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At least 10 fake unions identified in California marijuana industry

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At least 10 “labor organizations” that experts and observers have flagged as suspicious – and share characteristics in common with another “union” that state regulators declared fake in July – are signing required labor agreements with licensed California marijuana businesses, according to records obtained by MJBizDaily.


The labor groups in question have inked state-mandated labor pacts with dozens of cannabis businesses across California, including some high-profile companies.


This latest revelation suggests the fake-union problem in California cannabis is wider and more prevalent than previously known and raises questions about both regulators’ effectiveness as well as large marijuana businesses’ intentions around employee welfare.

Under California law, marijuana businesses are required to sign a so-called labor peace agreement with a “bona fide” labor organization before they can be licensed.


However, some of the most recognizable brands in the state have signed these documents with “labor organizations” that appear to be business-friendly cutouts with no history of organizing workers or negotiating contracts, either in cannabis or in any other industry in California, according to state and federal records.


The companies include pre-roll and vape cartridge powerhouse Jeeter, publicly traded retail company Unrivaled Brands, cultivation giant Glass House Brands and popular infused products maker Papa & Barkley, according to state records obtained by MJBizDaily.

Contacted at publicly available email or telephone listings, those businesses did not respond to requests for comment.


In all, at least 83 retail, distribution and manufacturing licenses are associated with questionable unions, state records show.


As MJBizDaily has reported, fake or “company unions” – outfits that have no history of organizing workers or negotiating contracts and, according to critics, no intention of doing so – have infiltrated the marijuana industry across the country.


Want to do better’


Matthew Lee, the California Department of Cannabis Control’s (DCC) general counsel, acknowledged in an interview with MJBizDaily that the problem and pledged the agency’s oversight would improve.


“We really want to do better,” he said. “And we’re actively looking at ways to do that, and hopefully some of them bear fruit.”


On Wednesday, the DCC posted a list of labor peace agreements, months after MJBizDaily sought the information via a public-records request.


Currently, the only avenue of grievance is for recognized labor unions or workers to discover the labor peace agreements (LPA) and subsequently file complaints with state officials.

In California, the International Brotherhood of Teamsters has already filed formal complaints against two of the suspected fake unions.


Jim Araby, an organizer with the Northern California-based United Food and Commercial Workers Local 5, said this week his union soon plans to take action against the other eight.

“We know it’s a sham,” he said.


Patrick Calihan, an attorney for the Professional Technical Union (ProTech), Local 33, claimed in an email to MJBizDaily on Wednesday that “this issue has been created by rival unions fighting to represent employees in the same industry.”


The state Agricultural Labor Relations Board (ALRB) declared ProTech to be non-bona fide in a decision last month after a Teamster complaint.


Calihan did not identify any marijuana industry workplaces ProTech had supposedly organized.


Nor did he identify any California-based organizing efforts by ProTech.


In a July statement provided by Calihan, unidentified “Officers of (ProTech) 33” pledged to appeal the ALRB’s ruling.


“They have clearly not made any adverse findings that our union is anything but a legitimate labor organization” under federal law, the statement noted.


“Therefore, (ProTech) 33 will continue to organize in the Cannabis Industry in California as well as other states to improve the livelihood of its employees, as we have done with many other employees in the industry.”


As of Wednesday, no appeals had been filed, ALRB spokesperson Santiago Avila-Gomez said.


Anyone who signed a labor-peace agreement with ProTech Local 33 has 90 days from the ruling to sign a new pact with a legitimate union or risk losing their license, the DCC’s Lee confirmed.


Common threads

According to DCC records obtained by MJBizDaily, the questionable labor organizations now under scrutiny are:

  • Cannabis Engineers Extractors & Distributors (CEED), which has signed one LPA with a licensee.

  • Congress of Independent Unions, eight LPAs.

  • Cultural Management, one LPA.

  • Industrial Professional and Technical Workers (IPTW), three LPAs.

  • National Agricultural Workers Union, 20 LPAs.

  • National Production Workers Union, seven LPAs.

  • Professional Technical and Clerical Employees Union, two LPAs.

  • Professional Technical Union Local 33, 35 LPAs.

  • Truck Drivers, Chauffeurs, Warehousemen and Helpers Local 707, five LPAs.

  • Union of Craft Cannabis Professionals, one LPA.

The above organizations share at least some of the characteristics of a fake union identified by Kate Bronfenbrenner, the director of Labor Education Research at Cornell University who has researched and published on the phenomenon of company unions in the United States.

These include no required U.S. Department of Labor filings – as in the case of CEED, Cultural Management, IPTW and the Union of Craft Cannabis Professionals – or, when there are filings, no reported members are working in the industry the union claims to organize, Bronfenbrenner told MJBizDaily.


“These fake unions have been around for a while,” she said.


Bronfenbrenner noted that fake unions are a staple of other U.S. industries, including construction workers and security guards – and, almost always, they appear with the cooperation of the company involved.


“Companies know everything there is to know about the labor movement,” she added, including how to subvert it.


In the case of the National Production Workers Union and its local affiliates – including ProTech Local 33, the Professional Technical and Clerical Employees Union as well as the Truck Drivers, Chauffeurs, Warehousemen and Helpers Local 707 – there are other common threads.


Those unions, based in the Chicago area, all name Joseph Senese, ProTech 33’s president, as an officer or president, according to Labor Department forms filed earlier this year.

Phone messages left for Senese were not returned.


The Congress of Independent Unions – whose website includes a patriotic quote from former President Ronald Reagan, who is known for breaking an air-traffic controllers’ strike in 1981 – lists John Flach as its president.


Flach, whom public records list as living in Godfrey, Illinois, outside St. Louis, did not return a message seeking comment.


Pro-labor newsletter Strikewave reported in 2020 that ProTech’s origins can be traced to Chicago-area Teamsters locals that were alleged by authorities to be tied to organized crime.

The national Teamsters declined to comment on ProTech.


Claim ignorance


It’s still unclear exactly how fake unions operate – including how they financially benefit from signing a labor peace agreement that leads to no perceptible union organizing activity or and how they pitch their services to the marijuana industry.


In the case of at least one LPA signed with the National Production Workers Union, that organization was introduced to a marijuana business by an “outside counsel.”


That’s how North Hollywood, California-based Fluids Manufacturing, a licensed distributor that signed with the NPWU in May 2020 and does business as Mammoth Distribution, came to know about the union, according to Jeremy Ouaknine, Mammoth’s chief operating officer.


“Our counsel recommended the National Production Workers Union,” he told MJBizDaily via email.


“We identified no issues that led us to question the integrity and validity of the union,” he added.


“Outside of recent media attention, we had no reason to believe that NPWU was not bona fide.”


Araby, the organizer with United Food and Commercial Workers, which has negotiated contracts with marijuana workers all over the country, said he believes at least some cannabis companies knew exactly what they were doing.


“Sadly, this is not unexpected in an industry that’s trying to come out from being unregulated,” he said.


“We have certain people in the industry that would rather deal without any regulation at all and are doing everything they can to deal with the least amount of regulation as possible.

“And that includes avoiding signing legitimate labor peace agreements as required by law.”

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.