The Labor Pains of Michigan’s Cannabis Industry: Unmasking Layoffs, Turnovers, and the Push for Unionization

An Opinion Piece By: Harry Barash

The employment landscape in the cannabis industry is going well, the same as the licensees who hold them are, which for the most part is not a good place. With the compression in pricing, we are seeing a lot of residual effects on cost-cutting measures. That usually starts and ends with layoffs, which are happening at a pace never seen in the five years since legalization. Although the CRA states that 35,000 people were employed in the cannabis industry at the end of 2023, a 23% increase from December of 2022, it doesn’t appear that rosy on the inside. It certainly wasn’t going to last forever, and companies are making very difficult decisions in order to keep the lights on, literally. Industry insiders indicate that there is a major problem with maintaining longevity at a single employer. Turnover is high, pay is low, and morale is even lower. Additionally, the cannabis employment industry does not provide enough job stability compared to other federally legal industries. Fortunately for the industry, it seems like there are a lot of people that are passionate about it who are willing to start at entry-level positions, usually at lower pay than even flipping burgers at McDonald’s, just to break into the industry with hopes of working their way up and bigger paydays.

You are seeing this happening in many different segments in the licensed space, but it seems like cultivators first, followed by processors are the most impacted. I was recently contacted by a member of the community who is employed with a large grower who at one time had as many as 65 employees and today are in their 20’s. They are producing the same volume and have not been replaced by temporary staffing companies or automation. These operations are doing what any other business that is losing value would be doing, and that is just trying to figure out how to do the same or even a little less with a lot less and trying to figure out where that sweet spot is. They simply can’t continue at the pace they have been going or it will be lights out, literally and figuratively. Licensees are scrambling with cutting costs in this new normal, and all roads lead to labor costs first, which is usually one of the highest, if not the highest costs for most businesses, especially in cannabis cultivation. Many are doing it at the expense of quality and perhaps quantity as well. I can’t imagine how any company that has cut their labor force by more than half preserves the same quality and production amount as they did when they had way more hands on deck. I would imagine one of the reasons why companies are sacrificing quality is because they are probably not/did not get more in price. They are a business after all and with all the restrictions, licensing costs, regulations, many feel, right or wrong, by reducing their labor costs it will automatically improve their bottom line.

When the topic of labor comes up, you are starting to hear more and more about how the industry should consider unionization. Although it is not very popular at the moment, many feel that the cannabis industry, a lot more than others due to how scrupulous it can be, could benefit from it. We reached out to Stacey Watrobski, who is a cannabis activist, a former employee in the industry and one of the biggest figures that is pushing for both collective bargaining and health & safety standards within cannabis. I asked her how the unionization efforts were going and who is currently operating under a union and she had this to say, ‘In Michigan, there are a few shops that have unionized! Authentic 231 in Manistee was the first licensed cannabis business in Michigan to recognize their employees’ unionization efforts, and went straight to bargaining, saving both the workers and the business a ton of headache, time and MONEY!’ I also asked her how she feels unionization has been and will continue to be received and how it would mitigate things like bad actors and layoffs, she replied, ‘There have been a handful of workers trying to unionize, but the major problem that occurs – and ruthlessly so – is employers union-busting. To union-bust is not only to completely disregard the rights of the worker but also to dismantle the fabric of what the middle class was built on: the right to collective bargaining. Currently, two already established unions have given a shot at organizing workers in cannabis. Both the Teamsters and the UFCW have cannabis divisions, with the Teamsters showing headway with strongly publicized cannabis strikes. Now, how that has been received by the C-Suites and such is very poor. Those bad actors throw tens if not hundreds of thousands of dollars into keeping workers from even getting to a fair vote after they sign initial union recognition cards. Workers that have successfully voted Yes for Unions have landed contracts with above inflation wage increases, better or completely new benefits (much cheaper when working with a union!), research, and implementation of proper environmental concerns within applicable facilities, overall common-sense restructuring and hierarchy of duties, etc. It’s like saying, do you like looking at a restaurant menu that’s organized, or a piece of paper with words about food on it?

Unionization efforts can expose bad actors pretty quickly. If we look back at some of the layoffs and closures over the last couple of years, workers collectively coming together to address labor concerns often preceded what anyone saw in the news. Workers are on the pulse of what needs to be fixed. They see and solve problems day in and day out. So why are they being left out of the discussion when the industry is collectively tanking? Even 280-E can be bypassed if a cannabis business is 100% employee-owned! Collective bargaining by workers will bring about major solutions to problems that are crippling the industry. It’s important to note that workers can collectively form a coalition without joining an already existing union; however, they will not be protected by certain laws, like the right to strike, until they become a bonafide union, or again, join an existing one. Bad actors will be around as long as people keep working for them. The higher the turnover, the better chances they will not survive the next 24 months.

If you are a member of the MiCannaPros private group on Facebook where the topic of employment recently came up due to the large number of posts the last several months regarding people looking for employment, you will see many of the comments were predominantly from people that were getting laid off. The combination of pricing and the January and February retail blues I’m sure are largely contributing to this trend. The million-dollar question becomes, is this permanent or do some companies just need to do this temporarily to catch their breath with the hope that better days are ahead. Just like everything else in this business, there are no guarantees and things can change overnight.

Make sure to check out Cannabis Workers Resource for upcoming features, resource launches, retention consulting services, and more. You can also follow Stacey and CWR on Instagram!

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