CANNABIS LABOR PEACE AGREEMENTS
A labor peace agreement is not optional for California cannabis licensees with 10 or more employees — it is a condition of obtaining and renewing a DCC state license under MAUCRSA and DCC regulations. Failing to enter into an LPA, or failing to submit the required documentation with a license application or renewal, can result in application denial, renewal rejection, or license suspension. The Law Office of Shay Aaron Gilmore negotiates, reviews, and documents labor peace agreements for California cannabis operators, from pre-licensing preparation through ongoing union relations.
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The Labor Peace Agreement Requirement — What the Law Actually Requires
Statutory and Regulatory Basis
The LPA requirement originates in the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) and is codified in Business and Professions Code §26051.5(a)(3). DCC implementing regulations require cannabis licensees with 20 or more employees to provide a copy of a signed LPA, and licensees with 10 to 19 employees to provide a notarized statement (DCC Form DCC-LIC-027) that the applicant will enter into a labor peace agreement within 60 days of DCC notification. As of July 1, 2024, the effective threshold is 10 or more employees for new applicants, with DCC-confirmed guidance that existing licensees must comply upon renewal once they cross the 10-employee threshold.
What an LPA Must and Need Not Contain
The statutory minimum terms of an LPA are deliberately narrow. Under B&P §26051.5(a)(3), an LPA must include:
A union neutrality commitment — the employer agrees not to disrupt the labor organization’s efforts to communicate with and organize employees
A no-economic-action commitment — the labor organization agrees not to engage in picketing, work stoppages, boycotts, or other economic interference with the employer’s business during the term of the agreement
These are the two required elements. The LPA is not required to include recognition of the union as the exclusive bargaining representative, wage scales, grievance procedures, or any of the other terms that appear in a collective bargaining agreement. Unions frequently attempt to negotiate LPAs that include additional provisions beyond the statutory minimum — including card check recognition, expedited arbitration, and access rights. Legal review before signing is critical because provisions that exceed the statutory minimum can have lasting legal consequences for the operator’s labor relations.
The DCC Documentation Process
For operators with 10–19 employees, DCC Form DCC-LIC-027 must be signed by a notarized representative of the operator and submitted with the license application or renewal. The form attests that the operator will enter into a bona fide LPA within 60 days of DCC notification. For operators with 20 or more employees, the signed LPA itself must be submitted. Operators must retain a copy of the signed LPA and make it available for DCC inspection. A single LPA with one labor organization satisfies the requirement even if multiple unions approach the business — the licensee is not required to sign separate LPAs with each union that contacts it.
| LPA Requirement Element | 10–19 Employees | 20+ Employees |
|---|---|---|
| Required DCC submission | DCC Form DCC-LIC-027 (notarized) | Signed copy of LPA |
| Deadline to enter LPA | Within 60 days of DCC notification | Prior to or at application/renewal |
| Statutory minimum content | Union neutrality + no economic action | Same |
| Single LPA sufficient? | Yes — one union satisfies requirement | Yes |
| Failure to comply | Denial, renewal rejection, or suspension | Same |
| DCC form reference | DCC-LIC-027 | DCC-LIC-027 (with LPA attached) |
Negotiating an LPA — Strategic Considerations for Cannabis Operators
Identifying the Correct Union Counterparty
Common Union Demands Beyond the Statutory Minimum
Unions frequently propose LPA terms that go beyond the statutory two-element minimum, including:
- Card check recognition: Requires the employer to recognize the union as exclusive bargaining representative if a majority of employees sign authorization cards — bypassing the NLRB election process
- Access rights: Requires the employer to allow union organizers access to the worksite at specified times
- Neutrality expansion: Requires supervisors and managers to refrain from any communication about union organizing, beyond the narrower statutory neutrality commitment
- Expedited arbitration: Requires disputes about LPA compliance to be resolved through private arbitration rather than NLRB proceedings
None of these provisions are required by MAUCRSA. Agreeing to them voluntarily creates enforceable contractual obligations beyond what the DCC requires.
