Last Wednesday, the Oregon cannabis lawsuit we’ve been waiting for finally dropped. Industry operators should tip their hats to plaintiffs Ascend Dispensary and Bubble’s Hash, and our friends at the law firm Fisher Phillips LLP, for stepping up and challenging Ballot Measure 119 in U.S. District Court.
BM 119 passed in November 2024 with 57% of the vote. It requires all OLCC licensed retailers, processors and labs to provide a signed labor peace agreement (LPA) with a bona fide labor organization, to renew or apply for an OLCC license. The requirement took effect almost immediately— we therefore urged eligible OLCC businesses to renew licenses prior to December 5th, to dodge the LPA requirement for at least another year.
I’ve been bagging on BM 119 since before the vote, when I wrote that it would probably pass and observed that “I’m surprised people aren’t talking about it more.” It did end up passing, which seemed to catch the local cannabis industry flatfooted. Fortunately for the gang, BM 119 is legally suspect and this challenge appears strong.
You don’t have to be anti-union (I’m not) to think BM 119 was poorly conceived. I previously highlighted BM 119’s Constitutional and labor law exposure, and explained how this initiative arose after a stymied legislative effort by the United Food and Commercial Workers Local 555 (“UFCW 555”). The plaintiffs’ complaint traces this history thoroughly, including how UFCW 555 brought a failed recall effort against Representative Paul Hovey for having the stones to inquire whether its proposal was unconstitutional and could be preempted.
The complaint’s specific allegations include a series of violations of the First and Fourteenth Amendments of the U.S. Constitution, including on freedom of speech, due process, equal protection and right to contract, as well as violation of the Constitution’s Supremacy Clause. So, several hooks upon which the District Court could hang its hat. The complaint left off seemingly viable state law causes of action, likely for strategic reasons beyond my expertise.
The complaint seeks both declaratory relief (“you did it wrong”) and injunctive relief (“you have to cut it out”). As to the latter, the complaint mentions that plaintiffs subsequently filed a Motion for Temporary Restraining Order, which means that the State of Oregon would have to cut it out soon—that is, stop enforcing the LPA requirement. (The TRO motion hadn’t yet showed up on the docket as of close of business on Friday, when this post is being written, or I’d link it for you. Courts are closed for President’s Day; we should see it soon.)
From what I’ve gathered, OLCC isn’t particularly thrilled with having to enforce BM 119. My guess is DOJ won’t enjoy defending it. For now, it seems that a lot of cannabis licensees are submitting renewal applications without an LPA, hoping for a lawsuit like this one, and hoping the LPA requirement goes away. My information is that OLCC is processing those applications in due course: it’s worth noting that the Commission would have to follow a series of administrative steps before proposing to revoke or non-renew a license on LPA grounds.
So let’s see how it goes, now that it’s finally going. My guess is the Court will find that UFCW and Oregon voters overstepped with BM 119.
For previous posts discussing the BM 119 saga, check out the following:
