Rhode Island Cannabis Dispensary Files Lawsuit to Challenge Labor Provisions of Legalization Legislation

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Amid escalating tensions with its workforce regarding labor standards and unionization, a marijuana dispensary located in Portsmouth is directing its legal action towards Rhode Island’s recreational cannabis legislation.

On Monday, Greenleaf Compassion Center filed a complaint in federal court, asserting that the state’s cannabis legalization law, signed in May 2022, violates both the U.S. Constitution and national labor standards. This legal challenge follows a recent settlement agreement between the dispensary and its employees related to alleged violations of federal labor laws.

The comprehensive Rhode Island Cannabis Act introduced a process for legalizing, taxing, and selling marijuana, while also expunging records for past marijuana possession charges. Among its provisions, a single-page section within the 125-page document mandates that all retailers must engage in “labor peace agreements” with their employees. These agreements allow workers to unionize in exchange for refraining from picketing, boycotting, or work stoppages.

Greenleaf takes issue with this requirement, contending that it “undermines employers’ negotiation power, forces them into unfavorable conditions, and denies employees their federal law-protected labor activities, such as strikes.” The lawsuit, filed in the U.S. District Court for the District of Rhode Island, specifically alleges that this compelled labor agreement infringes upon the Supremacy Clause of the U.S. Constitution and the National Labor Relations Act.

The marijuana dispensary, which submitted its license application in 2010 and began serving medical marijuana customers in 2013, encountered labor organization efforts in April 2021 when its workers voted to join the local chapter of the United Food and Commercial Workers (Local 328). Despite negotiations and the eventual ratification of a union contract in August 2022, the dispensary’s discontent grew as the state legalized recreational cannabis and introduced labor peace agreement provisions.

Greenleaf’s complaint describes the union’s stance during negotiations as “unyielding” due to the anticipation of bolstered leverage through the labor peace agreement mandate. The complaint also highlights certain terms of the contract that it deems “mostly disadvantageous” to the dispensary, projecting ongoing harm as long as the mandate remains intact.

This marks the second instance in which the Portsmouth company has had to compensate employees for contravening federal labor regulations. A prior settlement in December 2021 required the dispensary to provide six weeks of back pay to workers and address other alleged violations of workers’ rights.

The complaint names Local 328 as a defendant and seeks a federal court judgment declaring the labor peace requirement unconstitutional and invalidating the existing collective labor agreement. Additionally, it aims to prevent the state from enforcing the labor peace mandate. The lawsuit also lists members of the newly established Cannabis Control Commission and officials from regulatory offices as defendants.

The spokesperson for the Department of Business Regulation and the Office of Cannabis Regulation declined to comment on ongoing litigation. Union organizers and labor advocates continue to endorse the labor provisions of the law, emphasizing the mutual benefits for both workers and employers.

Greenleaf contends in its complaint that the labor agreement’s purpose was not to serve the state’s interests, which might render it legally defensible, but rather to fulfill policy objectives resulting from lobbying efforts.

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