Curaleaf Holdings Inc. (CSE: CURA) (OTCQX: CURLF) violated labor law by refusing to bargain with unionized workers at its Chicago location, the U.S. National Labor Relations Board ruled Tuesday.
A three-member panel said that the company, GHG Management LLC, which oversees Windy City Cannabis and Curaleaf Weed Street, must recognize and bargain with workers within 21 days of receiving the notice from the NLRB, Law360 first reported.
“By failing and refusing since May 5, 2022, to recognize and bargain with the union as the exclusive collective-bargaining representative of the employees in the appropriate unit, the (company) has engaged in unfair labor practices affecting commerce within the meaning of (federal labor law),” the order said.
United Food & Commercial Workers Local 881 has represented the employees at the Weed Street dispensary since August 2021.
Since then, Curaleaf and the union have traded legal barbs over the validity of the election.
NLRB records show that the company refused to bargain with the union, stating that it would instead look to appeal the board’s certification approval. The union filed a complaint to the NLRB shortly after and claimed Curaleaf was in violation of federal labor law.
Chinks in the Armor
The decision comes as another defeat for the MSO giant, which has already been engaged in a cost-cutting campaign as sputtering discussions over federal cannabis banking legislation creates headaches for the industry amid a broader economic slowdown.
The company laid off more then 200 of its employees over Thanksgiving week, and CEO Matt Darin told employees in a company-wide email that Curaleaf has been engaged in talks with unionized workers at affected locations.
At the same time, Curaleaf was reported to have told customers at various locations over the past week that it was unable to accept bank cards after some of the largest card processors turned off the ability to process cashless ATM transactions, Bloomberg reported on Monday. Around a third of Curaleaf’s transactions take place using the method.
Curaleaf did not comment at the time, though founder and chairman Boris Jordan eventually went to Twitter to quell the chatter.
Our people at $CURA have been told that the problems with cashless ATMs is a technical glitch in a software download and not some nefarious regulatory attack on the industry. 🙏 $ CURLF
— Boris Jordan (@Boris_Jordan) December 5, 2022
It’s a none issue 🤷♂️
— Boris Jordan (@Boris_Jordan) December 6, 2022
“It’s a none issue,” he wrote.
The news comes as Curaleaf’s most recent earnings showed crimping margins and rising losses despite the company eking out on revenue expectations.
In a Nov. 7 earnings call, Jordan told investors that management is “acutely aware of the economic conditions our customers are navigating.”
“As such, we are taking appropriate actions to ensure we continue driving growth and margin expansion next year, irrespective of the economic climate,” Jordan said at the time.
Darin said during the call that the company is “comfortably transitioning from the asset accumulation phase to the asset optimization phase in our evolution. Importantly, we are at this juncture by choice, not market force.”