The drop in retail cannabis sales in Washington followed two years of strong growth, largely fueled by the boost in sales associated with the COVID-19 pandemic and the resulting shutdowns of many businesses deemed nonessential. Like many other states with legal cannabis, regulators in Washington state designated marijuana retailers as essential businesses, allowing them to remain open for business during lockdowns. 

“From March 2020 to March 2021, legacy cannabis markets saw drastic increases in growth,” Headset wrote. “In the beginning months of the pandemic for example, Colorado’s total adult-use sales grew by 63% from February to July 2020.” 

During the same period, average monthly sales in Colorado grew by 25.8% compared to the year before, while in Oregon monthly sales grew by 36.6%. Brian Smith, a spokesperson for the Washington State Liquor and Cannabis Board, said that last year’s drop in sales is the result of post-pandemic economic conditions.

“What you’re seeing as a ‘dip’ is really sales returning to normal growth as more people returned to in-person work,” Smith said in a statement quoted by The Seattle Times.

The data showed a decrease in the frequency of visits consumers made to cannabis retailers and the amount of money they spent each time. Headset’s analysis showed that the average transaction recorded at licensed cannabis retailers in Washington dropped by almost three dollars, from $34.14 in July of last year to $31.41 in 2022.

Aaron Smith, co-founder and chief executive officer of the National Cannabis Industry Association, said that a decline in retail cannabis sales has also been documented in other states that have legalized sales of recreational marijuana. The Headset report showed that regulated sales of marijuana declined by nearly 10% in Oregon, while Colorado saw a drop in sales of more than 11%.

“This is not isolated to Washington state’s cannabis industry,” Smith told The Center Square via email. “We’re seeing similar trends across the country.”

High Taxes Hindering The Legal Cannabis Industry

Like many cannabis industry observers, Smith believes that retail marijuana sales are declining because taxes on regulated weed can be excessive compared to other industries, making cannabis available on the illicit market more attractive to consumers already facing higher prices on consumer goods because of international supply chain challenges.

“I believe the primary factor at play is inflationary pressure driving more consumers to procure cannabis in the underground, unregulated market,” Smith said. “Heavy taxes and regulatory burdens on our industry make it very difficult to compete with underground cannabis providers who pay no taxes at all and have no need to follow the state’s rules and regulations for producing and selling cannabis.”

Brian Fitzpatrick, chairman and CEO of Qredible, a cloud-based compliance platform for the cannabis industry, notes that taxes on cannabis in Washington are among the highest in the industry, totaling more than 46% in taxes when the state’s excise and sales taxes are combined.

“My fear is that this constant pressure from the significant taxes will cause companies to cut corners and cost in areas of quality and compliance just to compete with the illicit market,” Fitzpatrick wrote in an email to High Times. “The dangers of the illicit market are clear – they lack safety and regulation standards. If the government wants to promote safe and compliant usage, it should reconsider some relief on the excise taxes.”

The Washington CannaBusiness Association agrees that high taxes could be hindering the growth of the legal cannabis industry.

“On the margins, this high rate may be pushing some consumers to purchase their cannabis products from the unregulated, untaxed, illicit market,” the industry group said in a statement.

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Fifty-one percent of consumers choose products based on the desired effect, such as sleep, energy, chill or create. While potency is also a contributing factor, New Frontier Data’s newest report explored the end result of popular brand packaging appearances, and shared which ones people tend to prefer the most.

For this product survey, participants were asked if they seek out flower from particular brands or companies: 43% answered “sometimes,” 21% said “always,” 19% said “rarely,” and 17% answered “never.” Overall, 28% added that branding and packaging is “very or extremely important” when considering what to buy.

Six image varieties of flower packaging, with percentages of consumers who most preferred those packaging themes: Black Minimalist Jar (7%), Gold Jar (9%), Craft Paper Jar (14%) Mountain Landscape Jar (16%), Hippie Colorful Jar (17%), and Prescription White Jar (36%).

The Black Minimalist Jar is described as a common choice between a variety of age groups, but often chosen because it was “cool, modern, and masculine.” Those who preferred this jar usually spend between $50-$199 per transaction and are more likely to consume cannabis every day.

The Gold Jar was most popular with consumers over 55, describing it as “cool, natural, or modern.” Some described it as feminine, but it was slightly more preferred by men. Those who were drawn to this jar usually purchase between 3.5 grams to 14 grams per month, and tend to purchase about $50-$99 in a single purchase. This particular consumer is also more likely to consider topicals or transdermal products as their favorite.

The Craft Paper Jar featured a simple brown exterior with black text, which attracted consumers who like to consume cannabis in a social setting because it is “natural, authentic, and cool.” Those who are drawn to this packaging tend to buy $20-$99 worth of product in a single purchase. 

The Mountain Landscape Jar attracted younger consumers because it was “cool, natural, and authentic.” They were also the customers most likely to choose vaping as their primary way to consume.

The Hippie Colorful Jar was the most colorful of the bunch, which attracted medical cannabis consumers more than adult-use consumers, describing the jar as “cool, authentic, and modern.” Sixty-four percent of these consumers usually spend between $20-$99 in a single purchase, and prefer edibles over other consumption methods.

Finally, the Prescription White Jar was the most popular of all of these designs, appealing to all age groups and consumer types for its “medicinal, authentic, and natural” approach to design. Those who chose this tend to purchase more than one ounce of cannabis every month, and favored flower over all other product types.

New Frontier Data cites Harvard Professor Gerald Zaltman, an expert on marketing who is also a co-founder of consultant firm Olson Zaltman Associates, which has worked with some of the world’s largest brands. According to Zaltman’s book How Customers Think: Essential Insights into the Mind of the Market, 95% of purchasing decisions are subconscious, and 93% of people will “rely on visual cues when considering new products.”

With this in mind, New Frontier Data recommends a continued thoughtfulness when companies create their brand product identity. “As consumers become increasingly diverse and delineated in both their motives and methods for consumption, brands should aim to directly articulate how a given product suits a consumer’s goals, rather than settle simply for selling flower.

