TO: CITY COUNCIL FROM: Councilmember Sylvia Arenas
Councilmember David Cohen
SUBJECT: SEE BELOW DATE: February 11, 2022
Approved Date 2/11/2022
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SUBJECT: PP21-002 - Amendment to Title 20 and Title 6 of the San José Municipal Code (Cannabis Business Zoning Ordinance and Business Licenses and Regulations)
RECOMMENDATION
Include in Council Direction staff’s Policy Alternative 1 in the staff Supplemental Memo dated February 11th, 2022.
STAFF POLICY ALTERNATIVE 1 POLICY LANGUAGE:
“Give direction to the City Manager to add a requirement that new applicants or renewing applicants demonstrate compliance with state law by submitting a copy of a labor peace agreement with a bona fide labor organization as part of their initial registration packet and/or annual renewal. This provision would be added to the City Manager’s Regulations for cannabis registration. If a cannabis business failed to provide the documentation, the Division of Cannabis Regulation would be unable to issue a Notice of Completed Registration.”
BACKGROUND
On October 12, 2019, Governor Newsom signed Assembly Bill 1291 (“AB 1291”) into law, which requires companies to sign a labor peace agreement with a bona fide labor union, a union which represents or is actively seeking to represent marijuana workers. Under a labor peace agreement, cannabis businesses must allow the union to communicate with its workers in an effort to organize them and represent their interests. In exchange, the union must refrain from work stoppages, picketing, boycotts, and other traditional tactics used to pressure businesses.
Effective January 1, 2020, California cannabis license applicants must sign labor peace agreements within 60 days of hiring their 20
th non-managerial worker.
COUNCIL AGENDA: 2/15/22
FILE:
ITEM:
22-152
10.2 CITY COUNCIL February 15, 2022 Subject: PP21-002 - Amendment to Title 20 and Title 6 of the San José Municipal Code (Cannabis Business Zoning Ordinance and Business Licenses and Regulations) Page 2 Despite their growing operations, most cannabis businesses operating dispensaries within San Jose have yet to comply with the California State Business and Professions Code, either by not filing a Labor Peace Agreement, or by filing an agreement with a so called “company union” that does not represent or seek to organize cannabis workers. This issue was validated by staff’s research and documented in the supplemental memo. Ensuring cannabis workers have a voice on the job and can share in the rewards of the legalized cannabis industry is important to ensuring this new industry can supply family-supporting jobs. A recent study by the Economic Policy Institute found that cannabis workers could make an estimated $7,030 more in wages annually under a high-road union job than under a low wage scenario. That’s the equivalent of almost three months of rent for an average San Jose family. Labor peace agreement prevent union-busting by employers in exchange for workers pledging not to strike. Ensuring labor peace also benefits our City, making sure that work stoppages do not prevent cannabis dispensaries from operating, ensuring our City can continue to collect taxes from our licensed dispensaries, a revenue source that will certainly grow if the Council adopts staff recommendations to expand the number of dispensary storefronts this week. Other jurisdictions, including San Francisco and Long Beach have amended their local regulation to require cannabis businesses operating locally to file these state required Labor Peace Agreements in order to receive permits. The City of San Jose should adopt this best practice. BROWN ACT The signers of this memorandum have not had, and will not have, any private conversation with any other member of the City Council, or that member’s staff concerning any action discussed in the memorandum, and that each signer’s staff members have not had, and have been instructed not to have, any such conversation with any other member of the City Council or that member’s staff.