On January 25, 2024, a landmark event unfolded in the cannabis industry’s ongoing battle for unionization, as the UFCW prevailed in an election before the Arizona Agricultural Employment Relations Board (“AERB”) to unionize employees working at a cultivation site operated by Trulieve Magnolia in Phoenix. The UFCW–Local 99’s victory is significant for two reasons:

1. 2. Historical breakthrough: The election represents the first successful organizing effort of a cannabis cultivation site in Arizona; and
   3. Limited precedent in Arizona: It is only the second election ever completed in Arizona the under AERB.

The UFCW secured a decisive victory in the January 25th election with a vote of 37-4.

Why is this significant for cannabis employers?

As we’ve explored in previous articles, the National Labor Relations Board (“Board”) has created an environment ripe for union organizing over the past several years. In August 2023, the Board issued several decisions transforming how unions organize, making it more probable for employers to be forced to bargain with a union without the benefit of a secret ballot election.  As a result of these changes, union organizing has soared across all industries, but few industries have been targeted by the labor movement more than cannabis.  That said, until now, unions have largely focused their organizing efforts on retail workers in the cannabis industry.

The reason for the labor movement’s focus on retail workers was simple: the National Labor Relations Act (“NLRA”) specifically excludes from the definition of “employee” any “individual employed as an agricultural laborer.” 29. U.S.C. §152(2).  In a non-binding memorandum, the Board’s Division of Advice addressed the application of the “agricultural” exemption to cannabis cultivation workers in 2020.  In the memorandum issued in Agri-Kind Advice Memorandum, 04-CA-260089 (October 21, 2020), the NLRB’s Division of Advice concluded:

We conclude that the two employees at issue in this case are exempt from the Act because they perform a substantial amount of agricultural functions within the meaning of Section 3(f) of the FLSA, i.e., cultivating, growing, harvesting, and preparing for market the raw plants, a horticultural commodity. The cultivation associate spent approximately 70 percent of work time harvesting, de-fanning, and skirting the plants, which included cutting plants from their stalks, taping on labels, hanging plants to be cured, pruning the plants by removing large leaves, and removing the bottoms of the plants. The trimmer cleaned, planted, harvested, and packaged the plants and spent a substantial amount of time hand-sorting buds based on their salability. The two employees both worked by hand; there is no evidence either employee used a machine. Although some of the plants went on to be further manipulated through an “extraction and infusion process” to form retail products such as concentrates, ointments, and tablets, there is no evidence either employee engaged in such processing.

Since the employees were “exempt” agricultural employees under the NLRA, they could not be part of the proposed bargaining unit that included various categories of non-agricultural workers. And while the memorandum is not binding, it demonstrates the NLRB’s position that it would broadly construe the “agricultural exemption” to exclude a number of production and cultivation employees from organizing with other workers.  See also, Cannaseur’s Choice, LLC and UFCW, 2021 NLRB REG. DIR. DEC. LEXIS 195 (Region 19, December 10, 2021) (Regional Director decision finding that “growers” and “trimmers” were agricultural employees exempt from the NLRA and therefore could not be part of a proposed unit that included, “extraction technicians, machine operators, inventory associates [and] fulfillment associates”).

Because of this exemption, the labor movement has focused much of their attention on retail workers in the cannabis industry, who fall within the definition of “employee” under the NLRA. That is…until now.  While agricultural employees cannot organize under the NLRA, several states have enacted statutes over the years that create a state mechanism for agricultural workers to unionize.

In Arizona, the AERB was created by the Agricultural Employment Relations Act (“Act”), A.R.S. § 23-1386, with the stated purpose of providing a “means to collectively bargain which is fair and equitable to agricultural employers, labor organizations and employees.”  Like the NLRB, the AERB has responsibility for all the following:

• Protecting the rights of agricultural employees;
• Protecting the rights of agricultural employers;
• Processing certifications of representation of agricultural workers and conducting representation elections;
• Processing de-certifications of representation of agricultural workers and conducting de-certification elections; and
• Adjudicating unfair labor practice claims.

While the Act is “patterned” after the NLRA, there is little case law interpreting it.  This comes as no surprise, as there have been only two petitions filed for unionization under the Act in the 30+ year history of the AERB.  The January 25th election was the first conducted by the AERB for an agricultural employer since 2000 when workers at a tomato production facility in Wilcox, Arizona successfully unionized.

Therefore, the UFCW will be plowing new ground as it turns its attention to organizing Arizona cultivation workers under the Act.  And what precisely does the AERB mean when it states the Act is “patterned” after the NLRA?  Will AERB follow the Board’s lead and aggressively pursue initiatives to expand worker protections and make it easier for unions to organize or will AERB take a more neutral approach to union organizing?  The current AERB has five members with four vacancies.  Of the five members, two are public members, two are agricultural employer representatives, and one agricultural labor representative.

The UFCW’s new focus on organizing cultivation workers under the Agricultural Employment Relations Act significantly widens the union’s potential reach.  But unlike the retail setting where union organizers have ready access to workers, unions have significant challenges in even reaching those employees.  Therefore, employers can expect unions to employ very different strategies for organizing cultivation workers.

Cannabis employers with large cultivation workforces should consider this new union strategy and work to ensure that their on-site supervisors are trained how to address potential organizing.  With increased organizing in industries such as cannabis, it is more critical than ever for employers to take a proactive approach to remaining issue-free.  Bianchi & Brandt’s attorneys can help employers stay ahead of these issues.