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Local news station WPRI, citing the state’s Department of Business Regulation, reported this week that “Rhode Island’s six marijuana dispensaries — five of which are currently authorized to sell to recreational customers — collectively sold just over $1.63 million worth of marijuana from Dec. 1 to Dec. 7.” 

“Less than half of those sales were for recreational marijuana, at about $786,000. The rest, about $845,400, were sales to medical marijuana patients,” the station reported. “For comparison, during the last week of October — the most recent full week available prior to recreational sales — the dispensaries collectively sold $1 million worth of medical marijuana.”

Rhode Island legalized recreational cannabis use in May, when Gov. Dan McKee signed a bill that was passed by lawmakers in the state General Assembly. 

The law made it legal for adults aged 21 and older to cultivate and possess marijuana, while also establishing the regulatory framework for cannabis sales. 

“This bill successfully incorporates our priorities of making sure cannabis legalization is equitable, controlled, and safe,” McKee, a Democrat, said in a statement at the time. “In addition, it creates a process for the automatic expungement of past cannabis convictions. My Administration’s original legalization plan also included such a provision and I am thrilled that the Assembly recognized the importance of this particular issue. The end result is a win for our state both socially and economically.”

Additionally, the law “will give courts until July 1, 2024, to automatically expunge past convictions, and those who want their expungement sooner may request it,” the governor’s office explained in a press release at the time.

Late last month, McKee and the state’s Department of Business Regulation’s Office of Cannabis Regulation announced that “five licensed medical marijuana compassion centers have received state approval to begin selling adult use marijuana on or after December 1.”

The five “compassion centers” that were given approval to begin adult-use sales are: Aura of Rhode Island (Central Falls); Thomas C. Slater Center (Providence); Mother Earth Wellness (Pawtucket); Greenleaf Compassionate Care Center (Portsmouth); and RISE Warwick (Warwick).

“This milestone is the result of a carefully executed process to ensure that our state’s entry into this emerging market was done in a safe, controlled and equitable manner,” McKee said last month. “It is also a win for our statewide economy and our strong, locally based cannabis supply chain, which consists of nearly 70 licensed cultivators, processors and manufacturers in addition to our licensed compassion centers. Finally, I thank the leadership of the General Assembly for passing this practical implementation framework in the Rhode Island Cannabis Act and I look forward to continuing our work together on this issue.”

Matt Santacroce, who is serving as interim deputy director of the Rhode Island Department of Business Regulation, said last month that the state was “pleased with the quality and comprehensiveness of the applications we received from the state’s compassion centers, and we are proud to launch adult use sales in Rhode Island just six months after the Cannabis Act was signed into law, marking the Northeast’s fastest implementation period.”

“We look forward to continuing to work with the state’s cannabis business community to ensure this critical economic sector scales in compliance with the rules and regulations put forward by state regulators,” Santacroce said. 

The launch of recreational sales on December 1 was only one change to Rhode Island’s existing marijuana policy to arrive this month. 

WPRI reported that, on the same day, “the state also stopped charging medical patients to obtain or renew their medical marijuana cards,” adding that “there is an expected revenue loss from the pending plan to expunge marijuana possession charges, which will eliminate court fees from those crimes.”

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Under the SAFE Banking Act, federal banking regulators would be prohibited from penalizing banks that choose to serve cannabis firms doing business in accordance with state law. Under current regulations, banks are subject to penalties under federal money laundering and other laws for servicing such companies, leaving the cannabis industry to operate in a risky environment heavy in cash. 

The legislation was initially introduced in the House in 2013 by Democratic Rep. Ed Perlmutter of Colorado, who has reintroduced the bill each subsequent congressional cycle. The bill has been passed seven times since 2019 by the House of Representatives, but each time the Senate has failed to bring the legislation to the floor for a vote.

Another amendment supported by cannabis policy reform advocates that would have given the states assistance with expunging past marijuana-related convictions also failed to make it to the final version of the defense spending bill. Before the latest text of the NDAA was released on Tuesday, Senate Majority Leader Chuck Schumer of New York told reporters that he was still working on getting the cannabis banking measure passed.

“It’s a priority for me,” Schumer said. “I’d like to get it done. We’ll try and discuss the best way to get it done.”

Republicans Balk At Adding SAFE To Defense Bill

But later in the day, Senate Minority Leader Mitch McConnell of Kentucky admonished Democrats for attempting to attach amendments not related to defense, including the SAFE Banking Act, to the spending bill.

“Even now, House and Senate Democrats are still obstructing efforts to close out the NDAA by trying to jam in unrelated items with no relationship to defense,” McConnell said on the Senate floor on Tuesday. “We’re talking about a grab bag of miscellaneous pet priorities — like making our financial system more sympathetic to illegal drugs, or the phony, partisan permitting-‘reform’-in-name-only language that already failed to pass the Senate this year.”

“If Democrats wanted these controversial items so badly, they had two years to move them across the floor. Heck, they could have scheduled those matters for votes this week. But no — we’re doing more mid-level nominations, while Democrats keep half-threatening to take our Armed Forces hostage over these extraneous matters,” said McConnell, adding “The Democrats’ failure to plan ahead for unrelated liberal pet priorities should not be creating uncertainty and confusion for the brave servicemembers who keep us safe. My colleagues across the aisle need to cut the unrelated hostage-taking and put a bipartisan NDAA on the floor.”

What’s Next?

The failure to include the SAFE Banking Act in the NDAA leaves the prospect of passing the cannabis banking legislation before the current Congress adjourns in two weeks unsettled. Morgan Fox, the political director for the cannabis policy reform group the National Organization for the Reform of Marijuana Laws, said that SAFE could be attached to a pending omnibus appropriations bill or perhaps be approved as standalone legislation.

“I’m glad that we still have other options,” Fox said Wednesday. “It’s pretty disappointing.”

“While there has been momentum and optimism around getting SAFE included in the National Defense Authorization Act, it has been known for some time that getting this through would be a challenge,” Sahar Ayinehsazian, partner at the cannabis law firm Vicente Sederberg LLP, wrote in an email to High Times. “The focus now is on the omnibus appropriations bill, which congress is currently negotiating. SAFE has growing support on both sides of the aisle and I, and many others in the industry close to this issue, think that there is a still a chance that movement can be made on SAFE via the omnibus bill during this session of Congress.”

