United Weed Stand: Managing the Growing Presence of Unions

In September, an administrative court ordered a Massachusetts dispensary operator to bargain with a labor union. Employees of the Insa dispensary in Salem voted 17-11 against joining the United Food and Commercial Workers Union, which filed a complaint challenging the results with the National Labor Relations Board (NLRB). According to NLRB Administrative Law Judge Andrew Gollin’s decision, Insa fired union supporters to send a message that other employees could face the same fate if they voted to unionize, which made the chance of a fair vote unlikely.

Gollin was the first judge to apply a recent 3-1 decision by the NLRB in Cemex Construction Materials Pacific LLC that paved the way for workers to unionize without formal elections, establishing a new framework for union representation proceedings.

“Under the new framework, when a union requests recognition on the basis that a majority of employees in an appropriate bargaining unit have designated the union as their representative, an employer must either recognize and bargain with the union or promptly file an RM petition seeking an election,” the guideline states. “However, if an employer who seeks an election commits any unfair labor practice that would require setting aside the election, the petition will be dismissed, and—rather than re-running the election—the [NLRB] will order the employer to recognize and bargain with the union.”

The increasing presence of labor unions in cannabis, from farms to dispensaries, is unsurprising given the industry’s rapid expansion. Nationwide, cannabis businesses now employ nearly half a million workers, and unions—for good or ill—want a piece of that action. If 30 percent of a company’s employees sign cards or a petition stating their intention to unionize, the NLRB will conduct an election. Once a union has been certified, employers must bargain with a union representative to determine the conditions under which employees will work.

Beyond the NLRB’s general guidelines, compliance with the terms of a labor peace agreement is a condition of cannabis licensure in some states. Beginning July 1, 2024, a licensed cannabis business with 10 or more employees in California will need to have a labor peace agreement in place before renewing its license. In New York, the Marijuana Regulation and Taxation Act requires cannabis license applicants to enter into a labor peace agreement with a legitimate labor organization regardless of the number of workers.

To help business owners avoid pitfalls in a potentially difficult process, Zuber Lawler, a law firm with eight offices in seven states, hosted an in-depth webinar with Jason Desentz, human capital managing partner at cannabis recruiting agency FlowerHire; Beatrice Runyan, associate vice president of human resources compliance at Vensure Employer Solutions; and Michael Carlin, associate at Zuber Lawler.

Cash, communication, and career

“The top three things whenever you do an [employee] engagement survey that tend to come out: One is compensation, two is leadership communication, followed by career development of the individual,” said Desentz. “As you break that down, compensation means are they fairly paid for [their] work? Companies really need to spend the time to create a compensation plan that complements the work and will not only retain your current employees, but also entice others to come over.”

Leadership communication is about more than sending regular emails; it sets the tone for everything a business does. A leader who communicates effectively can inspire positive, company-wide change by empowering employees to work toward common goals. Good leaders understand the value in communicating often and in ways that make employees feel heard.

According to a report by the Economist Intelligence Unit, poor workplace communication leads to incomplete or delayed projects, low morale, missed performance goals, and lost sales. A separate study on the cost of poor communications found that inadequate communication costs large companies an average of $64.2 million with smaller companies losing $420,000 each year.

“That’s where cultures are made, when leaders interact with all levels of the employee base,” Desentz said. “There are many different ways to do that, either with a town hall or simply just walking around.”

His final point, career development, often is mentioned in job descriptions but rarely formally implemented, Desentz said. He advised companies to adopt a formalized roadmap for career growth. Doing so can increase employee satisfaction, he said.

Workplace Safety

The earliest unionizing efforts in the 1800s found support among manufacturing workers concerned about safety on the job and today, the situation is no different. In 2022, a worker at Trulieve Inc.’s Holyoke, Massachusetts, processing factory died following exposure to “occupational quantities of whole and ground cannabis,” according to the Occupational Safety and Health Administration. Events like these are the reason Runyan said compliance with workplace safety rules is crucial.

“You want to make sure that you are staying up to date with any local or national [safety] regulations that are related to the cannabis industry,” she said. “You’ll also want to do a risk assessment to see where there are areas that might be potential hazards.”

According to Runyan, it’s not enough merely to have safety regulations in place. Employers must make sure everyone at the organization—especially new hires—is aware of the rules and implements them. A regular review of rules and regulations is a good idea to ensure everyone from leadership to entry-level workers in manufacturing and procurement understands each workplace safety measure, why it’s required, and how to maintain compliance.

Be aware of misrepresentation

It’s important to make sure employees are working with a valid union.

“Some well-established unions have started challenging the validity of some of the [newer unions] that have gained popularity with cannabis management in California,” said Carlin. “One such union is the Professional Technical Union, Local 33, also called ProTech 33. The Teamsters Union filed a complaint with the California Agricultural Relations Board in March of this year, alleging ProTech 33 was not a genuine labor organization. It is important that management is aware that there are unions that may not be qualified to have labor peace agreements that would [satisfy California] law.”

Writing for mg Magazine in January 2022, human-resources professional Liesl Bernard and attorneys Christopher and Todd A. Lyon defined labor peace agreements (LPAs) as “an understanding between a union and an employer requiring both sides to relinquish specific rights under federal law. Under an LPA, an employer must agree not to challenge any union organizing efforts. Some LPAs may also require employers to remain neutral, give the union access to their facility, and even schedule a meeting to introduce the union. Conversely, union members cannot undertake activities that induce economic interference, including work stoppages and boycotts.”

After an investigation into the ProTech 33 allegations, the labor relations board agreed with the Teamsters, finding ProTech 33 “was in fact not bona fide under the state’s labor peace agreement requirements for licensure” because it had few or no members and did not intend to organize cannabis workers. The state’s Department of Cannabis Control subsequently declared all agreements with ProTech 33 null and void, leaving at least a dozen companies with their licenses in jeopardy because they suddenly had no viable LPA in place.

Happy workers work better

The panel also suggested employee bonuses and incentive programs can help create a happy and safe workplace. Bonuses may be monetary or take alternative forms like tickets to concerts or other experiences. In challenging economic times, genuine workplace recognition can go a long way in creating a positive work culture that makes employees feel valued.

“I put my employees’ birthdays on my calendar and send them a simple email in the morning saying ‘I hope you have a great day of celebration with your family. Happy birthday,’” said Desentz. “[It’s] that simple.”

The Webinar may be found here in its entirety.