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With First Local Contract Secured, Unions See Fertile Ground in Cannabis

Employees at March & Ash in City Heights voted for a collective bargaining agreement with UFCW Local 135. / Photo by Megan Wood

Workers at San Diego-based cannabis dispensary chain March & Ash have formed a union and ratified a collective bargaining agreement with UFCW Local 135, which represents workers in the grocery, health care, retail and cannabis industries, among others.

The contract vote, held at the chain’s Vista, El Centro and City Heights locations, took place on May 12. Workers at each location voted to ratify the contract, which was the result of years-long negotiations between management and union representatives. Left out was March & Ash’s flagship Mission Valley location, which workers, union representatives and management say they hope can be added at a later date.

The agreement, which is valid for three years, is notable for several reasons. First, it was management-led and formulated in concert with the union, who brought workers into the process down the line. According to a state law signed in 2019, every licensed cannabis retailer is required to enter into a so-called labor peace agreement with a qualified union within a certain period of being licensed. As part of the agreements, managers agree not to stop workers from joining a union; organizers agree not to encourage labor strikes. March & Ash’s agreement was signed in 2018 before the Mission Valley location was even opened.

It is also the first labor contract for cannabis workers in San Diego and Imperial counties that originated locally – San Diego dispensaries MedMen and Apothekare also have labor contracts with UFCW, but they were grandfathered into a Los Angeles-based agreement.

As an emerging industry with a large workforce that transitioned from the unlicensed market, the cannabis industry is a big get for whichever union can successfully organize its ranks. Most consumers only interact with cannabis products at their end point, which is in a dispensary. Before a cannabis product gets to that point, the plant has to be cultivated, trimmed, extracted, packed and distributed before it is eventually sold in a licensed shop.

Each of those industry segments offers an opportunity for union representation, said Grant Tom, secretary-treasurer of UFCW Local 135. Tom said he and the union view the March & Ash contract as a blueprint he thinks will be attractive to the rest of the industry. Of course, it is UFCW’s hope that cannabis businesses will want to join their efforts, in particular.

“We formed this contract as a model for the cannabis industry, to help it grow. UFCW is the union for cannabis all the way through, from growth to sales and distribution,” Tom said.

The Contract

To that point, there are provisions included in the contract that March & Ash partner and general counsel Bret Peace said were implemented specifically with cannabis workers in mind.

Peace said that management was presented with several different contract models from the union, none of which seemed to fit with the unique considerations of their workforce. “Let’s break this thing apart, smash it into pieces and let’s make a list of the principles that matter to us,” he said.

First on the list is what Peace called a “cooperative grievance” disciplinary process, which was adapted from a similar disciplinary process used in the Kaiser Permanente contracts also held with UFCW Local 135.

“Seeing as working in cannabis tends to attract younger workers, sometimes it happens that other drugs, besides cannabis, can make their way into employee hands, which could end up in employee lockers,” he said, offering an example of a disciplinary problem.

Such an incident, while a headache for any employer, would be an additional liability for cannabis license-holders, who legally cannot have any other controlled substances apart from cannabis on a licensed property. Rather than take a hard line and fire the worker immediately, a less punitive disciplinary process includes a union-led blueprint for documentation and corrective action that gives employees more chances.

Both Peace and Tom said March & Ash employs many single parents. Because of this, the contract includes an education and daycare fund.

All employees will get a wage increase, which is promised to be at least $1 above any minimum wage requirement and also includes merit wages, as well as increases each year of the contract. That was key for the contract’s success, Peace said, because employees who worked in the illicit market are used to sales incentives and bonuses – some even develop loyal customer followings. They were concerned they would be locked into a limiting pay structure. Health benefits are also included, which pre-existed the contract.

Nearly unheard of for both retail and dispensary jobs is paid vacations, which according to this contract are accrued over time – someone who works at March & Ash for four years, for example, can receive up to four weeks’ vacation.

“We don’t even have that in our Vons contract,” Tom said. Employees will also receive paid holidays, jury duty days and bereavement leave.

Also notable for both retail and cannabis worker contracts is the inclusion of an equity growth account, which is intended to supplant a formal 401(k) program, which could be difficult to run because of cannabis’ classification as an illegal substance at the federal level.

