Unions are coming for your cannabis business.
Get ready
The cannabis and hemp industries are in some union's crosshairs. Unions have seen declining membership over the past 50 years, and they see cannabis in their sweet spot - a large, growing industry full of low/semi-skilled workers. Every cannabis company should be worried.
Unionization brings many problems: higher labour costs, lower productivity (e.g., reduced management flexibility around scheduling, promotions and even selling the business) and a greater prospect for toxic management-labour relations, including work stoppages.
A unionization push could not be coming at a worse time for many firms, who are challenged by downward price pressure, low employee engagement and punitive taxation. Unionization could easily throw many struggling companies (read: most of the legal industry) into the red or even bankruptcy. How real is the threat?
Unions, beginning with the United Food and Commercial Workers, started targeting the Canadian and American cannabis and hemp industries back in 2013. The level of unionization is probably low - for now. All provinces and many legal adult-use states (e.g., Illinois, California, New Jersey, New York) have enacted policy measures and established bodies that support the organizing workers.
Moreover, some state licensing regimes stipulate the creation of Labor Peace Agreements (LPA). Within a LPA, the employer must surrender certain rights under federal law and agree not to challenge any organizing efforts.
Lastly, high levels of pay inequality coupled with Covid anxiety and rising inflation has established a fertile backdrop for a resurgence in union membership.
Employees need to be paid a fair wage, treated with respect and accommodated in a safe environment. Leaders who ignore these fundamental practices may unwittingly be opening the door to unionization, a more costly and operationally challenging proposition than what they have today.
#unions #employees #LPAs #wages #UFCW