How we know marijuana industry is maturing: unfair labor practice complaints

This week the National Labor Relations Board took up an unfair labor practices complaint filed by marijuana workers in New Jersey.

This tells us two things about the business of pot. First, it has matured to the point where its workforce is claiming the right to fair treatment under federal law. Second, the federal government is still wrestling with how to regulate a legitimate industry that’s sort of illegal.

Let’s start with the broader picture, murky as it is. The distribution or sale of marijuana is still illegal under federal law and labeled a “serious crime” by the Department of Justice.

But as several states undertook to legalize the weed to various degrees (see accompanying map for the current state of play), the DOJ in 2013 -- in a document known as the “Cole Memo” after its author, Deputy Atty. Gen. James M. Cole -- said it would take a largely hands-off approach to enforcement. It would prioritize things like keeping marijuana out of the hands of minors and profits out of the hands of criminal gangs, but leave most other enforcement in the hands of state and local authorities.

In February 2014, the Treasury Department followed up with guidelines out of its Financial Crimes Enforcement Network, or FinCEN, effectively clearing the way for banks to provide financial services to marijuana businesses legally. The goal, as we observed at the time, was to move much of this economic activity out of the shadows and into auditable, trackable transactions, such as bank and credit card accounts.

Other agencies are being forced to grapple with the legalization movement. The Internal Revenue Service claims the authority to collect taxes on marijuana profits, but its strict regulations governing what deductions pot businesses could take against sales were loosened by the U.S. Tax Court in a 2007 ruling.

And the Interior Department’s Bureau of Reclamation is pondering whether to allow water sales from federal projects to marijuana growers. That’s sure to be a major issue in the West, where the federal government controls a huge share of the water supplies, according to Hilary Bricken, a Seattle-based expert in the rapidly expanding field of cannabis law.

That brings us back to the National Labor Relations Board, which on Tuesday heard a complaint brought by the United Food and Commercial Workers union on behalf of employees of Compassionate Care Foundation, an Atlantic City-area medical marijuana dispensary. The union, which represents thousands of medical marijuana workers in six states and Washington, D.C., says the dispensary used typical anti-labor tactics to discourage unionization, including retaliating by cutting their wages and hours and reclassifying them as agricultural workers, who are exempt from NLRB jurisdiction. The outcome of the hearing couldn’t be learned.

But it was the second case brought by pot workers before the NLRB, following a case just settled by medical marijuana workers in Maine. The workers alleged through the UFCW that their employer, Wellness Connection of Maine, had engaged in “unlawful surveillance, interrogation, and retaliatory discipline and discharge” after they walked out to protest the firm’s pesticide application and handling practices. The terms of the settlement couldn’t be learned, but the union says OSHA earlier had fined Wellness Connection $14,000 for health and safety violations.

What was especially significant about that case, Bricken says, is that the agency’s office of general counsel made clear in an October 2013 memo that it believes the NLRB has jurisdiction over this industry, notwithstanding its illegality under federal law.

The general counsel found that dispensary workers are plainly employees entitled to NLRB protection, not agricultural workers. “We conclude...that the board should assert jurisdiction over this type of business enterprise,” the office said.

Although the general counsel’s memo isn’t binding on the NLRB, Bricken says, there seems to be “no doubt that they’ll punish any employer doing union-busting or treating employees below standard.”

That’s a big step forward for workers in a business certain to expand into new states in coming years, but it also may be the harbinger of bad tidings. Despite its origins as a business associated with hippies and woodland dwellers, the marijuana trade is showing that it’s capable of being just as abusive to its workforce as far more “legitimate” industries.

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