How the Move to Unionize Cannabis Workers Stalled in Colorado

April 4, 2016, was a big day for Matt Hobson — and it was very nearly a big day for Colorado’s cannabis industry.

That was the day that 29-year-old Hobson and other employees at Pueblo West Organics, a medical and recreational marijuana dispensary in Pueblo West, a municipal district just outside of Pueblo, presented their manager with a request for collective bargaining at their morning staff meeting.

Hobson and his colleagues were upset that wages were capped at forty hours a week, with no overtime pay. They were frustrated that management had begun taking the store’s tip-jar money without posting the public notice required of Colorado employers who collect gratuities.

According to Hobson, he hadn’t been given a vacation day or any other employment benefits since he’d started working at the business nearly a year earlier. “I was there for maybe a month before I started thinking this was an industry that needed a union,” Hobson recalls.

In March 2016, Hobson had finally contacted UFCW Local 7, the Colorado and Wyoming-based chapter of the United Food and Commercial Workers union, which he’d heard was trying to organize cannabis workers. With the help of a union organizer, Hobson persuaded seven of the shop’s ten employees to sign a collective-bargaining petition, the first step in organizing a company’s workers. The next step, he hoped, would be an employee election officially recognizing the union. Organizers believed that if it all worked out, Pueblo West Organics would be the first unionized marijuana business in Colorado.

Instead, everything fell apart.

Two days after the meeting, the store manager told Hobson that he was being fired for a cash-register error made several weeks earlier. It was a mistake that Hobson had reported at the time, a common error that he says others had made with no major repercussions. The manager also told Hobson he was banned from all Pueblo West Organics properties (the company has grows and a production facility in addition to the single dispensary).

Hobson was surprised, but he still had a chance to make it all work out. According to labor law, the union election would still happen — and Hobson’s vote would count if there was a tie. Once the shop was organized, he figured, his termination would be reversed.

But over the next three weeks, Hobson says, store management pressured several of the remaining employees to reconsider their stance.

Management at Pueblo West Organics declined to be interviewed for this story. But in a National Labor Relations Board position statement filed last year, the company declared that it had fired Hobson for performance reasons, not for union activities.

“I went into the entire matter thinking that the union was the last bastion of worker protection.”

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Another former Pueblo West employee corroborates much of Hobson’s version, however. This worker asked to remain anonymous, to preserve relationships in the industry. “We were mad, we were angry” about Hobson’s firing, the employee says. “We knew why he was fired. There was absolutely no other reason. He wasn’t a problem, he didn’t steal anything. He was the ringleader, so he got fired.”

When it came time to vote on April 26, 2016, only three of the shop’s ten employees voted to join the union. That meant that Hobson’s vote wasn’t counted. And he never got his job back.

In retrospect, Hobson blames the failure of his organizing effort on a number of factors: combative management, state policies that minimize worker protections, and an unmotivated and apprehensive industry workforce. He also faults the union organizers who’d promised to help him.

“I went into the entire matter thinking that the union was the last bastion of worker protection and that we would have the security and muscle of the union behind us,” he recalls. But thinking that, he says now, was a big mistake.
Organized labor has recently scored one victory after another in the cannabis industry. Between the UFCW leading the charge with its ambitious Cannabis Workers Rising campaign and other unions such as the Service Employees International Union (SEIU) and the Teamsters angling for a piece of the action, union officials say there are now thousands of marijuana workers under union contracts from coast to coast.

Although no hard numbers are available, the UFCW claims it represents “tens of thousands of cannabis workers across multiple states,” reportedly representing workers at Vireo Health in upstate New York, Minnesota Medical Solutions in Minneapolis, Natural Rx dispensaries in New Mexico and Wonderland Caregivers in Los Angeles, among other establishments. The SEIU represents workers at Columbia Care, one of New York’s highest-profile medical cannabis dispensaries. In California, the major unions are helping shape regulations in Sacramento and signing agreements with cannabis companies around the state.

But that’s not the case in Colorado. Nearly four years after the opening of the state’s retail cannabis industry, labor organizers have yet to deliver a single union victory anywhere here.