The SAFE Banking Act is supported by a bipartisan coalition of lawmakers made up primarily of representatives and senators from states that have legalized medical marijuana or adult-use cannabis. The bill passed with overwhelming bipartisan support by a vote of 321-110 in the House last year, and senators from both parties are also in favor of passing the measure.

“The Senator is continuing to work every day to build consensus so we can pass “SAFE Banking” into law this year,” a spokesperson for Montana Republican Senator Steve Daines said in an email on Wednesday.

The senior senator from Montana, Senator Jon Tester, a Democrat, also said he “would like to see it pass this Congress.”

The banking bill is also supported by nearly two dozen governors in states that have liberalized marijuana policy. In a written statement, Conor Cahill, a spokesman for Democratic Colorado Governor Jared Polis, praised the work of Perlmutter and said he expects the legislation to pass this year.

“Governor Polis has long advocated for the passage of the SAFE Banking Act, and has repeatedly called upon Congress to pass this important legislation to protect cannabis-related businesses, support minority, women, and veteran-owned small businesses owners, create jobs, and strengthen public safety in Colorado communities and in the states,” Cahill wrote in a Tuesday email. “We hope and expect to see the final passage of his decade-long effort by the end of the lame-duck session.”

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According to New Frontier Data Senior Research Analyst Noah Tomares, the Michigan cannabis industry is evolving rapidly compared to mature markets such as California. “Perhaps the most notable difference in November was how Michigan’s product breakdown stayed similar throughout the month, where in 2021 they favored more edibles and cartridges right before the holiday,” said Tomares. “It’s striking how much more stable Michigan is in 2022 versus what it was ’21, and how much more it looks like California.”

Tomares also added that we’re beginning to see a shift in purchasing behavior as well. “In California, a relatively mature market, purchases remained largely consistent in terms of product breakdowns year-over-year. Michigan consumers last year gravitated towards more subtle or ‘family-friendly’ products such as cartridges and edibles: In 2021, those products spiked from 37% of transactions during the first week of November to 43% for the week of Thanksgiving. This year, the month looked much more normalized, with cartridges and edibles accounting for approximately 40%+ of sales during each week in November.”

New Frontier Data’s Chief Knowledge Officer, Dr. Amanda Reiman, suggests that cannabis normalization is likely the reason that sales aren’t highest on previously predictable days. “I think it’s normalization and increased access nationwide that is driving the change in holiday purchasing,” said Reiman. “Not only are people just more comfortable using their regular products in more places and with more people, but cannabis is available in more states, so there is not as much need to stock up before you go if you can get it wherever you’re headed. Many folks would likely rather wait and buy cannabis at their destination than to take it on a plane.”

Consumers spending time with family and friends on or around the Thanksgiving holiday is also a point to consider. New Frontier Data shared that 44% of consumers source their cannabis from friends or family, and 29% say that it’s their primary source of access. In some medical-only states, as well as those that still don’t have any cannabis legislation, family is the primary source of cannabis.

Previous data has shown that 68% of people consume with others, 21% consume with siblings, 19% with extended family members, 11% with parents, and 6% with their children. Additionally, 85% of consumers say that their family knows about their cannabis use, and 59% say that their family is supportive of consumption.

Thanksgiving-related consumption is also a common practice, where 40% spend time with family or spouses while consuming, 38% report pairing cannabis and eating, and 33% cook with cannabis.

Overall, Tomares believes that these activities will continue to become more normalized over the next few years. “We expect that as markets continue to mature and new markets come online, consumer preferences will become increasingly normalized, and acquisition of cannabis will become increasingly integrated into consumers’ daily routines,” Tomares said. “Already, 48% of consumers report just visiting a dispensary after they run out, as opposed to planning a dedicated trip. With new markets opening with lower barriers to acquisition, consumers may feel less pressure to purchase cannabis before travel or social events. As this plays out, we may see some unofficial holidays playing a less significant role in consumers’ purchase decisions.”

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But beginning last week, some of the biggest ATM transaction processors including NCR Corp.’s Columbus Data Services have shut down the ability of cashless ATM transaction processors to use their service, according to unidentified sources cited by Bloomberg. NCR declined to comment on the situation, according to the report.

“This is a pivotal point in cannabis banking,” Ryan Hamlin, chief executive officer of payment technology provider Posabit Systems Corp., told Bloomberg about the cashless ATM shutdowns.

Notice Given Last Year

Late last year, international payment processing giant Visa announced in a memo to retailers that it “was aware of a scheme where POS devices marketed as ‘Cashless ATMs’ are being deployed at merchant outlets.” 

The system worked by rounding up purchases, often to multiples of $20, to make the transaction appear to be cash disbursements. Instead, only the change from the transaction would be returned to the customer, and the dispensary would keep the rest to cover the payment for the purchase.

“Cashless ATMs are POS devices driven by payment applications that mimic standalone ATMs. However, no cash disbursements are made to cardholders,” the December 2021 memo continues. “Instead, the devices are used for purchase transactions, which are miscoded as ATM cash disbursements. Purchase amounts are often rounded up to create the appearance of a cash disbursement.

In April, Bloomberg reported that cashless ATM transactions were able to be processed because they were disguised by listing an address of a nearby business such as a fast food restaurant instead of the actual dispensary address. An estimate put the portion of cannabis sales processed through cashless ATM transactions at 25% of the $25 billion in projected annual dispensary sales.

“Those sales could generate more than $500 million in fees for payment processors, based on average purchase sizes,” Bloomberg reported.

Banking Laws Hinder Legitimate Cannabis Businesses

The popularity of cashless ATM transactions is indicative of the difficulty federal regulations pose for cannabis businesses, even those operating legally under state law. Federal banking and money laundering laws put restrictions on the banking industry, making it difficult for financial institutions to provide traditional services such as credit card processing, loans, and deposit and payroll accounts. But cashless ATMs fail to pass muster with the federal regulations.