Both Peace and Tom said that the employees’ relative youth was an issue – many employees balked at paying union dues and didn’t see retirement plans as particularly useful to them. The contract assures that 1-2 percent of the value of individual dispensary locations will be deposited into a special employee benefit fund, which could include “anything from simple cash bonuses to committing those funds to a retirement program.”

Challenges

Both management and the union claim the negotiation process was friendly and collaborative, but it was not without challenges.

“Cannabis has its own culture,” Peace said. “Labor needs to be mindful that you have this culture that itself isn’t completed yet, or is morphing. You can’t just go in there round hole, square peg. You have to deal with it differently,” he said.

The biggest misstep in the effort, Peace said, was how the initial notice of unionizing and contract negotiation was first communicated to employees, particularly at the Mission Valley location. Management and the union, as a team, went to each location to inform workers that a bargaining agreement had been reached and a union formed.

“We have smart and invested employees who are going to expect terms and conditions to be immediately laid out, and that didn’t happen,” Peace said.

“I’ll give UFCW credit, after a day or two of ‘What do you mean you have a contract? Show us the terms,’ the union finally said, ‘Look, traditionally, the way we do this is we don’t give the terms until we go up for a vote,” Peace said. That approach “set his hair on fire,” because he viewed it as undoing years’ worth of goodwill and trust between management and employees, though he concedes management was jointly responsible for bungling the initial approach.

“Within 24 hours, they realized they needed to push back on the old ways unions approach this, and worked with us to summarize the terms and provide a cover letter to employees,” Peace said. Employees at the Vista, El Centro and City Heights locations eventually decided to play ball, but Mission Valley was lost in the process.

Organizing Weed Workers

One Mission Valley location worker, who declined to provide his name because he, like all March & Ash employees, signed a non-disclosure agreement, said that he has encountered a general “resistance” to unions that he chalks up to “stoner culture historically being weary of ‘the man.’” He said he is pro-union and hopes that later that the Mission Valley location will eventually be added.

While in the rest of the world, forming a union is viewed very much as a challenge to “the man,” for a workforce that operated illegally until 2018, any kind of organized effort is viewed with suspicion. Other workers view it as a sign of legitimacy, though, and are thrilled to join UFCW’s ranks.

For Blanca Gonzalez, who is a cannabis concierge at March & Ash’s Vista location, her experience working in what she refers to as the “black market” informs her entire perspective on joining a union.

Up until legalization, she was working for illegal dispensaries. She describes enduring police raids, dirty and hazardous work environments, a lack of ability to take breaks, difficulty in taking time off and, of course, no formal benefits.

“Being part of a union would make this more into a career, rather than a job,” Gonzalez said. “It’s not just a job, there is a lot that goes into working in the cannabis industry from the experience to the extensive knowledge one must have,” she said. She thinks joining a union will provide more accountability for management, which in turn will give her and her coworkers more protection and career legitimacy.

Russell Frost, a delivery driver at the Vista location, said he “loves” his job and the company. The 59-year-old grew up in Escondido before moving to the East Coast–he said he recently returned, in part because “weed is legal here,” and he wanted to be part of the lifestyle.

“You don’t have to despise your job to want union protections or benefits,” Frost said. “I think make March & Ash an even better employer – it’ll fix some gaps that aren’t perfect, so I think it will make this an even better job,” he said.

Frost thinks his age and knowledge of labor history gives him perspective that his younger co-workers may not have. Though he is not formally part of the organizing process, he said he expressed his support for unionization to fellow employees.

Assemblywoman Lorena Gonzalez, a former labor leader who represents City Heights, where one of the March & Ash locations is located, said she hopes the contract is a sign of more to come.

“It’s incredibly exciting to see cannabis workers organizing in San Diego, especially at locally owned businesses in communities like City Heights. This groundbreaking union contract is just the beginning of workers leading the way in setting the standards for all jobs across this industry,” Gonzalez said in a statement. “I’m hopeful that if and when Congress passes the PRO Act, we’ll see even more organizing campaigns that make it easier for workers in new industries to join a union.”

The next question is whether the Mission Valley location, and other dispensaries, make similar moves.

“This sets a new standard as far as unions organizing in the cannabis industry is concerned,” said Tom, the UFCW Local 135 official, referring to the collective bargaining agreement. “In San Diego, now we have something different to work with.”