Why has labor failed to make inroads in the state at the epicenter of the adult-use cannabis industry? The answer can be found in a mix of factors: crumbled political alliances, firings and anti-union retribution, a leading organizer who came to embody every negative union stereotype, and broken promises on all sides to struggling workers like Hobson.
The first efforts to unionize cannabis workers took root where the industry began, in Northern California. In 2010, hundreds of medical marijuana industry workers voted to join labor unions in and around Oakland.

Much of that organizing was done by Dan Rush, a brash, chain-smoking, motorcycle-riding organizer for Oakland’s UFCW Local 5. Rush had an epiphany in 2009 when he read Proposition 19, which aimed to legalize recreational marijuana the following year. “It dawned on me that I had seen an economic revitalization of Oakland’s skid row due to the cannabis industry,” says Rush, who lived a mile from Oaksterdam, the pioneering cannabis education center.

Rush realized that the cannabis industry could be uniquely hospitable to labor organizing. For starters, cannabis workers could surely use the help. In the nascent industry, there’d been little in the way of employee training or workplace protections, despite the risk of hazards like exposure to pesticides, mold and dangerous chemicals. (Earlier this year, the Colorado Department of Public Health and Environment released a marijuana occupational health and safety guide, the first of its kind anywhere.) And in a business that had little to no access to banking, not only did workers need to worry about handling large amounts of cash, but for most of them, benefits like health insurance, matching 401(k) plans or even direct-deposit payments were a pipe dream.

At the same time, the trailblazers launching these businesses were, by and large, socially liberal. They might be amenable to worker-led reforms, and labor organizers had a shot at organizing these operations by working with managers through a top-down approach rather than by the more contentious bottom-up strategy, in which workers and management are pitted against one another.

The unions, for their part, needed the new blood. Beset by political hostility, private-sector crackdowns and the shifting nature of the American workplace, organized labor has been on the decline for decades. Union workers now make up just 10.7 percent of the U.S. workforce, down from 20.1 percent in 1983.

The UFCW offered the industry players behind the Proposition 19 campaign a deal: In exchange for local businesses allowing their workers to unionize, the UFCW would campaign for passage of the measure. But when election day arrived, Proposition 19 failed.

Despite the loss, the UFCW didn’t give up on marijuana. In 2011 the UFCW International, the organization that oversees the union’s 1.3 million members, launched a formal cannabis-organizing program and put Rush in charge. He moved to Washington, D.C., and set his sights on Colorado, which was in the middle of a dispensary boom.

“It seemed like he was in it more for the politics than the people he was representing.”

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“We started off great,” remembers Rush. He toured Colorado with industry pioneers like the Stanley brothers, developers of the Charlotte’s Web strain, and Tripp Keber, CEO of Dixie Elixirs. Rush also took part in weekly conference calls with local advocacy groups that were planning what would become Amendment 64, Colorado’s legalization initiative.

Soon, says Rush, he’d secured neutrality agreements with roughly three dozen medical marijuana businesses in Colorado, meaning that those companies wouldn’t oppose the union’s attempt to organize their workers.

The momentum didn’t last. Although the UFCW scored more than a dozen neutrality agreements in Fort Collins by actively campaigning against a dispensary ban there, when that ban unexpectedly passed in November 2011, tensions flared as the shops that the union was planning to organize were forced to shut down.

“It kind of turned everybody against everybody,” Rush says. “The employers didn’t see any value to the union, since they figured the union should have been able to help them win.”

Shortly after that, Rush told a meeting of Colorado cannabis-business owners that it was time for them to make good on their neutrality contracts and proceed with union elections. The owners balked. “Some of them out of fear, some of them out of greed, began trying to get out of the union process,” Rush says.

Part of the problem was that Colorado has long harbored a libertarian, anti-union bent. In 1914, the state was the site of the Ludlow Massacre, one of the bloodiest labor clashes in U.S. history. In 1943 it passed the Colorado Labor Peace Act, a law that makes the state one of the hardest places in the country to win union elections. Other states, by contrast, have built organized labor into their legalization laws. The legislation creating New York State’s MMJ system, for example, required medical marijuana companies to sign labor peace agreements, which require employers to not resist organizing attempts by employees. As a result, all New York dispensaries entered into agreements with either the UFCW or the SEIU.

