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New NY Marijuana Law Encourages Union Pot Shops

“The legislature listened to calls by workers and advocates to create an industry centered on equity. From the creation of a social equity fund to requiring labor peace for cannabis license holders, this places New York on the forefront of social equity nationally.” — Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union [RWDSU],
ALBANY, N.Y.—New York State’s new law legalizing the cultivation and sale of marijuana to adults contains some of the nation’s strongest protections for organized labor in the industry, including a preference that larger businesses be union shops.

The Marijuana Regulation and Taxation Act, passed March 30, by the state Senate and Assembly and signed the next day by Gov. Andrew Cuomo, will require all applicants for state licenses to grow, process, distribute, or sell cannabis products to make “labor peace” agreements. That means that unlike some pot-industry employers in other states, they can’t interfere with union efforts to organize their workers, such as by holding “captive audience” meetings.

For applicants that have 25 or more employees, the state Office of Cannabis Management, the agency that will be created to oversee the industry, must give priority to those who already have labor-peace agreements or used union labor to construct their facilities.

“The legislature listened to calls by workers and advocates to create an industry centered on equity,” Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union [RWDSU], said in a statement after the bill was passed. “From the creation of a social equity fund to requiring labor peace for cannabis license holders, this places New York on the forefront of social equity nationally.”

The RWDSU now represents almost 500 workers in the state’s medical-cannabis industry. It has collective-bargaining agreements with four of the 10 “registered organizations” that manufacture and provide medical-herb products, and is negotiating with three others. The United Food and Commercial Workers, RWDSU’s parent union, represents cannabis-industry workers in 14 states.

“It is our priority that the 30,000-60,000 jobs created in our state’s adult-use industry meet the same standard as those in the medical-cannabis industry,” RWDSU Local 338 President John Durso said in a statement.

The New York law’s labor protections are among the strongest in the almost 40 states that allow cannabis sales for either medical or recreational use. California and New Jersey’s licensing regulations also require neutrality agreements. 

Illinois gives some preference to applicants that have labor-peace agreements, according to the UFCW. The union lobbied to have a labor-peace provision added to an adult-use bill in New Mexico, says Nikki Kateman of RWDSU Local 338. But it was not included in the final version, which was passed March 31, the Drug Policy Alliance told LaborPress.

New Jersey’s law legalizing adult use, enacted in February, requires all applicants for licenses to submit proof of a labor-peace agreement with a “bona fide labor organization.” It gives preference to those that have a collective-bargaining agreement with a union representing cannabis workers or pledge their “best efforts to utilize union labor” for construction work. It also mandates that medical-marijuana operations enter into a collective-bargaining agreement within 200 days in order to keep their licenses.

In contrast, Colorado, which in 2012 became one of the first two states to allow marijuana sales to adults, does not have a single union shop in the business. In February, workers at a TweedLeaf cultivation facility in Denver filed a petition with the National Labor Relations Board for a vote on whether to join Bakery, Confectionery, Tobacco, and Grain Millers Union Local 26, but they withdrew the petition on March 18. 

Still, since October, workers at 10 cannabis facilities, in California, Illinois, New Jersey, Massachusetts, Pennsylvania, Rhode Island, and Washington, DC have voted to unionize, according to the anti-union law firm Seyfarth Shaw’s blog on cannabis law, The Blunt Truth. 

The main debate in Albany was not over whether to legalize adult use, but over “social equity” — attempting to ensure that the newly legal industry isn’t dominated by a handful of chains, and that small farmers and people from the communities most affected by marijuana arrests, such as Brownsville and East New York in Brooklyn, get a significant share of the jobs and business licenses. 

The new law sets a goal of 50% of licenses going to equity applicants. It prohibits “vertical integration” — cultivation, distribution, and retail must be done by separate enterprises, except for the smallest “microbusinesses” — but it also allows the medical-cannabis registered organizations, which are required to be vertically integrated, to expand into adult-use sales. 

“This is key because ROs are currently subject to labor-peace agreements, and many have unionized and are operating under collective-bargaining agreements,” the New York State AFL-CIO said in an announcement explaining the law’s labor provisions.

The law also prohibits employers from penalizing workers for marijuana use off the job, unless it impairs their performance or violates licensing regulations or federal law.

The state AFL-CIO, the RWDSU, the Workforce Development Institute, and Cornell University’s Institute for Labor Relations are seeking state funding for a social-equity program they’re developing, says Local 338’s Bateman. Its main three aspects, she adds, will be teaching job skills such as cultivation; legal education and services for people trying to get their convictions for marijuana offenses expunged; and helping social-equity applicants navigate the process and learn business skills. The unions also want to work with local organizations to ensure that people in the neighborhoods they’re trying to reach know about those programs.

“We’re very excited that the bill is passed and creates a fair and equitable system,” says Bateman, “We’re ready to move into the implementation process and get this market open.”

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