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How labor unions can benefit cannabis operators


(This story is part of the cover package in the September issue of  MJBizMagazine.)

Conventional wisdom contends that businesses and labor unions are naturally adversarial. But it doesn’t have to be that way.

Companies that find ways to work well with unions can thrive, while those that don’t might lose money because of lawsuits or labor strikes and suffer the indignity of embarrassing headlines that hurt their brand reputation.

Business and union interests are more often in agreement than they are in opposition, according to many executives and union leaders.

“Happy, healthy, productive teams perform well and create an environment where customers want to come back. Our greatest asset is our team, because if the team is happy and performing well, customers want to come back,” said Lauren Carpenter, CEO of Embarc, a California cannabis retail chain that signed contracts with the United Food and Commercial Workers International Union at two of its stores and soon expects to have the UFCW at a third.

Two mainstream unions have been actively organizing marijuana-sector workers:

  • The UFCW, which claims to have organized “tens of thousands” of retail employees, delivery drivers and growers and trimmers nationwide.
  • The International Brotherhood of Teamsters, which has signed up roughly 1,000 workers in California, Illinois and other states.

Matt McQuaid, communications project manager for the Teamsters, said the union represents workers “in all aspects of the cannabis industry – cultivation, distribution and retail.”

Companies with unions include Ascend Wellness Holdings, Cresco Labs, Grassdoor, Green Thumb Industries, Nabis, PharmaCann, Verano Holdings “and a few others,” McQuaid said.

Jim Araby, the UFCW’s director of strategic campaigns, agrees that businesses and unions have common fundamental goals.

He said the UFCW and its unionized business partners work together on developing training programs, retirement benefits and better health and safety environments.

They also help companies expand.

“The best way you can be a good union leader is to understand the business better than the people that are in it,” Araby said.

He noted that despite its flaws, the regulated marijuana market is better for workers than the illicit market.

In an unregulated market, Araby said, it’s a lot easier to get away with wage theft, human trafficking, abusive work conditions and the like. Regulated markets, meanwhile, have rules that protect workers, he added.

“The union wants the California cannabis industry and businesses to succeed,” Araby said.

 Experience and expertise

Carpenter said she was interested in working with the UFCW for a few reasons.

For one, she felt the union offered expertise and resources in areas such as conflict resolution and labor law.

“The biggest was a desire to have a partner that was sitting at the table with our workers. … Our employees can come to us, but we’re still in the infancy of the legal market, and from my perspective, it’s important to have as many adults at the table as possible as we continue to refine and innovate,” Carpenter said.

“We as an industry and as individual businesses are creating labor standards right now. Those are store by store, jurisdiction by jurisdiction, because every community looks different.

“I welcome access to an organization that has spent decades advocating for workers and learning through their experience as we navigate an industry that is still new.”

Lobbying for organized labor

In California and several other states with regulated cannabis markets, unions were involved in marijuana-legalization movements and often sat at the table with business leaders, legislators and regulators as they hammered out rules.

“As a result, (the union) played a large role or has a strong fingerprint on the structure” by which companies can operate in the state, Carpenter said.

“Understanding that process was critical to understanding how we wanted to approach partnerships with the union. Labor unions are quite powerful in this state.”

Because unions were at the rule-making table during many legalization efforts, they succeeded in getting lawmakers in several states and local jurisdictions to require businesses to sign so-called labor peace agreements (LPAs), which give unions the right to talk with employees about joining a union without interference.

States with LPA requirements include California, New Jersey, New York, Rhode Island and Virginia; Illinois and Pennsylvania don’t require LPAs, but they do give extra points to marijuana license applicants that sign them.

Many industry observers expect this trend to continue, meaning that cannabis workers will continue to unionize.

Given the weight that unions already have in the marijuana industry, businesses should consider ways they can get the most out of a business-union relationship.

For example, unions can help cannabis businesses:

  • Improve regulations.
  • Break into new markets.
  • Resolve disputes with employees.
  • Train workers.

“We can weigh in with the full force of our lobbying policy, our political power, to focus on certain areas of the regulations that we think we need to happen,” Araby said.

 Benefits of union membership

Unions’ expertise and clout in many parts of the country mean they can effectively lobby for or against regulations affecting the cannabis industry.

For example, the UFCW worked with Stiiizy, a unionized vape cartridge maker in California, to help overturn a vape ban passed in Contra Costa County, Araby said.

Unions also can put in a good word with government officials in municipalities where marijuana companies are trying to get licensed.

“We try to help these companies grow into other markets – especially if they are going to be a pro-labor company. … When they want to move into a new town, we lobby for them because they have a collective-bargaining agreement,” Araby said.

Because many jurisdictions in California have merit-based application processes, it’s helpful to have an ally such as a union that is willing to advocate on your behalf, Araby said.

Carpenter agreed that the union can be a helpful advocate as her company seeks to expand and establish better industry rules.

“One of the biggest focus areas for the union is advocating for companies who want to partner with the union to work toward meaningful worker standards and the creation of things like apprenticeship programs,” she said.

 Navigating disputes with workers

Carpenter said the UFCW also has been helpful in resolving disputes with employees.

“Things come up, and more than anything, the fact that they’ve been through nearly every (kind of labor issue) is the piece that is most beneficial to me. They facilitate conversations to help us be better as employers and as a business.”

For example, one of Carpenter’s employees had a tardiness problem.

The worker was habitually late a few times per week, affecting other employees who had to cover for their tardiness, Carpenter said.

After a few unsuccessful attempts to get the employee to come to work on time, Carpenter brought in a union representative to moderate a discussion between the employee and business leaders about how to fix the problem.

The employee changed their behavior and is still employed with Embarc today.

The union’s role is nuanced, Carpenter said.

“I really view them as the employee advocate. But I think a lot of times that isn’t in conflict with us as the employer. The best outcome for that employee is also the best outcome for us, which is an employee performing to a level where they are successful and that the remainder of our team can be successful,” Carpenter said.

Standards and safety

Unions also can help businesses access and create worker development, training and apprenticeship programs, since they have resources and expertise with such initiatives, Araby said.

“We talk frequently about worker standards, apprenticeship programs and how to emphasize the importance of those things as local jurisdictions contemplate what commercial cannabis is going to look like in their community,” Carpenter said.

“Myself and our regulatory affairs team are working hand in hand with the UFCW on statewide initiatives, such as worker standards and apprenticeship programs, which I think are going to ultimately be really critical to the future of our industry,” Carpenter said.

Ultimately, cannabis executives need to ask whether they want to spend their capital on their company and workers or consultants telling them how to avoid unions, Araby said.

“These conflicts disrupt your business, your employees. And you must ask: Is it worth it?” he said.

Omar Sacirbey can be reached at omar.sacirbey@mjbizdaily.com.



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