In Colorado, Rush’s efforts were further hindered by the fact that no one knew whether the National Labor Relations Board, the federal agency that investigates unfair labor practices and collective-bargaining disputes, would officially recognize cannabis-related unions in Colorado or elsewhere — an uncertainty that exists to this day.

But Rush also lays blame on UFCW International’s reluctance to commit the sort of funding needed to sustain a successful campaign. “There was a fair-weather component to the International,” he says. “There would be a memo that says, ‘The headlines say this is a popular campaign and our young members love it,’ followed by a memo reading, ‘The headlines are going against us. We look like the drug-dealer union.’”

That left the union’s local chapter, UFCW Local 7, responsible for picking up the slack. But local union officials had their hands full dealing with consolidations and store closures in the grocery industry. By spring 2012, the UFCW’s ambitious plans for Colorado were in tatters. Rush left the state to focus on marijuana-industry campaigns elsewhere, months before Colorado voters approved Amendment 64, creating the first regulated recreational cannabis industry in the world.

“In thirty years of being a political operative, I never felt such a loss,” says Rush.

But there’s another side to the story, say Colorado cannabis-industry stakeholders, one that involves accusations of bribes, extortion and money laundering by a union official. A union official named Dan Rush.
Something was not quite right about Rush, say local industry insiders, something that soured their relationship with the union. While Rush had an uncanny ability to score access to key political players, his brazen manner didn’t pair well with his tendency to promise things he couldn’t deliver.

“I personally got a little bit of a slimy feeling from Dan Rush,” says Kayvan Khalatbari, who co-founded the Denver Relief medical marijuana dispensary in 2009. “It seemed like he was in it more for the politics than the people he was representing.”

Khalatbari says his interactions with Rush left him feeling that the organizer “was up to no good.” That suspicion proved prescient when, in September 2015, a California federal grand jury indicted Rush for attempted extortion, money laundering and taking illegal payments.

According to the criminal affidavit and indictment, Rush had spun a startling web of dirty dealings. The indictment accused him of receiving kickbacks and other benefits from Oakland attorney Marc Terbeek in exchange for connecting the lawyer with medical marijuana and workers’ compensation clients. Using his position on the Berkeley Medical Cannabis Commission, Rush allegedly demanded a lucrative job from a local medical marijuana company. He was also accused of borrowing more than half a million dollars from Oakland medical marijuana entrepreneur Martin Kaufman, then engaging in money-laundering efforts to conceal the nature of his interest payments on the loan. When Rush couldn’t pay Kaufman back in full, he allegedly offered to provide union support for proposed dispensaries linked to the businessman in Nevada, while also indicating that he would sabotage worker-organizing efforts at those shops thanks to what a colleague described as “toothless” and “illusory” neutrality agreements that Rush would sign and then “bury.”

This past June, Rush pleaded guilty to fraud, receiving illegal payments and conspiring to engage in money laundering. He’s scheduled to be sentenced this month. “He deeply regrets those violations of federal law, and he accepts full responsibility for those actions,” says Rush’s lawyer, Michael J. Kennedy. “However, what he pleaded guilty to is much narrower than the original charges brought against him.”

As Kennedy notes, Rush pleaded guilty to charges related to his efforts to use money obtained from a marijuana entrepreneur to develop an assisted-living facility in California in 2010 — before he began organizing in Colorado. “Dan has always been 1,000 percent committed to unionizing the emerging marijuana industry,” says his lawyer. “There is nothing about the charges related to his efforts in Colorado at all.”

But according to his plea agreement, Rush was still engaged in actions related to the charges after he began working to organize in this state.

