Alleged fake marijuana unions are expanding foothold across United States

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(This story has been updated to include a statement from CEED and to note LaborPress is a pro-union publication.) 

There’s something unique about Ascend Cannabis’ adult-use marijuana store in Montclair, New Jersey, an affluent New York City suburb.

And it underscores a “significant problem” in the nation’s cannabis industry that labor unions say is thwarting worker rights – and so far eluding otherwise strict regulations governing the marijuana industry.

Two competing labor organizations have signed up workers at the Ascend dispensary, which does business under the umbrella of Ascend Wellness Holdings, a New York-based multistate operator.

The United Food and Commercial Workers has organized the employees that oversee the “shift leads,” who supervise day-to-day retail operations, at Ascend Montclair, Hugh Giordano, organizing director for UFCW Local 152, told MJBizDaily.

But the UFCW – which claims to have organized “tens of thousands” of cannabis retail employees, delivery drivers and growers and trimmers nationwide – was a latecomer.

An outfit called the Cannabis Engineers Extractors and Distributors (CEED), with a cheeky local unit number of 420, arrived at Ascend first and organized the budtenders in early 2022.

The UFCW showed up at Ascend Montclair after workers started becoming suspicious about CEED, according to a current worker at the store who asked for anonymity in order to avoid retaliation.

Labor organizers and experts say that CEED 420 operates like a “company union,” a sham labor organization that’s intended to thwart legitimate labor organizing that might benefit workers to instead bolster the company’s interests.

So-called company unions are a tried-and-true technique that’s been used in the past to undermine legitimate labor organizing in other sectors, including trash collection and health care.

Such organizations have been identified in California.

But according to documents obtained by MJBizDaily and interviews with workers in two states, they have spread to companies operating in Arizona, Illinois, Michigan and Ohio as well as New Jersey.

Their presence in cannabis – a labor-intensive business that represents a generational opportunity for labor unions to expand their membership – jeopardizes the gains that organized labor has made to date in the industry.

“Fake, management-aligned, labor unions are becoming more and more prevalent throughout the cannabis industry and they serve one purpose – to line the pockets of owners at the expense of the workers,” Ademola Oyefeso, an international vice president at the UFCW and director of the union’s legislative and political action department, told MJBizDaily in a statement.

“The fact that companies are taking advantage of this is disheartening, and it must stop,” he added. “It is time for regulators to step up and protect workers from these shady operators.”

Peter Finn, the western regional vice president of the International Brotherhood of Teamsters, echoed that sentiment.

“Any organization that undermines cannabis workers’ right to secure a fair collective-bargaining agreement is a significant problem,” Finn told MJBizDaily.

“Company unions have no place in the cannabis industry or any other craft.”

A union with zero members?

New Jersey – like California, New York and elsewhere – requires marijuana businesses to sign a so-called labor peace agreement (LPA) with a “bona fide” labor organization before they can be licensed.

An LPA is a pact between management and a labor union under which the company agrees not to interfere with labor organizing.

An LPA is not a contract but, in some cases, has led to contracts.

The UFCW and the Teamsters have both had success organizing workers and winning contracts at cannabis companies across the country.

That’s in part why the situation at Ascend’s Montclair dispensary has attracted scrutiny.

So far, Ascend is the only cannabis business in New Jersey organized by CEED, which reported no members at all in federally mandated filings with the U.S. Department of Labor.

CEED claims to be an affiliate of a larger umbrella organization called the International Union of Journeymen and Allied Trades (IUJAT).

IUJAT is not a member of the New York City Labor Council, a council spokesperson told MJBizDaily.

And at least two tri-state area labor organizations, including a local Teamsters affiliate, have identified the IUJAT as a “sham” union – an organization that might talk and act like an outfit dedicated to organizing workers that instead acts on behalf of management.

LaborPress – a pro-union publication which covers labor issues – described the leader of an IUJAT affiliate as an ex-Teamster suspended from that union for making “sham collective bargaining agreements” who served time in federal prison for extortion.

CEED was the focus of a since-withdrawn complaint filed with the National Labor Relations Board (NLRB).

A Freedom of Information Act request from MJBizDaily seeking the complaint filed with the NLRB last week was not fulfilled before this story was published.

Ascend Cannabis’ parent, Ascend Wellness, did not respond to several calls and emails seeking comment.

In a statement attributed to union spokesman Guy James provided after this story initially was published on Monday, CEED emphasized that no states have “disqualified” the union and that it “vehemently rejects that it is a company-sided union.”

“Anyone asserting that there should be only one choice for workers in an entire industry seeks to limit workers from exercising their rights under the law.”

National labor officials say CEED 420 is part of a trend identified by MJBizDaily, one that goes deeper than previously reported.

It’s one of at least two management-aligned “unions” that have signed contracts with workers nationwide – the other one being an outfit known as the Professional Technical Union (ProTech).

These activities are ongoing without any apparent repercussions from state regulators.

