Fake Cannabis Unions And A Legal Battle Over Labor Practices In California

A contentious legal battle in San Diego is unfolding as the Teamsters intervene in a lawsuit challenging California’s labor peace agreement (LPA) requirements. These requirements, aimed at fostering harmonious labor relations, mandate that cannabis businesses engage with bona fide unions to maintain their licenses. However, accusations have surfaced of companies signing agreements with so-called “sham” unions that do not genuinely represent workers’ interests, thereby circumventing the state’s intentions, reports MjBizDaily.

Exploiting Legal Loopholes

Ctrl Alt Destroy, a cannabis store in San Diego filed a lawsuit alleging that California's LPA infringes on free speech and conflicts with federal labor laws. This marks the second attempt by these lawyers to challenge the LPA mandate. Now, the Teamsters Union, which has representation in the Cannabis Industry including big companies like Cresco Labs CRLBF has requested to join the lawsuit as an intervenor. They are actively participating to counteract what they allege is a practice by certain companies to bypass genuine labor organizing through the use of “sham” unions.

Teamsters’ Counterclaim

The Teamsters’ recent court filings claim that some companies are engaging sham unions to fulfill LPA requirements superficially. This allegation points to a deeper issue of exploitation within the regulatory framework, designed to protect cannabis workers. The union is not only seeking to intervene in the lawsuit but also pursuing damages against Ctrl Alt Destroy for alleged deceptive practices.

Not The First Time

Last year, a dozen California cannabis companies had their LPA declared null and void by The Agricultural Labor Relations Board (ALRB), which ruled that a sham union called ProTech 33 is not a legitimate labor organization. This affected the validity of labor peace agreements signed by these companies with the entity. Teamsters also mediated in this result, which led to new LPAs preventing the companies from losing their licenses.

Broader Industry Implications

This legal confrontation could set a significant precedent for the cannabis industry nationwide, particularly in states with similar labor requirements, such as New York, New Jersey and Connecticut.