California cannabis companies tied to fake union could lose their licenses

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(This story was updated at 7:12 pm ET after the state Department of Cannabis Control corrected an earlier tally and said 12 companies had signed labor peace agreements with ProTech.)

At least a dozen California cannabis businesses that signed required agreements with a labor union now deemed illegitimate – including collapsed distribution giant Herbl – are at risk of losing their licenses, state regulators said Monday.

California law requires marijuana businesses to sign a labor peace agreement with a “bona fide” labor organization before they are issued a state license.

But in an apparent effort to flout worker-friendly marijuana legalization laws and benefit businesses seeking labor cost savings, cannabis businesses across the country are signing these agreements with “labor organizations” that have few or no members and no intent to organize workers, critics charge.

On July 6, California’s Agricultural Labor Relations Board (ALRB) ruled that an organization calling itself the Professional Technical Union Local 33, or ProTech, is “not a bona fide labor organization.”

A bona fide labor organization is one that demonstrates “a sincere and good faith intent to organize and represent employees as a collective bargaining representative, including the capacity or ability to do so,” the ALRB wrote in its ruling.

That’s “as opposed to” an “employer-sponsored” group, the ruling added.

In the case of ProTech, the “union” failed “to respond to basic inquiries,” including providing information about membership and organization, which suggests “impropriety,” the ALRB added.

The ALRB’s ruling followed a complaint from the International Brotherhood of Teamsters, one of the established, legitimate unions organizing in the cannabis industry.

On Monday, the state Department of Cannabis Control issued a bulletin informing state marijuana businesses that “any labor peace agreements entered into by licensees with (ProTech) are null and void.”

Any “(l)icensees who have entered into a labor peace agreement with (ProTech) will be notified that they are out of compliance with licensure requirements,” the bulletin added.

A DCC spokesperson told MJBizDaily that 12 companies had signed labor peace agreements with ProTech.

A May 16 public-records request seeking the labor peace agreements themselves was still pending as of Monday.

In its ruling, the ALRB noted that Joe Senese, ProTech’s president, said his organization signed between “20 and 100” labor peace agreements with California cannabis businesses.

Senese could not be reached by MJBizDaily, and a voicemail message left at a number formerly associated with him was not returned.

Among the California cannabis businesses that signed a labor peace agreement with ProTech is Herbl, a major cannabis distributor that recently fell into receivership, as MJBizDaily first reported.

In an emailed statement, Peter Finn, the Teamsters’ Western Region vice president, applauded the agriculture board’s decision.

“Signing (a labor peace agreement) alone isn’t enough, it’s about workers forming a real union and negotiating a strong Teamster contract that will change the lives of workers in the industry,” he told MJBizDaily.

Of late, the Teamsters have demonstrated an eager willingness to use strikes and other tools to leverage concessions out of management.

In April, Teamster-organized workers at three Chicago-area Rise stores owned by Green Thumb Industries staged a 13-day strike after contract negotiations stalled.

Last month, the union filed unfair labor practices complaints against the company with the National Labor Relations Board.

Chris Roberts can be reached at