California-based marijuana delivery firm Eaze is facing a possible worker strike in the weeks leading up to April 20 over negotiations with drivers over mileage reimbursement and other outstanding issues, according to the national labor union that represents the workers.
Four chapters of the United Food and Commercial Workers Union in California have been negotiating with Eaze on behalf of more than 500 cannabis delivery drivers since last August, according to a statement from the UFCW.
Employees recently voted to reject Eaze’s “last, best, and final” contract offer, which it made on March 19. That vote authorizes the UFCW to initiate an employee strike, the union said.
A strike could kneecap the delivery firm in advance of the largest cannabis sales day of the year, the stoner holiday of 4/20, the union implied in a press release.
“Eaze/Stachs’ recent offer did not meet the worker’s key objectives, which include raising the mileage reimbursement rate, increasing hourly wages, and ensuring a minimum number of hours,” the union said. “Despite the company’s refusal to give workers what they deserve, the union remains committed to negotiations in the hope of reaching a mutually beneficial agreement and avoiding a work stoppage.”
Eaze did not immediately respond to a request for comment Wednesday morning, but CEO Cory Azzalino told WeedWeek that Eaze also is continuing to negotiate, after having slashed mileage reimbursement rates for drivers last year to 40 cents. By contrast, the Internal Revenue Service recommends a mileage reimbursement rate of 67 cents, while the required minimum reimbursement rate under California law is 35 cents.
Whether the company is profitable or can afford to pay drivers more has been a matter of debate. The privately held Eaze previously maintained that it has never turned a profit, WeedWeek reported, and has even cut corporate salaries by 70% in the last two years to “stay in business.”
But last November, Azzalino said during a podcast that Eaze is profitable in its home state of California (which leaves question marks about the profitability of the company’s footprint in its other state markets, which include Michigan and Colorado).
Regardless, the UFCW and Eaze employees have maintained that the company can afford more concessions to workers.
“We are the reason for the company’s profits, and while they’re getting richer, we’re barely scraping by,” driver Austin Williams said in the release. “UFCW members are ready and willing to do what it takes to ensure Eaze/Stachs agrees to a contract that respects our work and ensures we can put food on the table and pay our rent.”
Three of the four UFCW locals also filed unfair labor practice complaints with the National Labor Relations Board against Eaze and its parent company, Stachs LLC, alleging that the company has refused to share worker information and unilaterally modified driver contracts, specifically about mileage reimbursement for delivery drivers. Two of the three complaints were filed on June 7 last year, but the third was just filed on March 25 by Local 770 in Los Angeles. All three are still pending.
The news is yet another signal of organized labor’s growing power in the cannabis industry. Last year, multistate operator Green Thumb Industries had to deal with a nearly two-week strike at several of its facilities in Illinois, led by the International Brotherhood of Teamsters, and also had to handle multiple unfair labor practice complaints lodged against it.
Many other large cannabis companies – including Ascend Wellness, Ayr Wellness, Curaleaf, TerrAscend, Cresco Labs, and Trulieve – have also faced unfair labor practice complaints filed by unions.
John Schroyer has been a reporter since 2006, initially with a focus on politics, and covered the 2012 Colorado campaign to legalize marijuana. He has written about the cannabis industry specifically since 2014, after being on hand for the first-ever legal cannabis sales on New Year’s Day that year in Denver. John has covered subsequent marijuana market launches in California and Illinois, has written about every aspect of the marijuana trade, and was part of the team that built the cannabis industry’s first-ever trade show, MJBizCon. He joined Green Market Report in 2022.
April 3, 2024 at 11:11 pm
You have left out some important info.
$.35 per mile is the required minimum reimbursement rate in California for 1099 EMPLOYEES ONLY. Prop 22 is only for app based drivers, who can deduct their vehicle expenses on their federal tax returns to recovery their losses. (They’re also guaranteed a minimum wage at 120% of local rates.)
Cannabis delivery drivers are W-2 employees. We cannot deduct those expenses. The IRS rate exists for a reason. By the way, in order to legally pay less than the IRS rate, an employer must PROVE that their employees costs are less than that rate. Eaze has provided no such proof.
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April 3, 2024 at 11:34 pm
Under California labor code 351, it is illegal for an employer to try to credit an employee’s tips against their compensation. Tips are not guaranteed income. You cannot plan your life or your bill payments on income that is not guaranteed. A company cannot use tips as an excuse to pay employees lower wages. That is 100% illegal.
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April 4, 2024 at 12:09 am
It’s a complicated picture. There are certainly headwinds the industry is facing.
At the same time, Eaze is California’s largest delivery operator, and the company operates in multiple states.
That includes Florida, where they are very well positioned to take advantage of recreational cannabis coming online next year.
A rising tide should lift all boats. We are doing our part to ensure that workers are rewarded for putting the company in a dominant market position.
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April 4, 2024 at 12:41 am
👍
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April 4, 2024 at 12:27 am
With all the talk about tipping culture being out of hand it’s almost comical that this CEO would consider tips as part of any compensation package he’s responsible for. How dare he! The customers are never obligated to tip but an employer is required to pay fair wages. I’d love to see all these salary cuts supposedly made. You can’t speak out of both sides of your face and expect it to not catch up to you. I think, at some point investors start to talk about your integrity or lack thereof.
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April 5, 2024 at 1:22 am
💯
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