By: Candice Zee

As employers have been watching the Board issue decision after decision holding common-place employment policies unlawful, consider expanding its jurisdiction to include religious schools, graduate students, student athletes, and try to recreate the “joint employer doctrine,” these employers repeatedly have found themselves wondering: “What are these guys smoking?” We may never know the answer to that question, but we do know that the Board now wants to regulate the commercial marijuana business.

On August 6, the Board’s General Counsel’s Division of Advice released an Advice Memorandum stating that 1) the Board should assert jurisdiction over employers in the medical marijuana industry and 2) workers who are primarily involved in processing marijuana plants rather than harvesting them are not agricultural workers, but employees under the National Labor Relations Act (the “Act”). (Northeast Patients Grp., NLRB Div. of Advice, No. 1-CA-104979, 10/25/13 [released 8/6/14]). The Division of Advice issued the memorandum after the United Food and Commercial Workers (“UFCW”) filed several unfair labor practice charges against Maine’s largest medical marijuana provider, Wellness Connection, in May and June 2013.

The memorandum, authored by Board Associate General Counsel Barry J. Kearney, determined that an enterprise in the medical marijuana industry is within the Board’s jurisdiction so long as it meets the Board’s monetary jurisdictional standards. The Division of Advice opined that the enterprise and employer at issue clearly met such standards. Wellness Connection, which employs 3 production assistants and 8 processing assistants, not only serves 3,000 of Maine’s 4,500-plus dispensary customers, it purchases a sufficient amount of out-of-state supplies to meet the Board’s nonretail monetary standard. The employer further has a gross revenue sufficient to meet the Board’s retail standards and runs its operation year-round with a steady workforce.

The Division of Advice stated that the size and value of the marijuana industry also weighed in favor of asserting jurisdiction. The marijuana industry is worth an estimated $1.5 billion and is projected to increase to $6 billion by the year 2018. In addition, thousands of individuals are employed in the industry, with several of them already represented by unions and covered by collective bargaining agreements. Notably, in 2011, the UFCW created a “Medical Cannabis and Hemp Division.”

Based on its analysis, the Division concluded that it would be appropriate for the Board to assert jurisdiction over the employer. The Division of Advice concluded this despite the fact that the employer’s enterprise violates federal laws. The Division stated that the Department of Justice (“DOJ”) has indicated that it will not prosecute companies such as Wellness Connection unless they undermine enforcement priorities. The Division also recognized that both Congress and OSHA have exercised its authority over the industry.

The Division of Advice also concluded that individuals engaged in processing marijuana, processing assistants, are statutory employees under the Act. The employer’s processing assistants are primarily responsible for working with cannabis plants during the processing stage. The processing stage takes place after the cannabis plants have been grown, cultivated and harvested by the employer’s production assistants. Processing assistants carry out duties such as trimming the dried cannabis, running the plants through a cutting and vacuuming process, extracting the portions of the plant that have the most medicinal value and weighing and packaging the cannabis.

In finding that the processing assistants are employees under the Act, the Division of Advice opined that the processing assistants’ job duties were “more akin to manufacturing” than to agricultural farming because the processing operations transform the cannabis plant from their raw state into a retail product. The Division also pointed out that the employer’s farming operations were subordinate to its processing operations. The employer not only employed 8 processing assistants compared to its 3 production assistants (who perform agricultural duties), it had invested in processing equipment with extensive protocols and training regimens for processing and packaging its product.