New York Gov. Kathy Hochul signed legislation eliminating mandatory labor-peace agreements with unions for marijuana operators while negotiating amendments to remove provisions that would establish a cannabis wage board and impose additional reporting requirements.
In a memorandum explaining her decision, Hochul cited concerns about rising costs and uncertainty in the state’s cannabis industry as reasons for negotiating the amendments with legislative leaders.
“The bill, as passed, would create uncertainty in the industry by imposing a burdensome reporting requirement on applicants, and by creating a wage board that could raise costs for licensees and drive consumers to the illicit market,” Hochul wrote.
The amendments, which lawmakers agreed to pursue in the next legislative session, would eliminate the proposed wage board and additional ownership-disclosure requirements. Those provisions remain in the legislation signed Oct. 28 and are scheduled to take effect Jan. 31, 2027, unless lawmakers approve the changes.
How does the new law change labor-peace requirements for New York cannabis businesses?
The legislation repeals the requirement that cannabis businesses enter into labor-peace agreements with unions as a condition of licensure.
Under the 2021 Marihuana Regulation and Taxation Act, applicants were required to sign LPAs with a bona fide labor organization.
The agreements generally bar employers from interfering with union organizing while requiring unions to refrain from picketing or disrupting operations.
Industry operators opposed the requirement, arguing that it added costs and legal exposure for businesses already struggling to turn a profit.
Under the agreement Hochul reached with lawmakers, regulators would retain the discretion to prioritize applicants that voluntarily enter into labor-peace agreements, even though the agreements are no longer mandatory.
What is the cannabis industry’s reaction?
Hochul made the right move to protect the state’s cannabis industry, consumers and workforce, according to a joint statement from the Empire Cannabis Manufacturers Alliance, the Association of New York Cannabis Processors and the Cannabis Farmers Alliance.
“Our industry already pays our workers an average of 19% more than those in comparable occupations statewide,” the groups said, citing a recent FTI Consulting survey.
“Additional labor costs mandated by a wage board would have compounded at every stage of the supply chain, from cultivation and processing to manufacturing and retail, ultimately raising prices for consumers and making it harder to compete with the illicit market.”
Trade group Safe Affordable Cannabis for New York called Hochul’s move a victory for the industry’s small businesses and workers.
“A special interest-driven wage board would have imposed additional costs on small businesses already facing massive federal tax rates as high as 70% while competing with the illicit market, driving up consumer prices and threatening thousands of jobs across the state,” the organization said in a statement.
