The Law Office of Shay Aaron Gilmore – Cannabis Lawyer San Francisco
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Shay Aaron Gilmore – California Cannabis and Hemp Business Lawyer

Employment and Labor Law

Trusted Cannabis and Hemp Business Workforce Counsel

California cannabis employers face all the usual complexities of state and federal employment law, layered with industry‑specific requirements around labor peace agreements, workplace safety, social equity commitments, and background checks. The firm counsels cultivators, manufacturers, distributors, testing laboratories, and retailers on designing compliant employment structures that can withstand scrutiny from regulators, counterparties, and employees.

Work includes drafting and updating employee handbooks tailored to cannabis operations, negotiating executive and key‑employee agreements, and preparing offer letters, separation agreements, and independent‑contractor documentation. The practice also advises on disciplinary processes, internal investigations, restructurings, and reductions in force that intersect with licensing and equity‑ownership requirements.

Where corporate and employment issues overlap—such as ownership changes that affect management roles, landlord‑operator relationships, and disputes among working members—the firm aligns employment documentation with corporate governance and regulatory filings so personnel decisions do not inadvertently trigger licensing or disclosure problems.

Cultivators, distributors, manufacturers, testing labs, and retailers each face a distinct set of workplace challenges specific to their supply chain positions. The Law Office of Shay Aaron Gilmore offers a sophisticated understanding of these unique issues, helping cannabis and hemp businesses navigate a broad range of organized labor and employment issues, including:

What Types of Labor and Employment Issues Do Cannabis and Hemp Businesses Face?

From Shay’s interview for the Master’s series on ReelLawyers.com

Some of the labor and employment issues I encounter in my law practice while working with cannabis and hemp operators include drug testing and drug-free workplace policies, unionization and collective bargaining, immigration and employment eligibility, workforce development, and compliance with regulatory and licensing requirements.

Drug Testing, Off-Duty Cannabis Use, and the Cannabis–Hemp Employer Divide California employers in the cannabis and hemp industries face a layered set of drug-testing and off-duty-use rules that differ based on the employer’s industry classification and the nature of the work being performed. Assembly Bill 2188, which took effect January 1, 2024, prohibits most California employers from taking adverse employment action — including termination, refusal to hire, or any change in terms and conditions of employment — against employees or applicants based on their off-duty, off-site cannabis use, or based on a drug test that detects only non-psychoactive cannabis metabolites rather than active THC. Employers can still prohibit employees from being impaired on the job, and the law exempts employees in the building and construction trades and positions requiring a federal background investigation or security clearance — but for most cannabis and hemp companies, AB 2188 means that pre-employment and random drug testing programs must be redesigned around tests that identify current impairment, not historical use. The practical consequences differ for cannabis operators and hemp operators. Licensed cannabis employers are subject to DCC regulations that require at least one supervisor and one employee to complete a Cal/OSHA 30-hour General Industry outreach course within one year of receiving or renewing a license, and to maintain a written Injury and Illness Prevention Program that addresses cannabis-specific hazards — including exposure to airborne contaminants, flammable extraction solvents, repetitive-motion injuries, and the security risks created by high-value inventory and cash-heavy operations. Industrial hemp cultivation employers, on the other hand, are classified as agricultural operations and are subject to a separate regulatory track: the California Department of Pesticide Regulation’s worker safety standards under 3 CCR section 6700 et seq., including annual pesticide safety training, decontamination facilities, and field reentry interval compliance — all enforced by county agricultural commissioners rather than the DCC. Hemp employers with field workers may also fall under the Agricultural Labor Relations Act for collective-bargaining purposes, whereas the NLRB has issued conflicting guidance on whether cannabis cultivation employees qualify as agricultural laborers exempt from the National Labor Relations Act — a distinction that determines whether federal or state labor law governs unionization efforts at a given facility. The firm advises cannabis and hemp employers on building compliant drug-testing policies under AB 2188, developing IIPPs and workplace safety programs that reflect the specific hazards of each industry, and navigating the labor-law classification questions that determine which collective-bargaining framework applies.

The firm provides Employment and Labor Law services to cannabis and hemp operators and investors in:

Related cannabis and hemp business services include: A complete list of Shay’s recent presentations, white papers, and legal articles is available on the Media page. Shay regularly publishes Employment & Labor Law updates and insights on his Cannabis and Hemp Law Blog.

