500-plus Eaze Cannabis Delivery Drivers Threaten to Strike Ahead of 4/20

More than 500 California cannabis delivery drivers at Eaze/Stachs voted April 2 to authorize a potential strike after union contract negotiations with the company remain at a deadlock. Stachs is Eaze’s plant-touching subsidiary.

The negotiations—revolving around mileage reimbursements, hourly wages and minimum work hours—have been ongoing since August 2023, with Eaze offering its “last, best and final” contract proposal on March 19, according to the United Food and Commercial Workers International Union (UFCW). The union’s Local 5, 135, 324 and 770 chapters rejected the company’s offer, according to UFCW.

If necessary, the workers will call for a strike ahead of the 4/20 holiday—April 20 is traditionally the largest sales day of the year for the cannabis industry.

The union’s negotiating team includes more than a dozen Eaze employees who represent workers from 11 delivery depots, including six in Southern California and five in Northern California, according to UFCW.

“Eaze/Stachs’ billionaire financial backers have been getting richer off our labor while company management has cut hours, raised health insurance premiums, and eliminated security officers,” Ron Swallow, a Van Nuys depot delivery driver and member of Local 770’s negotiating team, said in a UFCW press release.

“Cannabis delivery depots are not the safest environments for drivers, who carry a lot of cash and product,” Swallow said. “Our proposals are perfectly reasonable; we just want to be able to pay our bills on time.”

Paying bills on time is also an issue that has translated to the cannabis industry, where a credit conundrum began to spin out of control across the supply chain in 2022 and 2023, with licensees reportedly unable to collect on delivery from other licensees. For example, when retailers don’t pay brand distributors at the point of purchase, then distributors can’t pay manufacturers, and manufacturers can’t pay farmers.

As a result of this and other industry variables, many cannabis companies halted their strategic growth plans and downsized operations throughout much of 2022 and 2023: laying off workers, cutting wages and exiting markets.

“In an industry being suffocated from high taxes and overregulation, Eaze pays our drivers fair wages averaging over $25 per hour including tips, as well as benefits and consistent scheduling,” Eaze CEO Cory Azzalino told Cannabis Business Times. “Eaze’s driver tenure is over 2.4 years with limited turnover and a sizable applicant pool more than 2x our current labor force, which is evidence of a reasonable compensation package. Eaze has not earned a profit in its history, so this is not the case of old industry hoarding profits.”

Eaze reimburses drivers at $0.39-$0.42 per mile and has offered $0.45 per mile, according to the company, or 10 cents per mile more than the current state-mandated minimum following California voters’ passage of Proposition 22 in 2020. 

This comes at a time when Eaze has cut corporate salary expenses by 70% since 2022 in order to stay in business, according to the company.

It also comes at a time when many California cannabis companies have failed to stay afloat amid economic headwinds, price compression and burdensome taxes. This includes the fall of Grassdoor, a delivery behemoth that began insolvency proceedings in November; the collapse of distribution giant Herbl, which was placed in receivership in mid-2023 after falling behind on a loan; as well as several other cannabis companies experiencing failures in the Golden State.

Amid halted contract negotiations at Eaze, union organizers filed charges against the company with the National Labor Relations Board, according to UFCW. These charges, according to the union, include:

1. the company’s unilateral change to the driver’s mileage reimbursement, and
2. not providing requested information that the company is legally required to provide.
   

“Stachs claims poverty to the union in negotiations. But they are claiming growth and prosperity in interviews seen by the public and shareholders,” Kerry McCue, a San Diego delivery driver and UFCW Local 135 union steward, said in the release. “No one wants to put the company out of business; we love our jobs. That is why we are fighting for fair compensation. California is the most expensive state in the country to live in. We are single parents, and veterans, and students and everyday people just trying to work hard and make enough to pay our bills.”

The union’s negotiating team remains committed to reaching a “mutually beneficial agreement” with the company to avoid a potential work stoppage, according to UFCW.

Meanwhile, Eaze is preparing itself to maintain operations in the event of a strike, according to the company