PORTSMOUTH, R.I. — One of Rhode Island’s longest-running marijuana dispensaries has filed suit over the state’s budding cannabis legalization law, challenging a requirement that retailers enter into labor agreements with workers in order to sell marijuana.
Greenleaf Compassionate Care Center claims it was “coerced into entering an oppressive collective bargaining agreement” because of the state law, which passed in 2022.
The Rhode Island General Assembly legalized cannabis last year with an expansive law called the Rhode Island Cannabis Act. It allowed people to legally possess and grow marijuana for recreational use, expunged existing marijuana convictions, and also set up a process for retail sales.
Tucked into the 125-page law is a provision that dispensaries — including those that existed before the law passed — enter into “labor peace agreements” with a “bona fide labor organization” in order to be licensed to sell cannabis by the state of Rhode Island.
Greenleaf has been open in Portsmouth, a town on Aquidneck Island, since 2013, when only medical marijuana was allowed. Existing medical dispensaries like Greenleaf were allowed to start selling recreational cannabis in December 2022, but had to first seek a hybrid license from the state.
In the lawsuit, which was filed Monday in U.S. District Court in Rhode Island, Greenleaf claims the business had “little bargaining leverage” with the workers, who voted in 2021 to organize under the United Food and Commercial Workers Local 328.
The workers at Greenleaf had already voted to unionize in 2021, prior to the law taking effect. But negotiations were still ongoing when the new law passed in May of 2022.
According to a press release issued by the union at the time, the collective bargaining agreement reached in August 2022 gave the workers higher wages, the ability to earn tips, paid vacation, a clothing allowance and a $1,000 bonus. Organizers hoped it would set a precedent for other cannabis workers to unionize.
The collective bargaining agreement covers workers such as “budtenders,” delivery drivers, and more.
The union’s lawyer, Marc Gursky, disputed the premise of Greenleaf’s lawsuit, since the dispensary was already in negotiations for a collective bargaining agreement before the new law requiring a labor peace agreement took effect.
“A labor peace agreement is about access, so that a union has a fair chance of organizing a workplace in exchange for giving up a right to strike,” Gursky told the Globe. “Greenleaf never entered into a labor peace agreement.”
In an email to the Globe, Greenleaf’s CEO Seth Bock acknowledged that the negotiations were already underway, but argued as soon as the new law passed, “we realized that we lost all of our bargaining power.”
“You either meet their demands and obtain a peace agreement or you go out of business under Rhode Island law,” Bock said.
One of the “unfavorable” terms of the contract that Greenleaf listed in the suit is the $1,000 bonus given to workers.
State Representative Scott Slater, a Providence Democrat who sponsored the cannabis law, said unions and activists had lobbied for the labor agreement requirement. The groups also successfully pushed for some cannabis licenses to be reserved for worker co-operatives.
“The push was for making sure the jobs that were created were good jobs and better paying jobs,” Slater said.
Daniel Denvir, an organizer for progressive group Reclaim Rhode Island, said the group wanted the new cannabis industry to benefit workers, “and not just rich owners and investors.”
“It seems absurd to me that the owner of a cannabis dispensary benefitting from a highly regulated, limited-supply cannabis license is objecting to a law simply because it ensures that their workers receive good wages, dignity on the job and the protection of the union,” Denvir said.
Asked if Greenleaf testified against the provision in the R.I. Cannabis Act when it was being considered last year, Bock said: “We lobbied against it but our understanding was that it was going to be a part of the bill no matter what.”
There are now seven licensed cannabis retailers operating in Rhode Island, including Greenleaf. They brought in a combined $8.9 million in the month of May, according to the R.I. Department of Business Regulation.
A spokesperson for DBR, which licensed the cannabis businesses, declined to comment on the lawsuit. Deputy DBR director Matthew Santacroce is one of the named defendants in the lawsuit, along with Erica Ferrelli from the Office of Cannabis Regulation.
The suit also names all of the members of the brand new R.I. Cannabis Commission, which will take over control of the cannabis licensing process. The group was just officially formed last month.
The UFCW Local 328 is also a named defendant.
Greenleaf is asking the court to declare the labor agreement requirement unconstitutional under the National Labor Relations Act, and to scrap the existing collective bargaining agreement with Local 328.