California Cannabis Union Scandal

Despite the current federal prohibition on cannabis that will likely stretch well into the 2020’s, the cannabis industry is becoming economically stronger and more normalized with every passing year. Whether that be the increasing size of cannabis-related conventions such as MJBizCon and NECANN or the fact that over 415,000 people are employed in cannabis, the American cannabis industry becomes more on par with any other multi-billion dollar industry every time a state legalizes either recreationally or medically. An otherwise flourishing industry that seemed like a pipe dream two decades ago, a true green rush is occurring over this industry’s products and possibilities.

One vastly important way that the cannabis industry and operations are becoming more normalized is with the advent of cannabis worker unions. From nurses and distribution center employees to multiple unions for different types of construction, labor unions are very prevalent in American labor. Whereas nearly every industry has a labor union that ranges greatly in size and scope as well as outcome of action for their members but has been around for decades nonetheless, cannabis employee unions are relatively new.

Given that it’s arguably the most socially progressive state in the country, California has required cannabis businesses to sign a “labor peace agreement” with a “bona fide” labor organization before they can receive licensing. However, in the fast quest to unionize, California cannabis operators and regulators may have not done enough due diligence in which cannabis unions they were signing required labor agreements with.

Just this past July, International Brotherhood of Teamsters filed a complaint with the Agricultural Labor Relations Board alleging that the National Agricultural Workers Union was in fact an illegitimate organization masquerading as a labor union. One of the companies that signed an LPA with the NAWU was the brand Caliva which is owned by The Parent Co, a conglomerate with hip-hop mogul Jay Z as one of their famous investors. Through Department of Labor records, it was revealed that the NAWU takes in zero dollars in union fees and had only one registered member who was a disbarred attorney in Bakersfield. Unfortunately for California cannabis businesses, this incident involving Caliva and NAWU was far from an isolated incident.

As it has been discovered recently, at least ten of the “labor unions” that cannabis companies in California signed labor peace agreements with have been flagged as suspicious or outright fraudulent by the California Department of Cannabis Control. These agreements were signed with companies far beyond small local grows, such as Unrivaled Brands. Given the many local chapters and related organizations of some of these larger unions, many organizations sound legitimate on paper yet aren’t directly related to any of the organizations that claim to.

In total, MJ Biz Daily reported that 83 different retail, distribution or manufacturing licenses were associated with these mysterious and likely fraudulent labor unions. Initially, these unions can be hard to detect because their names sound relevant and somewhat enough related to cannabis. Two of the organizations under scrutiny have cannabis directly in their name, those being Cannabis Engineers Extractors & Distributors (CEED) and Union of Craft Cannabis Professionals, while the aforementioned NAWU is another one being looked into further. The Truck Drivers, Chauffeurs, Warehousemen and Helpers Local 707 and the Industrial Professional and Technical Workers were also listed. Although, the Professional Technical Union Local 33 had by a strong majority the most LPA’s at a total of 35 agreements signed.

The qualifications, of lack thereof, that a supposed labor union could be considered illegitimate because of would be no required U.S. Department of Labor filings, such as how CEED and four of three more of the ten organizations being scrutinized didn’t have those forms filed. And to their credit, the larger unions in America are taking action against these fraudulent labor unions that act more similar to the infamous Bishop Sycamore High School as opposed to a legitimate organization to better the working conditions and livelihoods of non-management employees.

The California office of the International Brotherhood of Teamsters has filed two formal complaints with the Agricultural Labor Relations Board which alleges that the NAWU is not a bona-fide labor organization that is compliant with the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) and orders a response from NAWU and those who have signed licenses with the allegedly fake organization as well as requesting that evidence be presented which would supposedly prove the NAWU’s status as a legitimate labor organization. In related news, United Food and Commercial Workers Local 5 will soon be taking action against some of the other suspicious organizations.

As the cannabis industry continues to expand as exponentially as it has been in recent years and unionization inevitably becomes commonplace, cannabis companies will need to do further due diligence in who they sign labor agreements with. If fraudulent or unethical behavior is suspected to be occurring, the Department of Labor has resources where these claims can be researched and investigated further.

Aaron Pelley

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