In an ironic turn of events this week, the application of federal law benefited state-licensed cannabis businesses in Oregon—and potentially nationwide. Those involved with the cannabis industry often view federal law as an impediment to cannabis businesses, given the ongoing federal illegality of cannabis and the extremely burdensome federal tax obligations created by Section 280E of the tax code.
However, the National Labor Relations Act ("NLRA") and the body of federal case law that has sprung up around it worked to nullify an Oregon ballot initiative that would have improperly restricted licensed cannabis operators from discussing the pros and cons of unionization with their workforces.
In November 2024, Oregon voters approved a ballot initiative that required licensed cannabis businesses to enter into labor peace agreements with their workers to either renew existing licenses or to get new licenses.
In order to comply with this requirement, the employer would have to enter into a labor peace agreement that provided that it would "remain neutral" as to the topic of unionization when discussing workplace matters. Two licensed cannabis operators sued several Oregon state officials in the U.S. District Court for the District of Oregon, arguing, among other things, that the ballot initiative was unconstitutional because the NLRA preempted it under both the Garmon and Machinists doctrines.
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