Sham unions

Other so-called fake unions – including two officially designated by the California Agricultural Labor Relations Board (ALRB) as “non-bona fide” after investigations that followed MJBizDaily reporting – have signed LPAs in the Golden State.

These alleged fake unions include the National Production Workers Union’s (NPWU) “ProTech Local 33” affiliate, which the ALRB found in July to be illegitimate.

All companies that had signed an LPA with ProTech were informed by the California Department of Cannabis Control to sign another LPA with a legitimate union or risk losing their state licenses.

Earlier this month, that board found another so-called union, the National Agricultural Workers Union – which had signed LPAs with Caliva, a property of The Parent Co., whose investors include hip-hop mogul Jay-Z – to be non-bona fide.

But California appears unique in pursuing action against the questionable unions.

According to documents obtained by MJBizDaily, ProTech and Progressive Treatment Solutions/Consume Cannabis, a multistate operator with locations in Arizona, Illinois, Michigan and Ohio, signed a contract that covers workers in multiple markets.

One worker at a PTS/Consume retail location who spoke with MJBizDaily on condition of anonymity over fears of retaliation, said the union is nearly invisible.

The union does, however, provide medical and other benefits, according to federal filings and documents obtained by MJBizDaily.

Progressive Treatment Solutions did not respond to requests for comment.

Joe Vincent Senese, whom Department of Labor filings identify as NPWU/ProTech’s president, did not respond to an email seeking comment.

Patrick Calihan, a Chicago-area attorney who represents ProTech, told MJBizDaily via email that the organization “does currently have contracts both in the cannabis industry and in other, non-cannabis, sectors.”

Calihan added, using italics for emphasis: “As you are already aware, the California ALRB ruling in no way found that ProTech was an ‘illegitimate’ labor organization under the nation’s labor laws – it merely made a limited ruling regarding its own California LPA requirements.”

He did not respond to further questions.

Eluding regulators

So far, marijuana regulators appear to have taken a mostly hands-off approach to alleged sham unions organizing in their states.

It’s unclear how far beyond Ascend Montclair that CEED 420 might have spread in New Jersey.

The union might have signed labor peace agreements with other businesses, but those pacts are not considered public records, said Christene Carr, a spokesperson for New Jersey’s Cannabis Regulatory Commission (CRC).

Carr could not confirm nor deny whether the CRC has fielded any complaints against CEED. No enforcement actions have been taken against the union or Ascend, according to the agency’s website.

In Michigan, where Progressive Treatment Solutions operates several marijuana retailers in the western part of the state – which has less union density than the Detroit metro area, with its strong union traditions dating to the automotive industry’s heyday – regulators expressed similar disinterest.

“After a cursory glance, I can say we have not” heard any complaints about sham unions in Michigan cannabis, either signing labor peace agreements or full contracts, said David Harns, a spokesperson for the state’s Cannabis Regulatory Agency.

Harns declined to comment further.

How they operate

Both CEED 420 and ProTech have at least some characteristics in common that labor experts agree are suspicious: They report few or no members, and their Department of Labor filings indicate limited organizing and political work along with limited physical footprints – no local headquarters or hiring halls that are standards with legitimate unions.

“They don’t have any property, they don’t have any buildings,” said Marick Masters, a professor of business at Wayne State University in Detroit, who reviewed ProTech after being contacted by MJBizDaily.

“They don’t list any members. They don’t have a dues rate,” he added. “This looks very strange to me.

“That leads me to wonder whether this is a group that wants to keep the union out.”

Robert Meija is an adjunct professor at Stockton University, where he heads the New Jersey school’s Cannabis Studies program.

Meija remembers meeting two people at a New Jersey marijuana industry meet-and-greet in early 2022 who identified themselves as affiliated with CEED.

As he walked through the door to the event, “these two guys come barreling into me,” Meija recalled. “They said they were with CEED 420, and I said, ‘What’s that?'”

In a brief conversation, the CEED representative asked Meija to refer to them any companies that might need a labor peace agreement, the adjunct professor told MJBizDaily.

“They clearly saw me as a lead,” he said.

But afterward, Meija grew suspicious. He looked up the CEED website and saw the address listed was a Trenton, New Jersey-based political consultancy.

And whatever other work CEED might be doing, it appears to be keeping quiet. Meija is still suspicious.

With all the requirements that cannabis businesses need to meet, “I can see why someone would fall for” signing an LPA with a fake union “without doing their due diligence,” he said.

And the marijuana industry seems ripe for any unscrupulous, purported labor organization.

“It just feels like another example of an opportunistic arm of the cannabis industry that’s figured out a niche they can exploit.”

The Teamsters’ Finn went further.

“They are a shameful perversion of the only institution in America that exists to protect workers, an institution that so many people have not only fought for but died for throughout our country’s history,” he said.

“Any employer using a sham union to avoid real collective bargaining should be ashamed of themselves, and anyone on the payroll of a sham union should go get a real job.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.