New York City marijuana store sues to stop unionization

A New York City marijuana store backed by a prominent venture capitalist is fighting a unionization effort by trying to overturn a labor-friendly licensing requirement in court.

Requiring marijuana businesses to sign a “labor peace agreement” with a union violates federal labor law, according to a lawsuit filed in federal court by Hybrid NYC.

Hybrid NYC opened a marijuana store in Brooklyn last fall under the brand Gotham.

According to court documents, Hybrid filed its lawsuit after Local 338 of the Retail, Wholesale and Department Store Union (RWDSU) informed the company April 1 that Gotham employees had voted to join the union.

The Mineola-based RWDSU is affiliated with the United Food and Commercial Workers Union, which represents many U.S. cannabis employees.

The lawsuit names the state Cannabis Control Board and Office of Cannabis Management (OCM) as defendants.

Local 338 is not named in the suit, which argues that the state-level labor peace agreement provisions violate the National Labor Relations Act.

Lawsuit defends ‘right to be heard’

The OCM declined an MJBizDaily request to comment on the pending litigation.

Hybrid CEO and founder Joanne Wilson said in a statement to the Times Union that the lawsuit is about “our right to be heard.”

“As entrepreneurs, we should not be suppressed from actively participating in decisions being made that will directly impact the very employees and/or communities we aim to serve,” told the Albany newspaper.

Like other states with regulated marijuana industries such as California and Oregon, New York requires certain cannabis businesses to secure a labor peace agreement with a “bona fide labor organization” as one of the conditions to obtain a license.

Labor peace agreements (LPA) require businesses to stay neutral on whether their employees can form a union.

In return, unions agree to not to strike, picket or boycott the business during any unionization drive.

Businesses in other states also have sued to overturn such laws but have been unsuccessful.

Action followed labor peace agreement

According to its lawsuit, Hybrid signed an LPA with the Local 338 in March 2024.

That’s despite a “conflict with federal labor law and principles of free speech” and despite the company “already provid(ing) its employees with wages and benefits that exceed the market rate,” according to the suit.

However, the situation didn’t appear to prompt any organized pushback from Gotham until the union drive this spring.

Local 338 has organized other New York marijuana businesses, including a processor in Syracuse.

In some states, LPAs have prompted creative responses from businesses, including the formation of alleged sham unions.

Unionization has delivered mixed results for cannabis industry employees.

Workers at some companies earned contracts after strikes, while others have agreed to dissolve unions in exchange for better pay.

Implications for New York

New York has so far fended off other lawsuits challenging its legalization law, including a provision reserving licenses for social equity applicants.

It remains to be seen if Gotham’s attempt to overturn New York’s LPA law could aid other businesses’ quests in other states to defeat the requirement.

But the situation at Gotham might have broader political implications in New York, a traditionally labor-friendly state.

Campaign finance records show Wilson is a donor to New York Gov. Kathy Hochul, who is up for reelection in 2026.

Wilson and her husband, Fred Wilson, are prominent venture capitalists in New York City.

Chris Roberts can be reached at chris.roberts@mjbizdaily.com.