NLRA Preemption and Multi-Jurisdiction Operations
Cannabis vs. Hemp: Labor Peace Agreement Requirements
| Dimension | Cannabis Operator | Hemp Operator |
|---|---|---|
| LPA required? | Yes — for DCC licenses with 10+ employees (B&P §26051.5) | No — MAUCRSA does not apply to hemp |
| Governing labor law | NLRA (non-agricultural); ALRA may apply to cultivation | ALRA (agricultural cultivation); NLRA for processing/manufacturing |
| Union access to DCC form | DCC Form DCC-LIC-027 | No equivalent form |
| Consequence of non-compliance | License denial, rejection, or suspension | Not applicable |
| Social equity workforce conditions | May apply in equity-license jurisdictions | Not applicable |
| Transition risk | Hemp operator crossing into DCC licensing triggers LPA obligation once 10-employee threshold reached | Same — LPA required upon DCC licensure |
| Governing agency | DCC (licensing); NLRB (federal labor relations) | CDFA (registration); ALRB (agricultural labor relations) |
For hemp agricultural labor requirements and ALRA applicability, see Hemp Agricultural Labor & Workforce Compliance.
Representative Matters
Representative employment and labor law matters involving labor peace agreements include:
- Advised a multi-site dispensary group on LPA documentation requirements upon crossing the 20-employee threshold, coordinating DCC Form DCC-LIC-027 submission and LPA delivery as part of a license renewal filing.
- Counseled a cannabis cultivator on the transition from hemp-only operations to DCC-licensed cannabis manufacturing, identifying the point at which the LPA obligation was triggered and preparing the operator for union outreach.
Frequently Asked Questions
The 10-employee threshold applies per DCC license. The DCC counts all employees of the licensee — full-time, part-time, and temporary — who work at or are assigned to the licensed premises. Independent contractors do not count unless they are found to be employees under California law. If an operator holds multiple DCC licenses and the employees are shared across locations, the DCC may count total employees across all licenses held by the same legal entity. As of July 1, 2024, both new applicants and renewing licensees must comply once they meet the 10-employee threshold.
If a licensee with 10 or more employees does not have an LPA at the time of renewal, the licensee must submit DCC Form DCC-LIC-027 (for 10–19 employees) attesting that it will enter into an LPA within 60 days of DCC notification, or submit the signed LPA itself (for 20+ employees). Submitting the renewal without the required LPA documentation will result in the renewal application being deemed incomplete, which triggers a DCC notice and can result in license expiration if not cured within the response period. Do not submit a renewal without confirming LPA status in advance.
Yes. If multiple labor organizations approach the licensee, the licensee is only required to sign one LPA — with whichever bona fide labor organization it chooses. The licensee has no obligation to sign with the first union that contacts it, nor to give preference to any particular union. However, rejecting all union contact and failing to enter any LPA is not an option — the requirement is to enter into an LPA with a bona fide labor organization, not merely to be open to discussions. If no union has approached the operator, the operator typically contacts one of the active cannabis-sector unions to initiate LPA discussions.
Not necessarily. An LPA is not a collective bargaining agreement, and signing an LPA does not recognize the union as the exclusive bargaining representative of the employees. An LPA obligates the employer to remain neutral during organizing activity and the union to refrain from economic action — it does not obligate the union to organize, and it does not create a bargaining unit or establish a collective bargaining relationship. Unionization under the NLRA requires either a union election or a voluntary recognition agreement. An LPA does not require the employer to agree to either.
Operating a DCC-licensed cannabis business without a required LPA — or failing to submit the required DCC Form DCC-LIC-027 with a license application or renewal — can result in: (1) application denial or a finding that the application is incomplete; (2) renewal rejection; or (3) if discovered during a compliance audit or inspection after licensure, a DCC citation and potential license suspension. The DCC views the LPA requirement as a mandatory license condition, not a discretionary compliance item. It is not subject to waiver, and there is no informal conference process to negotiate the requirement away.
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