The new regulatory requirements placed on the cannabis industry in California will bring significant changes in labor relations between companies and their employees. Unions can provide a number of benefits to the industry, including increased political and lobbying influence, improved public relations, and legal protections. In addition, unions educate the workforce and improve industry-wide working conditions.

However, many business owners see unions as inflexible, inefficient, and expensive, and want to avoid the unionization of their own companies.

Unions and MAUCRSA

The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) requires all commercial cannabis entities with 20 or more employees to enter into a “labor peace agreement” to obtain a license. In certain localities, the threshold is even lower.

A “labor peace agreement” is an agreement in which the company agrees not to disrupt efforts by a labor organization (also known as a union) to communicate with, and attempt to organize and represent, the company’s employees. The agreement must provide the union access to areas in which the employees work so that the union can discuss the employees’ right to representation, employment rights under state law, and terms and conditions of employment.

Cannabis employers need to understand their legal obligations under California and federal law to navigate the new management and operating requirements associated with unionization under MAUCRSA. Under California and federal law, management cannot interfere with the unionization process, deny access to the union representatives, fire or threaten to fire employees that vote to join a union, question employees about their union support (ie. do NOT question an employee about whether he or she is pro-union or anti-union), or threaten to close the company if employees unionize. Employers need to train their upper management staff of these requirements to avoid liability and to promote healthy labor relations.

If your company wants to avoid unionization, boost morale so that collective representation is viewed as unnecessary. Follow the applicable wage and hour, disability, harassment, and retaliation laws, create employment policies in handbooks and follow the policies, provide competitive wages and benefits, communicate with your employees, listen to your employees’ concerns, maintain safe and compliant working conditions, and treat your employees as valuable members of the team. Consult with an attorney to address your employees’ concerns before they decide to unionize, so you can manage labor relations on your own terms.

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Annie Smiddy
Anne “Annie” Smiddy, Senior Counsel with Ad Astra Law Group, LLP Ms. Smiddy is based in San Diego, California, and acts as Senior Counsel on cases in Northern and Southern California. Ms. Smiddy believes in personalized legal representation for all her clients in an efficient and cost-effective manner. She practices general civil litigation, and her practice has consisted of both plaintiff and defense work in cases involving: employment law, breach of contract, business owner disputes, trade secret issues, commercial leases, real estate nondisclosure, neighbor disputes, permitting issues, and construction defect. Ms. Smiddy also consults with businesses on their compliance and human resource needs, and on real estate and construction matters. Ms. Smiddy’s extensive knowledge of multiple practice areas, and her work on cannabis litigation matters, enables her to be a “one stop shop” for her business clients in the cannabis industry. More information about Ad Astra Law Group, LLP can be found at

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