California’s pot industry has a ‘fake union’ problem

It looks like it’s time to add “fake unions” to the long list of problems facing California’s multibillion-dollar legal pot industry.

Some of the biggest legal cannabis companies in California appear to be violating state law by working with organizations that claim to be labor groups but are accused of not actually attempting to fight for workers’ rights.

California law requires any pot company with more than 20 employees to sign a labor peace agreement with a “bona fide” labor union. The law is intended to provide workers with easier access to labor organizations that can petition the company for better wages and working conditions. 

However, at least three of the biggest pot companies in the state have been caught working with a “fake union” called Professional Technical Union Local 33, or Pro-Tech, according to MJBizDaily. Last month, the California Agricultural Labor Relations Board determined that Pro-Tech was “not a bona fide labor organization” because they made no discernible effort to organize or represent any employees in the cannabis industry and even failed to have a physical presence in California.

The board ultimately determined that Pro-Tech and the companies it contracted with had entered into a “sham relationship” in order to skirt the state law.

The list of companies working with Pro-Tech includes: Nabis, one of the biggest distribution companies in the state; Herbl, a major distributor that recently went out of business; and Glass House Brands, one of the biggest pot farming companies in the state, according to MJBizDaily.

The complaint against Pro-Tech was filed by the International Brotherhood of the Teamsters, a union that represents more than a million workers in North America. Peter Finn, a vice president at the Teamsters, told SFGATE in a phone interview that these sham unions hurt the rights of California’s cannabis industry workers.

“This is not just about a labor peace agreement, this is about a worker’s ability to form a union to improve their wages, benefits and working conditions,” Finn said. “These fake unions and employers that engage with them are undermining the law and the will of the people.”

Last month, the Teamsters filed a second complaint, alleging that a union called the National Agricultural Workers Union was also “not a bona fide labor organization.” According to the Teamsters, the National Agricultural Workers Union has agreements with Caliva, a cannabis company owned by The Parent Company since 2021, an SEC filing shows. Rapper Jay-Z is an investor in The Parent Company.

Anthony P. Raimondo, an attorney representing the National Agricultural Workers Union, said the Teamsters’ allegations were “flatly untrue” and described the group as a “startup union” with no paid staff that has slowly been working to organize workers.

“A lot of what happened with this organization became stalled during COVID because there were limited opportunities to organize and do face-to-face activity,” Raimondo said in a phone interview with SFGATE.

Companies have 180 days to enter into a new labor peace agreement if they are found to be working with an entity that is not a bona fide labor organization, Department of Cannabis Control spokesperson David Hafner told SFGATE.

So far, most of the implicated companies are staying silent. Nabis declined to comment when reached by SFGATE, and both Caliva and The Parent Company did not return requests for comment.

A spokesperson for Glass House Brands said in an emailed statement to SFGATE that the company is working to find a replacement union to sign an agreement with. “We are in the process of complying with this change of status, and expect to make the adjustment within the time frame requested by the State,” the statement said.

Labor peace agreements are contracts between a company and a labor organization where the union agrees not to picket or boycott the business and the business agrees not to disrupt efforts by the union to organize workers and petition for better working conditions and pay. While they’re not specific to the cannabis industry, pot companies increasingly need to strike these deals as more states with legal weed mandate them thanks to heavy labor lobbying.

Beginning in July 2024, the requirement for a labor peace agreement will apply to all companies with 10 or more employees, down from 20.

Hafner said in an email to SFGATE that the California cannabis regulator does not actively investigate unions that enter into labor peace agreements with pot companies, instead relying on a “complaint-driven” system.

“DCC is actively working on efforts to increase transparency into licensees’ labor peace agreements, so that we can strengthen labor organizations’ and workers’ ability to file effective complaints,” Hafner said.

California has the largest number of legal cannabis industry workers in America, according to a 2022 report, with more than 83,000 people employed in the industry in 2021.

There are likely other cannabis companies that have signed agreements with Pro-Tech. An attorney for the organization told the state’s labor relations board that they had entered into 64 labor agreements with businesses in California’s cannabis industry.