“The cashless ATM trend is damaging to investors, dispensaries, and consumers, as when it comes down to it, it’s blatant money laundering,” CannaTrac CEO Tom Gavin told High Times. “Instead of creating loopholes and using a cashless ATM, dispensaries should take advantage of other solutions currently on the market that are safe, legal, and transparent. A proper financial solution should be registered with FinCEN and have a money transmitter license, or be the agent of a sponsor or bank with a money transmitter license in their state.”

Hamlin of Posabit said that signs of the cashless ATM shutdown began to appear in November and increased last week. He estimated that by the end of the weekend, only about 20% of the cannabis industry was still able to use cashless ATM payments.

Cannabis dispensaries in Arizona, California, and Massachusetts have reportedly been affected by the shutdown of cashless ATM transactions, with employees at those shops recommending that they pay for their purchases with cash instead. Curaleaf Holdings, one of the largest cannabis retailers in the United States, reported in April that approximately one-third of the company’s dispensary transactions were processed through cashless ATMs.

“It’s left merchants in the lurch because it happened overnight, but the writing has been on the wall for a while now,” said Peter Su, a senior vice president at Green Check Verified, a consulting and software company that specializes in cannabis and banking.

Sahar Ayinehsazian, a partner at Vicente Sederberg LLP and co-chair of the law firm’s Banking and Financial Services Access Group, said that the shutdown of the cashless ATM system illustrates the need for the passage of legislation now pending before Congress that would allow legal cannabis businesses access to banking services.

“This shutdown further underscores the ongoing need for banking and financial reform for cannabis businesses and the passage of the SAFE Act,” Ayinehsazian wrote in an email to High Times. “While there can be no guarantee that the Act will open up payment processing for cannabis operators, the industry is very optimistic that its passage will facilitate access to legal and legitimate cashless payment options for cannabis operators.”

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Ayr Wellness, which has dispensaries operating in Arizona, Florida, Massachusetts, Nevada, New Jersey, and Pennsylvania, announced on Dec. 5 that it would be starting its “12 Days of Giving” campaign. While every purchase at its dispensaries will collect $1.12 per transaction to two of its partner organizations, Freedom Grow and Minorities for Medical Marijuana Project Clean Slate Initiative. Overall, Ayr Wellness aims to reach a goal of collecting more than $100,000, which will go toward supporting cannabis prisoners and their families, as well as various advocacy efforts and expungement programs. “Ayr’s ‘12 Days of Giving’ initiative aims to reinforce our commitment to being a Force for Good by activating twelve days of charitable giving across our retail footprint,” said Ayr president David Goubert. “This marks Ayr’s second year of the program, which is poised to directly benefit the families of those who have been incarcerated for cannabis offenses.”

Florida-based AFC Foundation, which offers financing in the cannabis industry, recently made a donation to Georgia-based Corners Outreach organization. In the past, AFC Foundation has also contributed donations to groups like Pennsylvania Court Appointed Special Advocate Association, Yo Soy Ella, and The Weldon Project. According to AFC Foundation president and co-founder Robyn Tannenbaum, it’s essential for the company to give back. “The evolution of the cannabis industry is heavily reliant on the health of the communities in which the businesses operate. As a result, it is imperative that we work to improve these communities and invest in their future endeavors,” said Tannenbaum. “We are proud to continue our efforts to enact social change. More importantly, we are excited to support an organization like Corners Outreach that works to improve education and career opportunities for families.”

In November, Michigan-based Puff Cannabis gave out more than 1,700 turkeys prior to Thanksgiving. Now, the brand announced its “Jackets for Joints” event. Running between Dec. 5-18, the campaign is asking for coats and jackets that fit kids between the ages of three to 12. In exchange, Puff is giving out one jar of pre-rolls. Puff president Justin Elias expressed the need for kids in Michigan. “I recognize that due to the times we live in, many children throughout the state of Michigan need warm jackets and coats and our ‘Jackets for Joints’ program will come to the aid of many of those little ones,” Elias said. “I hope we can collect and give away thousands of warm jackets and coats this winter in order to keep our children warm.”

40 Tons, which is an organization dedicated to assisting people affected by cannabis convictions, as well as their families. This past weekend, the organization held a Canna Christmas event that invited attendees to donate to a Christmas wish list created by people who have a loved one currently incarcerated for cannabis. Although the event has already passed, 40 Tons is a worthwhile organization to donate to this holiday as it continues to help others.

A medical dispensary in West Virginia called Cannabist recently donated $6,473.65 to its local American Legion Post 159 last week. Cannabist has four locations in the state, and took a portion of funds from weekly sales that will go on to fund scholarship opportunities for local high schools, provide funds for state capitol trips, and more.

We’re seeing tons of cannabis businesses giving back, but non-cannabis businesses are also pitching in to help patients with access to medical cannabis, too. According to Lanakshire Live, a Scottish news outlet, local businesses are stepping up to help Cole Thompson, a young boy who suffers from cortical dysplasia and uses Bedrolite cannabis oil to treat his condition. Like many other children throughout Europe, access to medical cannabis medicine is an expensive strain on their families. 

A campaign called “Cole’s Christmas Wish” is currently underway, asking for donations to help fund his family’s access to the medicine. “An amazing 15 businesses have signed up already, but for it to work we really need to get the full 36 businesses signed up, hopefully by Christmas, which would give Cole the money for his medicine for the year,” said Cole’s mom, Lisa Quarrell. “We are still looking for 21 businesses who are willing to get on board by donating a one-off payment of £500 to keep Cole seizure-free and safe.”

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Following the November 2022 elections, 21 U.S. states have legalized cannabis for recreational use, many of them now entrenched with a full-blown cannabis commerce. This rapidly expanding industry is populated with thousands of productive and ambitious workers, many of whom actively seek to organize or have already created union partnerships in their workplace. 

Anywhere from 30,000 to 40,000 cannabis industry employees are estimated to be unionized across America. 

UFCW UNITING WITH THE CANNABIS INDUSTRY

Some California cannabis employees are part of UFCW—United Food and Commercial Workers—the largest cannabis workers union in the country, representing over 10,000 employees nationwide. 

