The legalization of cannabis in California has touched off a wave of unionization efforts across the state, but the movement has been slow in San Jose—a city that has been iffy about growing its small weed industry.
According to Jim Araby, United Food and Commercial Workers (UFCW) Local 5 strategic campaign director, only one of San Jose’s 16 dispensaries is unionized—MedMen. Workers at the dispensary Urbn Leaf won a union election in October 2019, but the company appealed the election outcome to the National Labor Relations Board. The board upheld the vote, and the union is now working with the company to negotiate a contract.
“Each and every person is an asset to the future of our company so I believe we deserve to be treated as such,” Brittany Maze, a worker at Urbn Leaf, told San José Spotlight. “Unionizing is a big step forward the cannabis industry is worthy of.”
Of the 14 other dispensaries, three have a labor peace agreement—essentially an arrangement where a union agrees to not stop work through strikes or boycotts, while the employer agrees not to interfere with union organizing. Araby told San José Spotlight one of those agreements, which concerns the company White Fire, is with an organization not affiliated with the American Federation of Labor and Congress of Internal Organizations.
Araby said it’s ultimately up to workers whether they want to unionize. But he claims San Jose’s resistance to legalized weed has made companies especially wary of unions disrupting their activities.
“They’ve operated in this silo where they basically had a legal oligopoly,” Araby said, referring to a system where a small pool of sellers functionally control the market for a product. “They didn’t need to deal with labor because labor wasn’t organizing down here.”
UFCW Local 5 recently announced the addition of 500 members after workers at Bay Area cannabis dispensaries, including Stizzy/Authentic, ratified union contracts. The new agreement is part of a statewide contract between UFCW and cannabis holding company Shryne Group, which will cover almost 1,200 workers at dozens of dispensaries—but none in San Jose.
California legalized recreational cannabis use in 2016, and San Jose officials approved of local sale to adults in 2018. However, some cities in Santa Clara County passed rules banning cannabis sales. San Jose restricted cannabis stores to industrial zones.
The City Council recently approved changes to zoning laws that allow up to 21 new cannabis businesses in the city. By comparison, neighboring San Francisco has 80 permitted cannabis retailers—five times more than San Jose, which has 200,000 more residents.
“From the union’s perspective, we’ve kind of dipped our toes down there (in San Jose) a few times, but we haven’t put in resources to do a San Jose organizing plan,” Araby said. “We’ve talked to a few workers and got things going on, but our focus has been to set standards in the industry, so we need to organize the largest players.”
When MedMen employees unionized, they stipulated an hourly wage $3 above the minimum wage in California, two weeks of vacation, overtime wage premiums, enhanced holiday pay and a 40% employee discount. But those who represent management say unionizing may hamper growth in an industry struggling to set down roots in San Jose. Workers from MedMen declined to speak with San José Spotlight through their union representatives.
Frustration with regulations
Further complicating matters is San Jose companies may not be complying with a state law.
In 2019, California required dispensaries with 20 or more employees to establish labor peace agreements as a prerequisite to getting licensed. Stores with fewer than 20 workers must promise to sign one of these agreements if they cross that threshold.
According to a city memo from February, approximately 15 of the 16 registered cannabis businesses in San Jose have 20 or more workers. One has a collective bargaining agreement, and another is in the process of negotiating one. The memo says four companies claim to have labor peace agreements, but only two are signed with bona fide labor organizations.
City spokesperson Carolina Camarena told San José Spotlight the state’s Division of Cannabis Control enforces this law, but the city manager’s office is recommending an additional rule going forward.
“If a cannabis business wants to open a second location or renew its existing registration in December, it will need to provide the city with a copy of its labor peace agreement,” Camarena said.
Rich De La Rosa, a lobbyist for San Jose dispensary Canna Culture, told San José Spotlight the city’s 16 cannabis companies are technically allowed to open second storefronts, but they’re running into challenges finding venues.
“One site we looked at was 25 feet from a day care center,” De La Rosa said. “It was 975 feet away, we needed to be 1,000, so we couldn’t go there.”
He said his client missed out on another potential spot because the landlord didn’t want to host a cannabis business.
De La Rosa said companies are also contending with competition from the black market. Illegal weed dealers are able to sell their product at a cheaper price because they don’t have to factor in costs from meeting regulatory requirements, he said. All of these factors make it difficult for legal companies to operate in San Jose. He said unions create additional costs that may make things too difficult for some dispensaries.
“To be honest with you, several (San Jose) companies probably can’t afford it—there’s not the margin in profit that everybody believes there is in cannabis,” De La Rosa said.