As unionization continues to grow in the cannabis industry and beyond, a number of so-called cannabis labor organizations in California may not be operating in good faith or could be outright fraudulent, a new report reveals.
At least 10 “labor organizations” are signing required labor agreements with licensed California cannabis businesses, some high-profile, despite the fact that experts and observers have flagged them as suspicious, according to records as outlined in a new MJBizDaily report. The organizations also share characteristics with another “union” that state regulators deemed fake in July.
The new discovery points to a potentially larger problem in the California cannabis industry, namely that there could be far more fake unions than regulators and experts know of. It also raises questions surrounding the efficacy of regulators and the intentions of large cannabis businesses when it comes to employee welfare.
The problem is also not exclusive to California, as other questionable “labor organizations” are also popping up around the country — namely the East Coast.
In California, state law requires cannabis businesses to enter into and abide by labor peace agreements before they can be licensed. MJBizDaily cites that even highly recognizable brands are partnering with these fraudulent organizations “business-friendly cutouts with no history of organizing workers or negotiating contracts, either in cannabis or in any industry in California, according to state and federal records.”
Some of the companies include pre-roll and vape cartridge specialist Jeeter, retail company Unrivaled Brands, cultivator Glas House Brands and infused product maker Papa Barkely, according to state records and the report, though these businesses did not respond to request for comment. In total, there are at least 83 retail, distribution and manufacturing licenses associated with questionable unions, according to state records.
Matthew Lee, the California Department of Cannabis Control’s (DCC) general counsel, told MJBizDaily that he recognized the problem and that the agency would improve its oversight, adding that they are “actively looking at ways” to do better.
Earlier this week, the DCC posted a list of labor peace agreements (LPA), but the only avenue to expose potential fakes is for recognized labor unions or workers to discover LPAs and file complaints with state officials.
According to DCC records obtained by MJBizDaily, the questionable labor organizations include: Cannabis Engineers Extractors & Distributors (CEED), which signed one LPA with a licensee; Congress of Independent Unions, eight LPAs; Cultural Management, one LPA; Industrial Professional and Technical Workers (IPTW), three LPAs; National Agricultural Workers Union, 20 LPAs; National Production Workers Union, seven LPAs; Professional Technical and Clerical Employees Union, two LPAs; Professional Technical Union Local 33, 35 LPAs; Truck Drivers, Chauffeurs, Warehousemen and Helpers Local 707, five LPAs; and Union of Craft Cannabis Professionals, one LPA.
According to the report, those organizations all share at least some of the characteristics of a fake union as identified by Kate Bronfenbrenner, director of Labor Education Research at Cornell University. These characteristics include not required U.S. Department of Labor filings (i.e. CEED, Cultural Management, IPTW and the Union of Craft Cannabis Professionals), or when filings do exist, no reported members are working in the industry the union claims to organize, according to Bronfenbrenner.
She noted that these types of fake unions are nothing new and are often found in other U.S industries. Almost always, she added, they appear with the cooperation of the company involved, with the intention of subverting the labor movement.
It’s not entirely clear how these fake unions operate, namely how they financially benefit given that the LPAs don’t lead to perceptible union organizing activity. Some cannabis business owners say they have no reason to believe that these “unions” are fraudulent, though Jim Araby, an organizer with the Northern California-based United Food and Commercial Workers Local 5, told MJBizDaily that he believes at least a portion of cannabis businesses enter these agreements with full knowledge of what they truly are.
“Sadly, this is not unexpected in an industry that’s trying to come out from being unregulated,” he said. “We have certain people in the industry that would rather deal without any regulation at all and are doing everything they can to deal with the least amount of regulation as possible. And that includes avoiding signing legitimate labor peace agreements as required by law.”