UFCW Local 5—which presently represents over 500 weed workers across the famed “Bay Area” of Northern California—is branching out beyond representing dispensary workers, as in June 2021, when UFCW brokered a historic first-ever agreement to unionize workers at both a California-based cannabis manufacturer, CannaCraft Manufacturing, and at a cannabis lab, Sonoma Lab Works. 

We were fortunate to speak in-depth with Jim Araby, Director of Strategic Campaigns for UFCW 5. When asked about what both the individual weed worker and the collective cannabis industry gain from unionization, Araby elaborated:

“The worker benefits are very clear, such as the difference between union and non-union wages in the companies we’ve organized in the Bay Area. DIspensary workers and delivery drivers are making $3-to-$4 more per hour than their non-union equivalents.

“Also union workers are not subjected to ‘at-will’ hiring-and-firing, instead, they have to go through an actual process for ‘just cause’ so if they get fired for some reason, there’s a procedure in place, whereas non-union workers just get fired immediately under the ‘at-will’ law.

“The other big thing is; with the way the cannabis industry is now, in terms of there being a lot of large mergers and acquisitions happening, I think workers are protected in such spaces if they organize. When the High Times (retail sector), Have a Heart and Harvest merger occurred a couple years ago (2020), we were able to protect workers and keep their jobs. 

“In terms of labor-management partnerships, we can lobby with legislators in order to create a more streamlined regulatory process so that businesses can expand and thrive, and workers can get a piece of that. And we’re focused on labor management partnerships and fighting companies that don’t recognize labor’s right to organize.”

Araby discussed the significance of cannabis unionization: “Because there’s going to be tens of thousands of people who work in the industry, and if workers don’t have rights, if they don’t have a voice, it’s going to end up the same way that every non-union industry is, where big corporations are going to control the wages and benefits of workers in this industry.

“But with the unions having a foothold as this industry grows, it at least gives workers and the communities a much more sustainable industry both in terms of what the community can expect, and ultimately, what workers can expect.

“We organized CannaCraft—a cannabis manufacturer based in Santa Rosa, CA—last year and that was pretty significant because, at the time, that company was going to unilaterally issue 20 to 30 percent pay-cuts for everybody and we were able to stop that. We were also able to use a smoother approach and bargain in good faith with the company to maintain most jobs at the plant as well as being on the pathway to create Cal OSHA—the Occupational Safety and Health Administration—standards.” 

TEAMSTERS TEAMING UP WITH WEED WORKERS

Workers at Tikun Olam, a cannabis cultivation facility based in the California city of Adelanto, gave themselves an early Christmas gift on December 22, 2021 when they voted unanimously to ratify a labor agreement with Teamsters Local 1932. This act gave Tikun the distinction of being the first unionized cannabis facility in the Inland Empire, the massive metropolitan region adjacent to coastal Southern California. The collective bargaining agreement (CBA) was approved after Tikun workers voted in the majority to unionize. Beyond the contract, the company and Teamsters 1932 agreed to partner to provide training opportunities through apprenticeships with Tikun and the industry as a whole. 

Regarding this development, High Times was able to reach out to not only Abraham Gallegos, Business Agent Organizer for Teamsters Local 1932, but also Kenneth P. Ocean, Cultivation Technician at Tikun Olam, who graciously provided the workers perspective for this article. 

Mr. Ocean explained the process that led to his company joining Teamsters: “I was with the company for about six months before we voted to unionize about a year ago. It won unanimously; one hundred percent of us wanted to go this way. Being unionized gives us job security to not getting fired instantly, as well as giving us an opportunity to have a career in this business.

“The management here was having struggles and miscommunicating as far as procedures, so we felt a union could help us a lot more in every direction, including obtaining safety equipment that we needed to have on hand to do our job properly. We also get benefits from the union. Plus, the products we produce are ten times better now that we’re with the union.”

Abe Gallegos of Teamsters confirmed this: 

“Tikun Olam went for months without generating revenue. It had huge turnover with constant firings and crop failures. But since unionization this team has been producing great cannabis here in Adelanto. It’s been a complete 180 degree turnaround at that cultivation facility.

“Fortunately, here in California we have a Labor Peace Agreement (LPA) law, which means any company with ten or more employees has to sign an LPA to get their business licensing in California, which prevents them from engaging in union-busting.”  

In the legal city of Chicago, in March 2022, Windy City weed workers at not one but two cannabis retail store locations—in the Logan Square and River North neighborhoods—both voted unanimously to enter into a CBA with Teamsters Local 777. This was particularly significant because it was the first two Teamster contracts in the cannabis industry in the state of Illinois. 

Concerning this unionization, High Times was fortunate to extensively interview Jim Glimco, President of Teamsters 777, and he shared: “We negotiated a fantastic agreement at Modern Cannabis (MoCa) that covers two locations. What’s exciting about this industry is that we have momentum on our side; cannabis workers throughout Illinois are hearing about what’s happening and asking how they can sign up. The level of enthusiasm I’ve seen from workers in this industry is really exciting.”

Glimco discussed the importance of unions:

“For workers, the benefits are obvious; a union gives them better wages, better benefits, greater job security, a safer workplace, a voice on the job and so much more. For employers, there are also a number of benefits; a CBA implements a very clear set of guidelines into a workplace, which creates a certain level of operational stability for management. Union shops have lower turnover, so those employers are able to expend less resources on recruiting talent. 

“For cannabis specifically, given the ugly and tragic history of its criminalization, I think it’s important to consumers that employers demonstrate a commitment to social justice. When employers allow the process of unionization to play out fairly and bargain in good faith, it demonstrates that they’re serious about this, and their customers appreciate it.”

In June 2022, drivers and fleet maintenance workers at the Los Angeles-based cannabis distribution company Nabis Cannabis voted in the majority to enter into a CBA with Teamsters Local 630. Similar to the CBA at Tikun Olam, this particular labor agreement carries extra weight because it is a sign that unionization is moving beyond merely representing retail companies.

Matt McQuaid, Communications Project Manager with the Teamsters’ Dept. of Strategic Initiatives, told us: “Teamsters represent around 500 members working in cannabis nationwide in legal states like Illinois, California and Massachusetts.”

