Dispensary workers in Elkins Park, an unincorporated community just north of Philadelphia, told their bosses they wanted to unionize on the biggest marijuana holiday of the year — April 20.
After that, the vibe at work changed for 26-year-old Robert Franco, who commutes from Kensington to the Restore Integrative Wellness Center, a medical marijuana dispensary on Old York Road.
“Everybody was always anxious,” Franco said. “It was like walking on eggshells the entire time.”
The company was “extremely adverse to the idea of their workers unionizing,” said Wendell Young, the United Food and Commercial Workers International Union president for Local 1776.
Union organizers said that over the past few months, Restore Integrative Wellness Center hired anti-union educators to hold meetings with workers before the vote. Workers also said that even the company’s top management sent an email to employees one day before the vote, pleading with them not to unionize, saying it would destroy the relationship between the employees and the company.
The union currently represents more than 1,000 cannabis workers across 20 dispensaries in Pennsylvania.
“[Restore] utilized a lot of the typical scare tactics and intimidation,” Young said. “They created a hostile work environment.”
But on June 1, nearly 69 percent of workers voted to unionize the Elkins Park store, according to results on file with the National Labor Relations Board. Out of 16 ballots cast, 11 were in favor of the union and five voted against it. There were 24 employees eligible to vote, records show.
Restore did not respond to repeated requests for an interview with WHYY News.
This was not the first cannabis dispensary across the region to unionize, and union leaders say it won’t be the last either — especially as the industry is poised to grow in the coming year.
If recreational marijuana is legalized in Pennsylvania, there may be an even bigger push to unionize those stores, both industry experts and union officials say.
Restore’s Elkins Park location opened about five years ago, but since there is a high turnover of retail workers, Robert Franco, with only two years of service, is one of the most senior employees.
Franco began working part-time at $15 an hour, and is now earning $18.50 an hour as a full-time employee. He’s offered health insurance, but it’s a limited plan with few doctors in the region. It’s from the for-profit giant United Healthcare.
Cannabis industry insiders say it’s the only health insurance company willing to underwrite group policies for a business that’s still illegal on the federal level. That same reality means 401K retirement plans are off the table for cannabis business employees too.
UFCW Local 1776 union president Wendell Young said that total compensation for unionized cannabis workers is typically about 30 percent higher than non-unionized workers when healthcare benefits and retirement plans are factored in.
Dispensary workers at Restore are expected to cross train as janitors, security officers, inventory specialists, and retail sales cashiers for a starting wage of $17 an hour, but are often denied overtime and holiday pay, employees say. There are no sales bonuses either.
Lindsay Alston is 31 years old and has a college degree, and says she can’t afford to give the company more of her time.
“They keep you at a wage where they can say that it’s the highest of the industry,” she said. “But like I had told management — industry standard doesn’t mean that it’s a livable wage.”
In May 2018, Restore along Frankford Avenue in Fishtown was the first medical marijuana dispensary to open in Philadelphia. In March 2022, Restore ran into issues when it sought to open a sixth location, this time in Delaware County, when the Yeadon zoning board reversed its decision to allow the dispensary.
While cannabis companies acknowledge that dealing with unions is part of the equation, it can be difficult to turn a big profit with the tax structure that doesn’t allow businesses to use common tax deductions such as overhead expenses like advertising, salaries and travel expenses.
“It is expensive to operate a cannabis business, particularly because of the lack of access to traditional banking,” said Meredith Buettner, executive director of the Pennsylvania Cannabis Coalition. “The effective tax rate of a cannabis business hovers somewhere around 70 percent, whereas a normal legal business operates with a tax burden of somewhere around 30 percent.”
Philadelphia attorney Justin Moriconi of Moriconi Flowers Ltd. has worked with many cannabis businesses in the licensing process. Moriconi said some clients are eager to offer employee compensation packages to attract talent, but it’s not always feasible at first.
“I’ve had clients who wanted to do profit-sharing plans, incentive bonus plans and that’s all good,” Moriconi said. “But you have to have the money there to do it. I think that will change, but we’re not really there yet.”
There were more than 425,300 patients across Pennsylvania who purchased $7.3 billion in medical cannabis products across 173 dispensaries as of March 2023, according to a presentation to the state Medical Marijuana Advisory Board in April.
According to state data, monthly dispensary sales of medical marijuana regularly hit about $140 million each month statewide, and have grown steadily since 2020. Not all dispensaries share individual revenue data or final profits after expenses.
“Cannabis companies always struggle to be profitable,” Moriconi said. “The reason for that isn’t necessarily the pricing, although certainly that can affect it. But it’s taxes.”
Since the medical marijuana business was legalized in 2016, the market has significantly consolidated as smaller operations sold licenses to larger corporations, he said.
If Pennsylvania lawmakers approve recreational cannabis sales for adults like Delaware, New Jersey, Maryland ,and New York have already done, unions are likely to play a leading role in that industry too, according to Meredith Buettner, of the Cannabis Coalition.
“We’ve seen pieces of legislation filed in both the House and the Senate here in Pennsylvania that have pointed to the state liquor store system as a possible avenue for adult-use cannabis,” she said. “That signals that labor is a really important part of this conversation as the workforce of those stores is unionized. I think the industry acknowledges that and is prepared to have productive conversations with labor partners as we develop a comprehensive adult-use plan.”
In New Jersey, regulators already require labor peace agreements where unions are allowed to pitch the idea to cannabis workers.
“It takes a lot of the friction away between business owner and employee and union having that labor peace agreement in place,” Moriconi said. “So every new business in New Jersey has to have a labor peace agreement in place. Doesn’t mean they’re all going to be unionized, but they have to have this procedure.”
“Safety is a huge issue within these grow facilities,” UFCW Local 1776 union president Wendell Young said. “There’s a lot of potential exposure with the products that are used to help cultivate and protect plants that aren’t necessarily good to humans. We do a lot of work around trying to understand the best practices for ventilation and the kind of safety gear that should be worn.”
In the coming year, UFCW Local 1776 expects to represent another 800 workers as contracts are still being hashed out.
“We expect to continue to organize at a fairly rapid rate,” Young said.