Unions Seek Presence In California Marijuana Business

Date: April 22, 2015

Expanding Legal Trade Draws Interest From Big Labor

Labor unions are eyeing the rise of the legal marijuana businesses as a possible source of fresh revenue and membership as their historical base shrinks. California’s generally pro-union regulatory environment means expanded legalization of the controlled substance in the state could be a windfall for unions. Labor is already conducting polling to assess public support for a 2016 ballot initiative to expand recreational access to marijuana. Led by the United Food and Commercial Workers Western States Council, unions have assisted with drafting legislative language and have a presence on Lt. Gov. Gavin Newsom’s Blue Ribbon Commission on Marijuana Policy, which recently met for the first time to discuss the implications of broadened access. Unions are lobbying for stronger regulation on the industry. Jim Araby, Executive Director of the Western States Council, recently warned the California State Assembly that the current state of regulation in the industry leaves “workers and consumers vulnerable to a host of potential hazards.”

California’s 2.5 million union members give it the largest total membership of any state. According to data from the Bureau of Labor Statistics, union membership in California remained relatively flat between 2000 and 2014 at around 16 percent of workers. That is in sharp contrast to most states, where union rolls shrank over the same time period, led by North Carolina, which lost 53 percent of its union members.

What Happens Next

A 2016 ballot question on marijuana appears likely, though how far it would go has yet to be decided. Recent polling shows a narrow majority of California voters supporting expanded legalization.

What This Means For Small Business

Currently, the legal marijuana market in the United States is worth roughly $2.7 billion. A Colorado-style legalization program could double that number, providing extensive opportunities for entrepreneurs. Small and medium businesses dominate the legal marijuana market, but even in states with liberalized policies, they face massive hurdles. State laws are inconsistent and rapidly evolving, Federal law remains steadfastly opposed to recreational marijuana use, banks and other financial institutions are afraid of prosecution if they offer their services to such establishments, and localities sometimes add a whole new layer of regulation. The specter of unions trying to establish a foothold in the California legalization effort could create entirely new obstacles for business owners who already struggle with so many rules. Unions are already stepping up the pressure on independent marijuana businesses, and workers in other states are pushing for greater union involvement in their operations. For example, employees of a New Jersey dispensary recently filed a complaint with the National Labor Relations Board alleging unlawful interference from their employer.

Additional Reading

Other news media outlets covering the incipient industry include the San Francisco Chronicle, Business Insider, the Philadelphia Inquirer, CNBC, and Seeking Alpha.

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