Further, McQuaid confirmed that it was “exciting” that the Teamsters were representing Nabis, a distribution company, adding: “That was cool because unfortunately a lot of agricultural workers don’t have collective bargaining rights in some parts of the country. But in California, they do.”

THINK TANK, UNION DANK

In September 2021, Washington D.C.-based nonprofit think tank the Economic Policy Institute issued a report entitled “Ensuring the high road in cannabis” that argued for strong unionization within the rapidly expanding legal-use industry. 

The report posits a “low road” scenario, in which employees in the cannabis industry endure the same inequities that non-union workers face in similarly aligned industries like agriculture. These detrimental practices and policies plague workers with low wages, minimal benefits, such as access to adequate health insurance. As well as the aforementioned ‘at will’ restrictions that threaten a worker with unemployment at a moment’s notice, often unfairly.  

By way of contrast, the “high road” paradigm utilizes unionization to ensure that the workers are protected from arbitrary firings, and earn a fair wage.  The report suggests cannabis workers could earn anywhere from over $2,800 to nearly $8,700 more per year working under a union contract.

UFCW’s Jim Araby weighed in on the EPI report: “Obviously I agree with their findings because fundamentally unions provide certain things to workers that they don’t have when they’re not in a union. Number one, it provides a pathway to better wages and benefits. Number two, it provides a fair process to be in place for any sort of discipline and as it relates to working conditions. And third, it provides a career pathway so that workers can advance throughout the industry, gain knowledge and skills and get paid for it as they grow, such as through an apprenticeship program.” 

UNION AVOIDANCE  

Certain law firms offer union avoidance services that actually assist companies in preventing workers from unionizing utilizing various methods including using pressure and fear tactics on workers considering unionization.  While this sub-industry may be one largely clandestine among the general public it wields great influence nonetheless in the various industries infected by their undermining of worker gains and workplace rights. 

Araby is all too aware: “Union avoidance firms are a growing presence in the cannabis industry; the big union-busting law firms like Morgan Lewis and Littler Mendelson, as well as others, see [union avoidance] as a growth industry for them. 

“We know that some cannabis companies have these law firms on retainer (fees paid in advance to law firms to utilize their services when needed).  These union-busting firms as we call them will even create fake unions in order to avoid the labor peace agreement requirements. So we know this is around, and the best way to deal with that is to make sure we engage workers and we get some enforcement on the regulatory side from the state, as well as have the federal government go after law firms that knowingly break labor laws.”

Glimco agreed union avoidance firms pose a threat to unionization in the industry: “Unfortunately, their scare tactics and lies can have an effect on people. In cannabis, though, what I have seen is that there is so much solidarity and enthusiasm from these workers. For that reason, union-busting in cannabis hasn’t been as effective as it might be at some other businesses.”

Glimco suggested how workers may oppose union avoidance firm intrusion: “The best way to combat these firms is to have a united, educated group of workers, and a strong organizing committee prepared for an anti-union campaign ahead of time. The more workers know that the anti-union propaganda is coming, the less likely it is to be effective. 

“There’s also a number of union avoidance consultants who used to be employed by a union, but then got fired for wrong-doing or incompetence. When workers find that out, they tend to doubt the credibility of the union busters.”

“UNION BUSTING IS DISGUSTING” 

In April 2022 UFCW 7 held a protest that saw union members, lead by organizer Jimena Peterson, demonstrate outside of the Denver cultivation facilities of the cannabis company Green Dragon, a weed franchise based in Florida as well as Colorado. 

The protest took issue with the union-busting tactics of Green Dragon co-owner and head cultivator Ryan Milligan after Milligan and the company fired a trio of growhouse workers for supporting efforts to unionize the workforce. 

And it’s far from mere material gains that would-be unionizers want to see changed; Green Dragon staff reported a facility full of mold and insects. The company has ignored employees’ requests for adequate ventilation. 

Araby was understandably critical: “Union busting is disgusting as it goes, and as the [Green Dragon] case proves, the company was at fault, so they had to rerun that election and the workers won their union in June 2022 and they now have a contract there.

“When employers spend resources on preventing workers from organizing and having rights at work, they’re basically spending resources against the democratic process. We at UFCW think that money should be better spent on allowing the workers to decide if they want a union or not.” 

Teamsters Glimco added: “Union busting is very prevalent. Most of the employers we organized had hired outside union busters and engaged in all sorts of dirty tricks once we filed for an election. They have fired people to scare them out of organizing, they lie to their staff. There have been many unfair labor practice charges filed against companies for bad behavior, and we’ve won almost all of them.”

UNIONS CAN ALWAYS DO MORE 

Although unions are highly advantageous to workers and companies alike, they are not perfect nor immune from criticism. Complaints include excessive dues that don’t justify the benefits as well as unions functioning as little more than another division of the corporation, intended to keep potentially more excessive worker demands under control.  

Glimco addressed such concerns: “Workers don’t pay dues until after they have ratified their first contract. Take a look at any collective bargaining agreement that was negotiated by Teamsters Local 777, in cannabis or any other industry. If you do the math, you’ll see that the wages and benefits our members receive is exponentially more than the cost of dues. Dues are a tiny fraction of the economic benefits you derive from your union membership.

“This union’s direction is guided by the rank-and-file. Shop stewards, contract ratifications, the leadership at the national level, my position as President of Local 777 as well as that of the executive board; these are all decided by direct vote of our members. Furthermore, our union is structurally a bottom-up organization. Local affiliates are autonomous and have most of the power within the Teamsters.”

As referenced by Glimco, a “rank-and-file committee” refers to a center of workplace democracy created by the actual workers of a company as opposed to a traditional union hierarchy. 

UFCW’s Jim Araby fully supports the rank-and-file system: “The core value of any union is worker democracy, so the more workers want to take ownership of the union, the better. We 110 percent support that. This is important because fundamentally, you don’t win a strong contract if workers aren’t involved. If the union believes workers are nothing more than dues-paying memes and they don’t actually deserve rights in the union, then shame on the union for doing that. UFCW fundamentally believes in workplace democracy, which means workers organizing and engaging themselves in the organizing effort.

