A federal judge delivered a setback to a Utah medical cannabis dispensary that’s resisting unionization on the grounds that federal cannabis prohibition means federal labor law doesn’t apply, court records show.
However, if The Flower Shop is eventually successful in court, a ruling could spell trouble for labor organizing efforts in the cannabis industry, Bloomberg Law reported.
U.S. District Judge Anne Marie McIlff Allen’s July 20 ruling came in a long-simmering case brought against the National Labor Relations Board by The Flower Shop, which operates medical marijuana dispensaries in the cities of Ogden and Logan and under the corporate name of True North of Utah.
It’s just one of several cannabis companies that are using the courts in an effort to defeat worker organizing.
Does federal labor law apply to marijuana?
The Flower Shop sued the NLRB earlier this month to halt proceedings brought against the company by the United Food and Commercial Workers Local 99.
The union alleges that the company fired four employees in 2024 for their union organizing activities – an act that’s prohibited under the National Labor Relations Act.
As Bloomberg Law reported, a regional director of the NLRB investigated and brought a complaint against the company. A hearing was scheduled for this month.
In response, The Flower Shop sued, deploying a claim that’s been used in other jurisdictions: that federal cannabis prohibition means cannabis businesses that operate solely in one state aren’t subject to federal labor protections.
The company deployed what Bloomberg Law called a “novel argument”: that federal labor law defines “commerce” as “exchange among multiple states.” Since state-legal cannabis companies can engage in only intrastate commerce, the NLRA doesn’t apply, the company argued.
And medical marijuana rescheduling, following the Trump Justice Department’s reclassification of medical MMJ as a Schedule 3 drug, doesn’t change that, The Flower Shop argued.
How the Trump administration may have helped cannabis labor organizing
In her ruling, Allen, a Biden appointee, denied The Flower Shop’s efforts for a preliminary injunction, finding that the dispensary will not “suffer irreparable injury” as the normal court process plays out.
The company is now due to have its case heard at the NLRB.
However, it can try again in appellate court if it loses, as Bloomberg News reported.
And if a court rules that the NLRA doesn’t apply to cannabis, it would have significant impacts on union efforts in the industry.
These include several major strikes across the country that have been tempered by successful de-unionization efforts in several states.
But the Trump administration may have made that outcome less likely.
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Following medical marijuana rescheduling, the U.S. Drug Enforcement Administration is accepting applications for registration from state-licensed MMJ operators.
And “this emerging federal framework … really hurts the intrastate argument” that The Flower Shop deployed, legal scholar Victoria Litman told Bloomberg.
A Michigan company called Exclusive Brands also tried to use the federal prohibition argument to thwart a unionization push, but organizers withdrew that effort before the question could be tested, records show.