The UFCW had previously demoted Rush in a management shakeup; it immediately terminated him after his indictment. But the damage was done. If marijuana business interests in Colorado were already skeptical of the union’s efforts, now they had every reason to stay as far away from the UFCW as possible. “Maybe we gave Dan too much responsibility without the tools to be successful,” says Jeff Ferro, a longtime UFCW International campaign manager who’s run the union’s cannabis efforts since 2012.

Did the upheaval Rush left in his wake hurt organizing efforts in Colorado? “It’s hard to say,” says Ferro, “but I imagine it did.”
Under Ferro’s polished and professional leadership, the UFCW rebranded its cannabis organizing effort as the Cannabis Workers Rising program. Now Ferro spends most of his days traveling from one state cannabis campaign to another, collaborating with a team of organizers, attorneys, lobbyists and communications experts in what he calls a “full-circle campaign”: working in states that are developing cannabis legislation and regulations to ensure that the laws include elements like worker-safety standards and labor peace agreements.
His organizers are teaching both employers and employees the basics of collective-bargaining agreements. UFCW officials are also enticing businesses with the option of joining the union’s national health-care and pension funds, which provide comprehensive benefits for workers and managers alike.

Those efforts are paying off. The UFCW says it now has thousands of cannabis workers under union contracts, plus tens of thousands more who claim UFCW representation but haven’t formally voted to ratify a contract.
Over the past year, the UFCW has announced new contracts in New Mexico, California, Minnesota and New York. Other organizations, such as the SEIU and the Teamsters, are also beginning to organize cannabis workers. Unions are jockeying for influence in California’s projected $7 billion recreational marijuana industry, since regulations there also require cannabis businesses to sign labor peace agreements. The UFCW is developing a marijuana apprenticeship program in San Francisco and joining forces with cannabis advocacy groups in Los Angeles, while the Teamsters are lobbying to secure first rights to transport marijuana around California. Last week, Ferro and three other union representatives were appointed to California’s 22-member Cannabis Advisory Committee, which will help develop the state’s recreational marijuana regulations.

In the meantime, organizing in Colorado has become an afterthought.

Matt Hobson didn’t realize that until it was too late.

“He wasn’t a problem, he didn’t steal anything. He was the ringleader, so he got fired.”

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To the union’s credit, Hobson says that UFCW lawyers were pivotal in helping him file and navigate NLRB unfair-labor charges against Pueblo West Organics for wrongful termination. After Hobson’s firing, according to those charges, Pueblo West Organics “interrogated employees about their union sentiments,” “made coercive disparaging statements and threats of bodily harm to employees engaged in protected concerted activity” and “threatened employees with discipline, lawsuits, termination, and other unspecified reprisals for their union activity.”

The former Pueblo West Organics worker who spoke with Westword confirms that store management contacted staff members about the union vote, but this particular employee didn’t feel interrogated or threatened. “After that [initial meeting], management started sending out emails about the reality of the union,” the ex-employee says. “Frankly, they started to change my mind. I remember they called several of the people who were on the fence and tried to get them to change.”

In October 2016, Pueblo West Organics entered into a settlement over the charges. The settlement was not an admission of any violation of the National Labor Relations Act; instead, the agreement included back pay for Hobson, and a pledge to post and disseminate a notice of federal labor law and labor rights. The company also agreed to set aside the results of the April 2016 union vote and conduct a rerun election. Pueblo West hasn’t disclosed the exact result of that vote, but the company’s employees are not currently represented by a union.
The same UFCW lawyers helped Hobson appeal the state’s rejection of his unemployment benefits, ultimately winning unemployment pay four months after he was fired.

But Hobson says the UFCW Local 7 organizers who had helped him begin organizing largely lost interest after he was fired, doing very little to assist him in finding a new job. Instead, they appeared keen on having him try to return to his old position, despite the fact that he no longer felt comfortable there. “They wanted me to go back to that horrible environment to try to hand them a victory,” he says.

