RESOURCES | Content | News

Startup or Scam? Bogus Cannabis Unions Not Just a California Concern
Published on November 2, 2023

Shady unions and labor peace agreements (LPA) are not just a problem for California cannabis workers.The ProTech 33-related National Production Workers Union claims that it is organizing cannabis workers in states outside of California, while the upstart Cannabis Engineers, Extractors and Distributors (CEED) Union Local 420 has announced its first successful unionizing effort in the Northeast, the United Food and Commercial Workers International's (UFCW) traditional stomping grounds. 

The UFCW has accused CEED Local 420 of being a company union, but a spokesperson with CEED claims that the UFCW is threatened by an upstart union. 

"This is an industry that's gonna grow, which is why you're seeing all these folks getting into it,” said Connor Shaw, business agent for CEED Local 420. The workers have to have a voice as the industry is growing so that they can grow with the industry. The whole pitch is to make this not just a job but a career. Access to wages are obviously important, but also access to retirement, access to health insurance. If you don't have good benefits, you're not gonna be able to stay in that job.”


CEED Local 420 was created in 2021 and is affiliated with the International Union of Journeymen and Allied Trades. Shaw said that the union is focused primarily on the northeast with current or pending LPAs in New Jersey, Connecticut, New York and Pennsylvania.

"Every state that we dealt with has different qualifications, and they have different requirements about what has to be put in the LPA. Connecticut has the most requirements, and they've got exact language in their bill that needs to be put in the LPA,” said Shaw. "It definitely makes a huge difference. The LPA does not mean that we're going to walk in and automatically be able to represent and unionize the workers there, but it does give us far more access to go in and speak to the workers. It requires the company to be neutral."

CEED Local 420 announced it had landed its first collective bargaining agreement with Ascend's retail dispensary in Montclair, N.J., in 2022. A spokesperson from New Jersey said the information is not public, while a spokesperson from Connecticut provided a list of just two UFCW locals as the only certified unions with active LPAs in the state. 

Seven cannabis producers have signed LPAs in Rhode Island according to attestations provided by the state's Department of Consumer Protection. Six of those agreements are signed with UFCW Local 328, while the seventh is with Teamsters Joint Council 10. Regulators from New York did not respond to requests for information about existing LPAs in the state.

A Pennsylvania’s Department of Health spokesperson explained that LPAs can be found in publicly available applications for cannabis operators, but they are not specifically tracked by the state. 

"A provision exists in the Commonwealth’s regulations that explains a medical marijuana operation could be cited for failing to honor a peace agreement with a union. However, the Department of Health does not track labor peace agreements from cannabis operators, nor does it have a list of unions that have signed labor peace agreements," wrote health department spokesperson Neil Ruhland in an email. 

California recently published a list of cannabis companies with signed LPAs. Most of the agreements were signed with either UFCW or International Brotherhood of Teamsters locals. But there were also agreements with 10 other unions, and two of them have been deemed non-bona fide by the Golden State. So far, California is the only state to assert a standard for a “bona fide” union.

California’s LPA list included one agreement with CEED without the “local 420” label. Despite having an almost identical name, Shaw said Local 420 was not affiliated with the supposed California union. The California version of CEED signed a single LPA with Next Green Wave, which was acquired by Nevada-based Planet 13 in 2022. Planet 13 also has licenses in Florida and Illinois that have yet to open for business. 

"I know in the beginning we had signed LPAs in a couple other states before focusing on the Northeast,” said Shaw. “My understanding is we don't have any active LPAs in California. So I'm not sure why it would be on that list."

Shaw said the more opportunities for workers to unionize the better. 

“I think competition makes everyone better. There's other organizations that don't think that they should have competition, and I don't think they're good for workers rights,” said Shaw. "I'm not here to talk bad about any labor organization. I do think the more unionized the workforce, whoever the union is, the better. But I also don't think it's healthy for any organization to think that they're the sole game in town and that they are entitled to everything."

Company unions attractive to operators who need LPAs

Labor peace agreements (LPAs) in the cannabis industry offer a pathway to allow for an organized labor force. But as more states are requiring them to obtain a business license, some cannabis companies are aligning with unions that do not appear to be interested in actually organizing employees. 

California, New Jersey, Connecticut, New York, Delaware, and Rhode Island all require cannabis license holders to sign labor peace agreements with local unions. Pennsylvania and Illinois give preference to companies with LPAs. Among the most recent activity in favor of mandated LPAs took place in Minnesota which passed a new law on May 30 mandating LPAs ahead of the official launch of the legal adult-use market, while Massachusetts is attempting to do the same

The final version of Maryland's enacting legislation for legal adult-use cannabis excludes a direct requirement for an LPA, but it does require license holders to negotiate "in good faith" with a "legitimate" union, but it does not specifically define "legitimate." The legislation also prohibits unions from picketing, work stoppages and boycotts. 

Hunting fake unions

With the need for an LPA comes the possibility that upstart organizations could swoop in, help companies fulfill the LPA obligation, and then put no further effort into actually organizing that company’s workers. Most of the country’s unionized cannabis workers are members of either the Teamsters or the UFCW. Both unions have been critical of upstart unions and what they allege are bad-faith efforts to fulfill LPAs.

"That's absolutely something that can happen and is happening," said Hugh Giordano, union representative for UFCW Local 360 in New Jersey. "When these companies talk to the UFCW, and they sign with somebody else, it's always to avoid us."

"Any organization that undermines cannabis workers’ right to secure a fair collective bargaining agreement is a significant problem. Company unions have no place in the cannabis industry," said Teamster Vice President Peter Finn. "A company union is any union that exists solely to advance the interests of the employer."

Finn explained that so-called sham unions typically have a number of traits, such as no physical office, very few expenditures outside of salaries for a small group of individuals, lack of member participation, little to no online presence, no shop stewards and most, if not all, labor peace agreements are in states that require businesses to obtain them.

The Teamsters recently filed complaints in California against two unions, ProTech Local 33 and the National Agricultural Workers Union, they suspected were not bona fide.

NAWU didn't provide proof to the California Agricultural Labor Relations Board that it was a functioning union with members and was declared not bona fide on Oct. 25. 

According to the California database, NAWU signed LPAs in connection with 18 different licenses, five of which were under the Caliva brand. The remaining licenses were split among 11 other businesses. 

At least three licenses under the control of California giant Gold Flora also had LPAs with NAWU. Gold Flora Corp. merged with Caliva owner The Parent Company in July.

ProTech Local 33 was the first organization to be declared not bona fide by the ALRB, setting a precedent. It was the most prolific of the "fake" unions in California, originally signing LPAs for 90 licenses, including numerous ones with failed distributor Herbl, before the ALRB ruled that it was an illegitimate union. The state’s database currently shows the number of ProTech 33 LPAs is 38. 

ProTech Local 33 is a part of a larger Illinois-based union called the National Production Workers Union. The NPWU signed eight LPAs in California, most of which were with Event Horizon Technologies, which is owned by Flow Cannabis, a large cannabis operator that closed up shop earlier this year.

A representative from NPWU's main office immediately hung up when asked for comment on LPAs. The union's website appears new, adding contact information, but otherwise with sparse details. The site claims that NPWU recently organized about 300 cannabis workers in Illinois, Michigan and Arizona, but it does not include any further information, including the names of the companies that supposedly signed collective bargaining agreements. 

-- Zack Huffman, CRB Monitor News

Most Popular

Subscribe For Updates

Explore how CRBMonitor can simplify your cannabis-related compliance challenges.