“In every single cannabis company I’ve organized there has been a rank-and-file worker committee at the bargaining table, with me bargaining that contract.” 

When asked what workers should do regarding their complaints or issues with the union, Araby strongly suggested: “When workers feel that way, they should move up the chain to get to the union leaders so that they can understand why workers are feeling that way. The union is only as strong as the worker’s participation in it. You only get out of it what you put into it. 

“But I do think if workers feel the union is not responsive to their issues, they should show up to the union hall and demand a response from the union, because they are the union, and they invest in this organization and they deserve everything they expect from it.

“We have to keep fiercely advocating for worker’s rights in the workplace, fighting for union recognition, and bargaining for strong contracts. At the local state and federal level we have to fiercely advocate for the decriminalization of cannabis as well as the legalization of cannabis, and assert the workers’ voice to be an essential part of these state and local laws.”

The Teamsters’ Glimco reiterated his reverence for rank-and-file: “Rank-and-file committees are the backbone of our entire organization, from the shop floor all the way to international level, so we are certainly supportive of them. The workers on these committees are the driving force behind winning elections and securing collective bargaining agreements. They are the ones who make the decisions about what the priorities are when it comes to collective bargaining, what issues need to be addressed in the workplace, and what actions need to be taken during an organizing or contract campaign. 

“We even have rank-and-file members on the negotiating committees for our national contracts, some of which cover tens of thousands of members. The union is not a third party where workers hire a representative to advocate on their behalf while they sit back and take a passive role. Rank-and-file Teamster members organize and bargain on behalf of themselves, and the local union is here to facilitate that process.” 

CANNABIS UNIONS ARE THE FUTURE 

Araby was ambivalent when asked about the future of cannabis unionization: “It’s yet to be seen if the industry itself believes in the union model; I would say some companies we work with value such partnerships and others who are sitting on the sidelines or even aggressively fighting us.”

Yet he still offered optimism: “If unions don’t give up when it gets hard, workers are going to get more and more organized. We have to struggle and fight because as it becomes legal across the country, you’re going to see more and more larger companies getting involved that are not necessarily friendly to unions, and we’re already seeing this. So we have to harness the strength of the existing workers we represent and have to continue to fight for workers’ space in the center of all these legalization efforts. 

“The challenge is: how do we get skilled and trained workers into that field so the companies can retain their workers?  So we’re trying to figure something out with local community colleges to see if there are any federal or state grants we can pull down to do workforce training and development training so internal candidates can grow in that job. The future of the cannabis industry, and union workers within it, is positive, but I can’t tell you it’s going to be one hundred percent going our way. But I know as long as I’m in the union, we’re fighting for this and the union is fighting for this, and we’re moving in a positive direction.”

The Teamsters’ Matt McQuaid opined: “I definitely see unionization increasing. I think there’s a lot of enthusiasm among people in this industry for unions and you’re only going to see it grow.

“It’s really important that in these companies that are making so much money, that cannabis workers feel like this can be a career. It’s important that they can stay in this industry for their entire lives, if they want to. And when you have a union, you have wage increases and benefits and all sorts of other things that make (a lifelong career) a possibility for workers. If somebody wants to work in this industry for 23 years, they should be able to do that and the union makes that possible.” 

His fellow Teamsters brother Jim Glimco was equally infused with optimism: “I think the track record of organized labor in the cannabis industry shows that we’re doing the right things to ensure that this is a successful endeavor. Ten years ago, there were hardly any unionized cannabis workers, now there are thousands. Over the long-term, I’d like to see some of the larger players in the industry negotiate national master agreements with our union. 

“As far as benefiting the whole industry, right now, a lot of people want to stay in the cannabis business, but they can’t because they need better wages and benefits. A union fixes that problem. The more unions there are in cannabis, the more we will have the right people in the right positions.”

Glimco “absolutely” expects cannabis unionization to increase. He elaborated: “Of the 21 states where recreational cannabis is currently legal, only five of them are right-to-work (which enables companies to suppress unionization efforts).”

“However, even in the right-to-work states, the Teamsters Union is strong. It was just legalized in Maryland and Missouri, two states where we have a strong labor movement. Recreational dispensaries just started opening in New York, the state with the greatest concentration of union members in the entire country. 

“Many of these states and municipalities are very smartly requiring labor peace agreements from employers as a condition of securing licenses. This means that employers have to agree that they won’t engage in union busting if the workers seek union representation. All of this portends well for cannabis unionization.”

Tikun Olam grow tech Kenneth Ocean was asked about what advice he would give to workers at a cannabis company with less than ideal conditions and management who were seeking to unionize: “I’d tell them to try to reach out to someone with your local Teamsters and find out the information you need to unionize. You have nothing to lose, and everything to gain. We got involved when our union steward—and cannabis cultivation lead—Doug Herring contacted the Teamsters and filed the paperwork with them and got in touch with Abe Gallegos. Teamsters 1932 made the unionization process happen pretty quick.”

When asked the same question, Abe Gallegos built upon Ken Ocean’s advice: “This industry is filled with brand new cannabis workers, the younger generation, so it’s up to them to set their expectations for a career going forward. Talking to workers in this industry, you find a lot still don’t understand their basic rights. Some of these people work at companies that don’t pay them until the company makes sales, so you have workers who aren’t being paid timely, which isn’t legal. 

“Unionization is a process that everyone is entitled to, and they can reach out to whatever union they want to talk to, and then put together their own voices to unionize. Teamsters represent the workforce, but at the end of the day, the workers are the union. They’re the ones who will push the industry to the next level. The steps to unionize are easy; contact a local union rep, then from that point we empower the worker so they can take ownership of their workplace experience.”

We let Teamsters 777 President Jim Glimco have the last word as he looked to a potentially dazzling future: “I think as legalization spreads you’re going to see unionization expand into the entire cannabis supply chain. On the west coast, we’re already winning elections at distribution companies and growers, and I think that’s an exciting indicator of what’s on the horizon. There’s no reason we can’t live in a world where one day every hand that touches the plant, from harvest to retail, belongs to a union member.”

