Legal sales of recreational marijuana have existed in Michigan for barely a month, and there’s already an emerging political fight over labor unions organizing pot shops.
The state’s Marijuana Regulatory Agency is under fire from business groups for proposing an administrative rule that cannabis businesses have to enter into labor peace agreements with unions as a condition for licensing to grow, sell or distribute marijuana.
Labor unions routinely seek peace agreements with businesses to get employers to remain neutral in a union organizing drive.
Republican lawmakers aligned with business groups are questioning why a state agency wants this licensing requirement and whether it was ordered by Democratic Gov. Gretchen Whitmer.
In a year-end interview last month on public television, Whitmer said she would listen „to the experts” about whether to pursue the rule.
„I’ve not weighed in, personally, on that one,” Whitmer told television reporter Tim Skubick.
Sen. Aric Nesbitt, a Van Buren County Republican and chair of the Senate Regulatory Reform Committee, pressed the Department of Licensing and Regulatory Affairs last week to nix the proposed rule, calling it a „mob style protection racket” for labor unions.
„It is my hope that in this new year your department will refocus on efficient administration instead of handing out political favors,” Nesbitt wrote in a Jan. 8 letter to LARA Director Orlene Hawks.
Hawks’ department houses the Marijuana Regulatory Agency, which is headed by Director Andrew Brisbo. He’s been empowered to regulate the industry following voter approval to legalize recreational marijuana in 2018.
David Harns, spokesman for the Marijuana Regulatory Agency, said the proposed rule was designed to establish a stable workforce for the cannabis business.
The proposed requirement has been met with fierce pushback from the Michigan Cannabis Industry Association, the Great Lakes Cannabis Chamber of Commerce and the Michigan Cannabis Manufacturers Association, as well as long-established business lobbying groups in Lansing.
The Small Business Association of Michigan, state chapter of the National Federation of Independent Business, Michigan Chamber of Commerce and other groups have slammed the proposal.
The Reason Foundation, a Los Angeles-based libertarian think tank, submitted written testimony to Nesbitt’s committee last month arguing the rule would run afoul of the National Labor Relations Act.
In 2005, a federal appeals court ruled an ordinance in Milwaukee County, Wis., that required labor peace agreements for certain government contractors wrongly attempted to preempt the NLRA.
„For its part, the National Labor Relations Act only requires employers to negotiate 'in good faith’ with a federally recognized union that has achieved majority support of workers in an NLRB-supervised election,” Reason Foundation senior policy fellow Geoffrey Lawrence wrote in Dec. 9 testimony. „It never requires an employer to enter into any form of contract with a union as a condition of opening its doors.”
Lawrence noted the Michigan ballot proposal made no mention of a requirement for a labor peace agreement.
The 2016 voter-approved law that legalized recreational marijuana in California required labor peace agreements for cannabis businesses with 20 or more employees.
„This provision, however, was expressly included within the language of Proposition 64, the voter initiative that legalized adult-use marijuana,” Lawrence wrote in his testimony. „… Many licensed marijuana growers in California have avoided the requirement altogether by contracting with farm labor services for their labor needs …”
The MRA plans to hold a public hearing on the proposed rule in mid-February before it is sent to the Legislature’s Joint Committee on Administrative Rules for review.
The regulatory agency hopes to have its licensing rules finalized by June, Harns said.
„We are confident that the rules, as drafted, are on solid legal footing,” Harns told Crain’s.