Focused on Practical Employment and Labor Law Solutions

With the many layers of local rules and state and federal laws, managing a cannabis or hemp workforce in today’s complex regulatory environment can be challenging. That is why The Law Office of Shay Aaron Gilmore provides a comprehensive range of services designed to help cannabis and hemp businesses and investors manage their workforces, mitigate labor and employment risks, and ensure compliance with applicable labor and employment laws and regulations, including:

What Are Some Common Mistakes You See Cannabis Businesses Make in Employment Matters?

From Shay’s interview for the Master’s series on ReelLawyers.com

Some of the mistakes I see cannabis and hemp employers making when it comes to workplace issues include non-compliance with wage and hour laws, and a lack of proper workplace safety measures. Many also overlook OSHA standards, which absolutely apply to cannabis and hemp businesses.

Additionally, inadequate or outdated employee policies and handbooks can be a significant problem, especially if they aren’t kept current with evolving regulations affecting the industry.

Ongoing workforce management and development is central to the success of any cannabis business. From offers to new workers, to employee handbooks, to separation agreements, cannabis businesses need to maintain a productive and efficient team throughout the employment lifecycle, from onboarding to separation, while protecting the company’s confidential and proprietary information. 

The Law Office of Shay Aaron Gilmore can guide your cannabis or hemp business consistent with the letter and spirit of the employment and labor laws and regulations shaping these sectors.

Representative Matters:

  • Represented a vertically integrated cannabis operator in overhauling its statewide employee handbook and disciplinary procedures following multiple wage-and-hour complaints, aligning policies with California labor law, labor peace obligations, and local social equity commitments while avoiding disruption to ongoing licensing renewals.
  • Advised a multi-site dispensary group on restructuring its management and workforce after a change of ownership, including executive employment agreements, equity-based compensation for key employees, and separation agreements for departing founders, ensuring that all personnel changes remained consistent with Department of Cannabis Control ownership and disclosure requirements.
  • Counseled a licensed manufacturer facing a union organizing campaign on labor peace agreement negotiations, background check and drug testing policies, and reasonable accommodation practices, helping the company reach a compliant agreement with organized labor and reduce the risk of unfair labor practice charges or license-related repercussions.
Labor Peace Agreements, Social Equity Workforce Requirements, and Employee Structures Across Cannabis and Hemp One of the most significant employment-law obligations unique to the cannabis industry in California is the labor peace agreement requirement. Under MAUCRSA and DCC regulations, any cannabis licensee with 10 or more employees (effective July 1, 2024) must enter into a labor peace agreement with a bona fide labor organization as a condition of obtaining or renewing a state cannabis license. An LPA is a private contract between an employer and a union under which the employer agrees not to disrupt the union’s efforts to communicate with and organize employees, and the union agrees not to engage in picketing, work stoppages, boycotts, or other economic interference with the employer’s business. Failure to enter into an LPA — or failure to submit the required notarized statement (DCC Form DCC-LIC-027) with a license application or renewal — can result in application denial, renewal rejection, or license suspension. Importantly, the licensee is only required to enter into an LPA with one labor organization, even if multiple unions approach the business, and the statutory minimum terms of an LPA are narrower than what unions typically propose — making legal review of the specific LPA language critical before signing. Industrial hemp businesses have no labor peace agreement requirement. Because hemp is regulated by the CDFA rather than the DCC, and MAUCRSA does not apply to hemp operations, hemp employers are not required to negotiate or maintain an LPA as a condition of registration — even if they employ hundreds of field workers or processing-facility staff. This distinction matters not only for ongoing compliance but also for companies transitioning between the two industries: a hemp processor that obtains a DCC manufacturing or distribution license for cannabis products will trigger the LPA requirement once it crosses the 10-employee threshold on the cannabis side, even if the same workforce was previously employed exclusively in hemp operations that required no LPA. Social equity license conditions add another employment-law layer for cannabis businesses. Many local equity programs — including those in Los Angeles, Oakland, Sacramento, and San Francisco — impose local-hire, workforce-development, or community-reinvestment obligations as conditions of equity licenses or permits, requiring licensees to hire a specified percentage of employees from designated neighborhoods, provide job training, or fund community programs. These conditions function as binding employment commitments enforceable through the local licensing process, and non-compliance can jeopardize the license itself. Hemp businesses face no equivalent local equity workforce requirements. The firm advises cannabis and hemp employers on negotiating labor peace agreements that satisfy DCC requirements without conceding rights unnecessarily, structuring workforce plans that meet local equity conditions, and managing the employment-law transition when a business expands from hemp-only operations into DCC-licensed cannabis activity.