Marijuana Dispensary Files Lawsuit Challenging Labor Agreement Requirement in Rhode Island’s Cannabis Law

Labour Agreement Dispute Sparks Lawsuit as Marijuana Dispensary Challenges Rhode Island’s Cannabis Law

Amidst escalating tensions with its workers regarding standards and unionization, a Portsmouth dispensary is directing its attention towards the state’s recreational cannabis law. Greenleaf Compassion Center, the dispensary in question, has filed a complaint in federal court, alleging that the recently enacted law, signed in May 2022, violates the U.S. Constitution and national labor standards. The lawsuit comes on the heels of a settlement agreement between the company and its workers for alleged federal labor law violations.

The Rhode Island Cannabis Act, a comprehensive legislation spanning 125 pages, introduced a framework for legalizing, taxing, and selling marijuana while expunging civil and criminal records for marijuana possession. However, Greenleaf takes issue with a specific single-page section of the law that mandates all retailers to enter into “labor peace agreements” with their workers. These agreements allow employees to unionize while agreeing not to picket, boycott, or cease work. The dispensary argues that this requirement deprives employers of their bargaining power, subjects them to unfavorable terms, and infringes upon employees’ rights protected under federal law, such as the right to strike.

In a lawsuit filed in the U.S. District Court for the District of Rhode Island, Greenleaf asserts that the compulsory labor agreement violates both the Supremacy Clause of the U.S. Constitution and the National Labor Relations Act. The company, which initially applied for a license in 2010 and has been serving marijuana customers since 2013, encountered a significant development in April 2021 when its workers voted to join the local chapter of the United and Commercial Workers. Negotiations between Greenleaf and Local 328 continued throughout the following year, resulting in the ratification of the first union contract in August 2022.

During the process, the state legalized recreational marijuana, introducing provisions for labor peace agreements. Greenleaf claims that the union was unyielding and unwilling to compromise, taking advantage of the impending labor agreement mandate to strengthen their position. The company further criticizes the terms of the contract, including a $1,000 ratification bonus for workers, deeming them largely unfavorable and warning of continued harm as long as the labor agreement requirement remains in place and enforced.

In response, union representatives present a different perspective. Sam Marvin, an organizing director for Local 328, stated in an emailed statement that they have witnessed few employers violate workers’ rights as egregiously as Greenleaf has. Marvin argues that labor peace agreements have become necessary to protect workers’ rights, highlighting the union’s victory in the election despite attempts to discourage unionization.

Last month, the National Labor Relations Board ordered Greenleaf to cease threatening, demoting, and laying off workers due to their union support. The board also mandated the dispensary to provide over $116,000 in back pay to workers who were unjustly terminated, as well as to remaining employees who joined the union. This marks the second instance in which the Portsmouth company has been required to compensate employees for violating federal labor , following a prior settlement in December 2021 that included back pay and agreements to address alleged workers’ rights violations.

Greenleaf has chosen not to comment further on the lawsuit beyond its initial complaint. The legal action, naming Local 328 as a defendant, seeks a federal court’s declaration that the labor peace requirement is unconstitutional and requests the nullification of the existing collective labor agreement with employees. Additionally, the lawsuit aims to prevent the state from enforcing the labor peace mandate. Defendants in the lawsuit include the three members of the newly created Cannabis Control —Kimberly Ahern, Robert Jacquard, and Olayiwola Oduyingbo—alongside Matthew Santacroce, deputy director of the R.I. Department of Business Regulation, and Erica Ferrelli, chief of the Office of Cannabis Regulation.

Matthew Touchette, a spokesperson for the Department of Business Regulation and the Office of Cannabis Regulation, stated that the state refrains from commenting on pending litigation. Meanwhile, Marvin declined to provide further comments beyond the emailed statement.

Supporters of the labor provisions in the law, including union organizers and labor advocates, continue to emphasize their importance. Patrick Crowley, a union organizer and secretary-treasurer for the RI AFL-CIO, argues that labor peace agreements are in the best interest of both workers and employers. However, Greenleaf claims in its complaint that the labor agreement was not implemented to benefit the state but rather to serve the policy goals resulting from lobbying efforts.

Some critics of Greenleaf’s actions express outrage at the dispensary’s of its workforce, noting previous opposition to worker organizations. Daniel Denvir, an organizer with the progressive group Reclaim Rhode Island, highlights the discrepancy between Greenleaf’s behavior and the company’s insults directed towards its workforce. Reclaim RI played an active role in shaping the legislation, advocating for provisions that protect workers’ rights.

Greenleaf’s absence from public hearings on the , as acknowledged by Rep. Scott Slater, the House bill’s sponsor, has surprised the Providence Democrat. Slater admits that the original bill did not incorporate the labor requirement but disagrees with Greenleaf’s accusation that the provision was added to appease lobbyists. He emphasizes the need to protect jobs and the employees, not just the lucky few who obtain licenses.

Similar labor peace agreement provisions have been included in cannabis laws in other states, particularly on the West Coast. Shaleen Title, a Boston-based attorney who previously served on the Massachusetts Cannabis Control Commission, notes that Massachusetts’ law does not encompass such labor protections. Title suggests that workers’ rights were not at the forefront of lawmakers’ minds when the law was passed in 2016 but believes that if the discussion were to take place today, workers’ rights would undoubtedly be a key consideration.

Malvin Felix
I'm Malvin, a cannabis news enthusiast who finds joy in staying updated about the latest industry trends. My passion led me to become a dedicated writer, entrepreneur, and investor in the cannabis space. Through my writing, I aim to educate and spark discussions, while my entrepreneurial ventures and strategic investments reflect my commitment to driving positive change in the industry.

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