Dealin': Organized Labor Wants Its Piece of the Cannabis Industry 

Page 4 of 6

But there were limits to UFCW's clout. When the federal Justice Department started threatening dispensary operators and their landlords with prison time in fall 2011, the union had no answers. Hundreds of dispensaries across the state closed, and union jobs vanished along with them. In 2012, federal authorities raided Oaksterdam University's campus. Rush and some other union workers appeared at rallies denouncing the feds, but shied away from endorsing marijuana agitators' main message: that President Barack Obama was breaking a campaign promise to leave them alone. The union was playing smart politics, and while some members privately shared the cannabis industry's outrage, marijuana advocates felt jilted nonetheless.

Politics would annoy the cannabis industry yet again when UFCW sided with Los Angeles' political establishment to support a local ballot initiative there, Prop. D, that put a cap on how many dispensaries could operate in L.A. Under Prop. D, several hundred cannabis clubs would have to close. Union honchos preached the wisdom of playing ball and cutting deals, but some marijuana hardliners only saw more dispensaries shutting down. At the same time, UFCW worked to bring the survivors into its fold, organizing 30 of the remaining Los Angeles clubs.

Meanwhile, attention shifted away from California. With help from veterans of Prop. 19 as well as support from UFCW, legalization initiatives in Colorado and Washington passed in fall 2012. Soon, big-name Democrats including California Lt. Gov. Gavin Newsom, who had endorsed a no vote on Prop. 19, came out in support of cannabis legalization.

By that time, Rush was out of California, working on turning other states green. Some industry insiders and lobbyists say he overreached and angered superiors by going around them to directly lobby state politicians such as former Senate President Pro Tem Darrell Steinberg. Union officials say the UFCW intentionally shifted resources to other states. "California was such a mess," says Jeff Ferro, a top aide to the union's head of organizing, "that the work organizing was much more precarious [here] than in other states."

Then and now, California lacked strong statewide marijuana-industry regulations, which were all but demanded by federal Justice Department officials in a 2013 missive known as the Cole Memo. That made California a risky investment, for both capital and the union. So, rather than slog along in a ruleless California, UFCW would work in other states, such as New York, where it could play a role in writing the rules. The union's earlier successes did not go unnoticed. As The New Republic observed in 2013, "The UFCW has been an unseen force in nearly every big push to pass marijuana-friendly laws and ordinances in Western states."

But the union wasn't winning people over with the same ease it had in Oakland in 2010. When merchants in Denver opened their doors on New Year's Day 2014 to mark the first legal recreational marijuana sales in American history, not a single union worker could be found. Organizers blame Colorado's independent streak and less labor-friendly laws for being left out of the country's biggest recreational cannabis economy. By contrast, in the state of Washington, where officials reported average daily sales of $1.4 million per day and tax revenues twice what was expected, UFCW signed up its first shop last month.

In San Francisco, the union proved it could be an enemy as well as an ally. When a dispensary tried to open next to Mission Organics in 2011, the same union attorney at SF's lone union shop — the one who filed Debby Goldsberry's lawsuit — filed an appeal in opposition. It failed and the new shop, now affiliated with Sunset District-bred rapper Berner's Cookies brand, opened up. Still, the cannabis industry took notice and was disturbed.

Last fall, union honchos also pushed the city's Planning Commission to deny a permit for a second dispensary location for SPARC, one of the city's leading cannabis shops, which like other clubs is finding itself unable to meet the enormous demand for its products. (At the time, SPARC's executive director, Robert Jacob, was the mayor of Sebastopol in Sonoma County, and had apparently failed to return a political favor.) The SPARC permit was denied, no small setback in a city where medical cannabis dispensary permits are so valuable that existing permit-holders are reportedly entertaining — and rejecting — six-figure offers for their permits. As it happens, the only dispensary that succeeded in securing a medical cannabis dispensary permit despite organized neighborhood opposition was the union-backed Mission Organics. Still, the episode led some to loudly question UFCW's purpose.

"They haven't really hit their stride in providing benefits to their members," says Brendan Hallinan, a San Francisco attorney who specializes in cannabis businesses, including one dispensary that agreed to sign up with the union, only to have organizers disappear until after their permit was won. "They were, I hate to say it, disorganized," Hallinan says. "I have yet to hear anybody say that they received much benefit from being in the union."

UFCW is far from all-in on marijuana. The union just got around to endorsing Oregon's legalization initiative, Measure 91, a mere few days before voters approved it last fall. A month later, in his farewell message to members, outgoing UFCW Local 5 President Ron Lind ­­— whose shop was the first to organize cannabis workers ­­­— only mentioned cannabis in passing. UFCW's most recent victory in California came last year, when workers at the Oakland location of Bhang Chocolates, one of the nation's leading edibles companies, signed their union cards. But since then, UFCW has stepped back from worker-oriented organizing and zeroed in on changing policy in Sacramento. There, the union is working — just as it is in other states — to ensure it will have a piece of the cannabis industry, especially if there's a legalization measure on the ballot next year.

It is Jim Araby's job to provide that assurance. A goateed former grocery store worker from Boston, Araby is the executive director of UFCW's Western States Council, an umbrella group responsible for pushing pro-union policies in four states including California. In addition to backing labor's push for a $15 minimum wage and for better pay at the bargain grocery chain El Super, Araby and the UFCW are concerned with cannabis.