To Hobson, local organizers seemed more concerned with organizing efforts at Denver-based Organa Labs, the company behind major cannabis brands like O.penVAPE. But eventually that campaign failed, too. According to unfair-labor charges filed with the NLRB last June, one Organa Labs worker was immediately terminated upon filing paperwork to unionize the 26-employee shop, while another was subjected to a “hostile campaign calculated to ostracize and isolate [him or her],” “violent and profane outbursts” and “treatment that, at times, has been so violent as to cause [the individual] to fear for [his or her] safety and well-being.” Organa Labs, which settled the case late last year, declined to comment on the matter for this story.

According to Ferro, UFCW Local 7 organizers working on the Pueblo West Organics and Organa Labs campaigns “decided to make a run at it” without major logistical support from UFCW International.

Ferro acknowledges the pain that Hobson’s been through. He’s seen it before, and it’s never easy.

“Any worker who gets terminated with cause or without cause is not happy with anybody, and I don’t blame him,” Ferro says. “If we had a collective-bargaining agreement in place, we could have had a say in what happened with Matt. Because we did not have that, the tool we had was the NLRB, and he prevailed there.

“I’ve had a lot of these cases where I would like to see a worker come back to work because it can show the power of the union,” adds Ferro. “But that can be a hardship.”
Would unionizing cannabis workers really improve their lot in Colorado?

Denver Relief’s Khalatbari, an outspoken critic of many of his colleagues’ business practices, doesn’t think so. “Minnesota, New York, Florida — those are markets where I would worry about employees. They have very limited licensed operations,” he says. “But I personally believe that most operators in Colorado, as much as I have issues with many of them from a social-impact standpoint, I think they do treat their employees pretty well, because they have to. Right now, in Colorado’s competitive market with uncapped licenses and Denver’s historic low unemployment rate, there seems to be a lot of opportunity for experienced workers to get a better job and better money if they don’t like the place where they work now.

“That said,” he adds, “I think the union conversation is a good one to have if workers start falling behind in this increasingly consolidated market.”

Khalatbari points to a recent study of Colorado marijuana workers by the National Cannabis Industry Association, Colorado State University and the Center for Health, Work & Environment at the Colorado School of Public Health that found the majority of workers were satisfied with their jobs and felt that their employers followed strong safety practices. “Granted,” Khalatbari adds, “I am not an employee. I am coming at this from an advocate and operator’s perspective.”

Marty Otañez, a cultural anthropology professor at the University of Colorado Denver, has spent years surveying Colorado cannabis workers and exploring workplace conditions. He draws a different conclusion.

Otañez has heard numerous complaints from employees: dangerous exposure to pesticides, powdery mildew and other safety hazards; lack of appropriate protective equipment; substandard pay and minimal job security. With cannabis companies consolidating and working together in powerful industry groups, he thinks one of the few options that workers have to remedy matters is to organize themselves.

“I am so tired of this discourse of cannabis companies embracing social responsibility,” says Otañez.
“Underneath this veneer of cannabis culture is this set of workers who are dissatisfied with their earnings and working conditions. Employers intimidate them, they hire anti-union consultants. It runs in the face of cannabis culture itself.”

Ferro aims to change that. A new Cannabis Workers Rising organizer recently set up shop in Colorado and is already working on union elections — though, Ferro says, “The local is not yet ready to go public” with the specifics of its efforts.

Hobson has advice for the new state organizers. “If they want success in the future, I would say preventing cases like mine would be a good start,” he says, sitting on the couch of the one-bedroom Pueblo apartment he shares with his wife, Jenna. The place is largely empty; the two have had to sell much of their furniture to get by. Hobson has been mostly unemployed since losing his job at Pueblo West Organics; he’s been turned down by so many marijuana businesses, he figures he’s been blacklisted because of his organizing efforts. And other employers don’t seem interested in hiring someone from the cannabis industry.

Two months ago, Ferro told Hobson that he’d help him find a job in a marijuana business in another state, but Hobson says nothing ever came of the offer. “It’s hard to say that there was an offer at all, just ‘maybes’ and ‘no promises,’” he recalls, “which are the only things that the union seems to offer in abundance.”

Even if Ferro comes through for Hobson, UFCW officials shouldn’t count on him to return to his fervent organizing days. “At this point,” he says, “I trust the UFCW about as much as the cannabis industry.”