Oregon Cannabis Companies No Longer Need Labor Peace Agreements to Renew Licenses

Fifty-seven percent of Oregon voters believe cannabis retailers and processors should have labor peace agreements as a prerequisite for state licensure, but that public position is now moot.

The Oregon Liquor and Cannabis Commission (OLCC) announced May 29 that, effective immediately, it will no longer require cannabis companies to submit labor peace agreements to apply for or renew their licenses. The commission had adopted that requirement in December 2024, following the previous month’s passage of ballot Measure 119.

The United Food and Commercial Workers (UFCW) Local 555 filed the ballot measure, in part, “due to ambiguity in federal law” that, according to the international labor union, has led to cannabis workers being denied rights, resulting in “unsafe workplaces, wage theft and other abuses.”

“Something that’s rampant in the industry is toxic chemicals, unchecked safety concerns and lack of proper PPE,” Local 555 spokesperson Miles Eshaia told the Oregon News Service in the leadup to November’s election. “Employers often cut corners. They compromise both worker and consumer safety, and you can avoid all that with a collectively bargained agreement and a collectively bargained safety agreement.”

The OLCC’s U-turn on no longer upholding voter-approved Measure 119 comes after U.S. District Court of Oregon Judge Michael H. Simon ruled on May 20 that the ballot measure is preempted by the National Labor Relations Act (NLRA) and violates cannabis companies’ rights to freedom of speech.

“Given this ruling and in consultation with the Oregon Department of Justice, the OLCC will no longer require labor peace agreements as part of cannabis license applications and license renewals,” according to an OLCC news alert released on May 29.

Initially, it was unclear whether Oregon’s Justice Department would appeal Simon’s May 20 ruling.

Before getting overturned, Measure 119 had required cannabis business licensees or license applicants to “remain neutral” with respect to a bona fide labor organization’s representatives communicating with their employees, which Simon ruled was an abridgement of their First Amendment rights.

“Measure 119 is not limited to restricting only threatening, coercive, false, or misleading speech, but instead prohibits all speech by employers that is not ‘neutral’ toward unionization,” Simon wrote in his opinion and order. “Therefore, Measure 119 violates plaintiffs’ First Amendment rights to free speech.”

Cannabis retailer Ascend Dispensary and cannabis processor Bubble’s Hash, both licensed in Portland, Ore., filed the lawsuit in February, naming Gov. Tina Kotek, state Attorney General Dan Rayfield and a pair of OLCC officials as defendants.  

The defendants, in part, argued that the NLRA might not apply to state-sanctioned cannabis businesses, which operate in a federally illegal marketplace under the Controlled Substances Act. This presented a “threshold question” in the case that Simon answered.

“The NLRA does not limit its jurisdiction to ‘lawful commerce’ or ‘legal substance,’ as some other federal laws do,” the judge wrote. “The NLRB has issued advisory memoranda dating back to 2013, in which it has stated that the medical marijuana industry is within the NLRB’s jurisdiction if the business meets the NLRA’s jurisdictional monetary requirements.”

With states like California, Connecticut, New Jersey and New York already requiring certain cannabis businesses to enter into labor peace agreements for licensure, a common assumption is that cannabis workers don’t have the right to organize under the National Labor Relations Act and therefore need state statutes.

Jeff Toppel, a partner at Bianchi & Brandt, told Cannabis Business Times in December 2023 that that assumption doesn’t hold.

“The premise of [Oregon’s] statute, and I think a lot of the other statutes that seek to require labor peace agreements, is this false premise that [cannabis workers are] not given the full gamut of federal law, of federal protections, because they’re in cannabis,” Toppel said.

One example is when the National Labor Relations Board (NLRB) ruled in December 2022 that Curaleaf acted unlawfully when the multistate operator refused to come to the bargaining table and recognize that its dispensary workers in Chicago voted to join the UFCW.

Toppel, who has argued countless union cases before the NLRB, said that forcing labor peace agreements through state statutes often leads to employers shopping around to get the best deals, which doesn’t always benefit the employees.

Although cannabis companies are no longer required to strike labor peace agreements in Oregon, nothing is stopping the state’s dispensary workers from organizing on their own.

Simon’s ruling in Oregon, however, collides with a March 2025 decision in the U.S. District Court of Southern California, where Judge Todd W. Robinson dismissed a challenge to California law that requires cannabis business applicants or licensees with 10 or more employees to enter into labor peace agreements.

That lawsuit was filed in April 2024 by Ctrl Alt Destroy LLC, which, according to the California Department of Cannabis Control’s (DCC) licensing database, does business as Embr, a dispensary in La Mesa, San Diego County.

California Attorney General Rob Bonta and DCC Director Nicole Elliott, as plaintiffs, argued that the court should not grant Ctrl Alt Destroy its requested relief because doing so would directly facilitate federally illegal conduct.

Robinson agreed, tossing Ctrl Alt Destroy’s challenge on the conclusion that the federal court could not lend its judicial power to a plaintiff “who seeks to invoke that power for the purpose of consummating a transaction in clear violation of [federal] law.”

In Oregon, a UFCW Local 555 spokesperson pointed out the conflicting federal rulings in a statement provided to KOIN 6 News.

“We now have conflicting federal rulings, with a judge in Oregon putting Measure 119 on hold while a California judge has upheld a similar law,” the spokesperson said. “One of these rulings is destined to be overturned on appeal. Our strong suspicion is that Judge Simon’s opinion, which flaunts Supreme Court precedent, will be the one reversed.”