The post Toward a More Perfect Pot Union appeared first on High Times.

That is the upshot of a report by local news station KOIN, which cited the Oregon Liquor and Cannabis Commission’s data showing “that in October 2021, nearly $94 million went to the state’s cannabis industry,” while last month, the industry received only about $79 million in total sales.

The station reported that the Oregon Liquor and Cannabis Commission also “reported 5.3 million wet pounds harvested by all producers” in October of last year, while last month, “that number fell to 4.1 million.”

“The September/October time frame is a harvest ‘window’ for outdoor cannabis grows in southern Oregon,” Mark Pettinger, spokesperson for the Oregon Liquor and Cannabis Commission told the station. “The actual harvest time is based on when cannabis farmers get their crop in the ground. Late rains pushed out the planting time this year. Also, the lengthy sunny and warm weather this fall probably affected decisions about when to harvest.”

“On the demand side, cannabis sales saw some significant spikes during the pandemic when consumers had fewer choices on how to use their discretionary income. Also, there was a fair amount of federal stimulus money that probably accounted for some of those increases. Since legalization in 2016 Oregon cannabis sales had been experiencing steady year-over-year increases,” Pettinger added.

Indeed, after cannabis retailers across the country saw a dramatic bump in sales in the age of quarantine, the industry has careened back to earth in recent months, particularly as inflation continues to tighten consumers’ pocketbooks. 

KOIN reported in August that the “pandemic boom may be coming to an end for Oregon’s cannabis industry,” with the state experiencing a steady decline in revenue from April onward. That downward trend followed two consecutive years in which the state topped $1 billion in sales.

“In June, sales totalled $82,723,244. It’s only the second time sales have dropped below $84 million since the start of the pandemic,” the station reported at the time. Experts said there are several factors contributing to the decrease in dollars sold, a few of which include consumer trends, the role inflation is playing on the market and the price at which retailers can sell their products.”

Oregon marijuana consumers who are feeling the pinch of inflation may enjoy some relief from this trend. As KOIN reported, the drop in prices “may benefit consumers who want the same quality of cannabis for less money, but buyers and sellers in the industry are put at a disadvantage.”

“The way that all states have set up their system is that whatever you grow and produce and do product manufacturing for and retail, it all has to be contained within the state,” Beau Whitney, a cannabis industry consultant, told the local station. “When you have an ‘everything contained in the state’ mentality, there’s not enough consumers to go around to handle all of that supply right in the state… when there’s oversupply and not enough demand, then prices go down because firms will get desperate. They’ll want to sell their product.”

“What cultivators have done is they’ve stopped cultivating,” Whitney added. “They’ve reduced the amount of square feet or acres that they’re deploying for further cannabis cultivation because if they grow it, but they can’t sell it, then what’s the point? It’s just like throwing money down the toilet.”

Oregon voters legalized adult-use cannabis by approving a ballot measure in 2014. Legal pot sales began the following year. 

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“Tilray Brands continues to strengthen our U.S. footprint and operations through investments in and growing our portfolio of leading lifestyle CPG brands that resonate powerfully with consumers,” said Irwin D. Simon, chairman and chief executive officer of Tilray. “Montauk Brewing is an iconic brand with leading market share and distribution in the northeast. Tilray Brands intends to leverage SweetWater’s existing nationwide infrastructure and Montauk Brewing’s northeast influence to significantly expand our distribution network and drive profitable growth in our beverage-alcohol segment. This distribution network is part of Tilray’s strategy to leverage our growing portfolio of U.S. CPG brands and ultimately to launch THC-based product adjacencies upon federal legalization in the U.S.”

For Tilray, the acquisition provides another foothold into the coveted United States market. Like other international cannabis brands, Tilray is circling the U.S. ahead of an anticipated change to the country’s federal marijuana laws.

President Joe Biden last month announced pardons for all individuals with simple cannabis convictions. In the announcement, Biden also signaled a change to federal marijuana laws, saying that he had directed “the Secretary of Health and Human Services and the Attorney General to initiate the administrative process to review expeditiously how marijuana is scheduled under federal law.”

“As I often said during my campaign for President, no one should be in jail just for using or possessing marijuana,” Biden said in the announcement, “Sending people to prison for possessing marijuana has upended too many lives and incarcerated people for conduct that many states no longer prohibit. Criminal records for marijuana possession have also imposed needless barriers to employment, housing, and educational opportunities. And while white and Black and brown people use marijuana at similar rates, Black and brown people have been arrested, prosecuted, and convicted at disproportionate rates.”

Tilray’s announcement on Monday said that following “federal legalization in the U.S., Tilray plans to take full advantage of its strategic infrastructure, operations and consumer loyal brands across beer, spirits, and snack-food categories to parlay into THC-based products and further expand its commercial opportunities.”

The acquisition also helps Tilray expand its collection of alcohol brands.

In the announcement on Monday, the company said that Montauk, billed as the “the #1 craft brewer in Metro New York,” “joins Tilray’s growing U.S. beverage-alcohol segment, which already includes SweetWater Brewing Company, the 10th largest craft brewer in the nation with distribution across more than 40 states, the Alpine and Green Flash iconic Southern California brands, and its leading lifestyle bourbon and spirits brand, Breckenridge Distillery.”

Montauk “has enormous potential to expand its customer base and grow throughout the U.S. as a true national brand,” Tilray said in the press release.

The announcement said that Montauk Brewing, SweetWater Brewing, Green Flash and Alpine now serve as “the cornerstones of Tilray’s coast to coast craft beer segment and further strengthens the Company’s net revenue.”

In addition to the acquisition of Montauk Brewing, Tilray said that it is also appointing “veteran beer and beverage industry executive Ty H. Gilmore as President of Tilray’s U.S. beer business, a newly created position.”

“We are excited to welcome Montauk Brewing’s founders Vaughan Cutillo and Eric Moss, as well as Terry Hopper, Montauk Brewing’s General Manager, to the Tilray Brands family and I look forward to working closely with Ty Gilmore to maximize the performance of our enormously powerful craft and lifestyle beverage brand portfolio,” Simon said in the press release on Monday.

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