California unions are demanding that 100,000 marijuana production, packaging and distribution workers organize in anticipation of the legalization of recreational weed on January 1.
California has a reputation as a union-friendly state, with 16.3 percent of its workers unionized, versus 10.7 percent nationally. But that is due to over 52 percent of its public-sector workers being unionized, versus 34.4 percent nationally. California’s 7.8 percent private-sector workers unionized is just slightly higher than the 6.6 percent average nationally.
But passage of the California Control, Regulate and Tax Adult Use of Marijuana Initiative (Prop 64), legalizing recreational and medical use of marijuana on January 1, California is projected to generate $6.6 billion in legal cannabis sales and 100,000 private sector jobs in 2018, according to ArcView Market Research.
North America’s legal cannabis industry has been growing at about the same 28 percent compounded rate for the roll-out of Internet broadband access. But to put the Golden State’s coming economic boom in perspective, California’s 2016 legal cannabis sales were $1.8 billion, or about 27 percent of the $6.7 billion of legal North American sales. California’s 2018 legal cannabis sales are projected to spike to 59 percent of North America’s entire $11.2 billion legal market sales.
With up to 80 percent of the illegal marijuana markets brought under regulation, it was expected that the United Food and Commercial Workers’ union would try to organize retail sales; the Teamsters’ union would organize transportation and distribution; and the United Farm Workers’ union would organize the agricultural sector.
But union infighting kicked-off when the United Farm Workers union, founded in California in 1962 by Cesar Chavez, claimed that marijuana is a Mexican-American agricultural product that would benefit from branding with its iconic WFC logo.
That caused the United Food and Commercial Workers (UFCW) union to claim they intend to organize the entire industry, because UFW was not respecting industry similarity of the retail grocery clerks and meat cutters that the UFCW represents statewide.
Teamsters Local 70 organizer Kristin Heidelbach told the Associated Press that she hopes the efforts to potentially organize the 100,000 California workers are not thwarted by squabbling amongst union leaders. But Teamsters are already a threat to the other unions, because they have already organized medical marijuana growers with two-year contracts providing pensions, paid vacation and health insurance. Teamsters’ negotiated wage rates are set to also jump from $18 per hour in 2018 to $25.75 an hour in 2019.
Union disputes are normally settled by the U.S. National Labor Relations Board. But Michael Leong at the Oakland Regional office told the union-backed Workforce blog that the federal government has never been asked to mediate a dispute involving a business that was blatantly illegal under federal law.
Michael Lee, General Counsel for the California Agricultural Labor Relations Board, told the Sacramento Bee that all marijuana workers could be agricultural workers, which is outside the NLRB’s domain. He believes they qualify for California jurisdiction.
But the union battle to organize California private sector workers could fail if the combined 15 percent state excise tax, steep state cultivation taxes, and up to 25 percent local sin sales taxes drives customers back to illegal sales in the black market.
The marijuana user-friendly Hightimes blog reported that additional taxes and union costs could push the legal cost to buy recreational weed much higher. Cannabis Growers Association board member Tawnie Logan told the New York Times that an eighth of an ounce of weed at a California dispensary currently costs about $50, whereas an illegal street dealer only charges $20.
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