seems that the call for reparations has come from individual townships like Evanston, Illinois who pledged to give $10 million from marijuana sales tax to eligible residents over 10 years. True justice  would only happen if the billions of dollars handed to monopolized cannabis giants was shared with the communities harmed by the War on Drugs. Labor Unions could be the driving force to this social change, if the effort was put in to stand up to MSOs and to change the current narrative of legalization.

While cannabis unions sit by waiting for contracts to be finalized, cannabis companies are putting all their efforts into union busting. Meanwhile, real cannabis workers are being exploited. Just being unionized is not enough to make lasting change in the current political climate. Meaningful legislation needs to happen not only to fully legalize cannabis, but also to enact meaningful consequences for the companies that violate labor laws and conglomerate over industries that are meant to be shared. The NLRB should be able to bolster ULPs to seriously deter companies from committing them. The workers who risk their job to organize and imagine a different reality deserve solid labor legislation to back them up. As the wave or organizing continues, we must not forget the power of the system that inspires it.