Oregon state officials are urging a federal appeals court to reinstate a voter-approved law that mandated labor peace agreements for cannabis businesses, a measure a lower federal court had previously blocked. The state is contesting a ruling that declared Measure 119 unconstitutional, citing violations of free speech and conflicts with federal labor law. This article explains oregon cannabis labor law and why it matters.
Background: Measure 119 and Labor Protections — Oregon cannabis labor law
Measure 119, known as the United for Cannabis Workers Act, was approved by Oregon voters in November 2024 and took effect on December 5, 2024. The initiative required licensed cannabis retailers and processors to enter into a labor peace agreement (LPA) with a labor union or provide an attestation of such an agreement as a condition for obtaining or renewing their business licenses. A key component of these agreements was a mandate for employer neutrality in unionization discussions. Supporters of the measure, led by the United Food and Commercial Workers (UFCW) Local 555, argued that it was necessary to protect workers in the cannabis industry, who they contended were often denied basic labor rights due to the federal illegality of marijuana. They pointed to concerns about workplace safety and potential retaliation against employees seeking to unionize.
Legal Challenge and District Court’s Decision
Shortly after Measure 119 became law, two Oregon-based cannabis businesses, Bubble’s Hash and Ascend Dispensary, filed a lawsuit challenging its enforcement. The plaintiffs contended that the law infringed upon their First Amendment rights to free speech and was preempted by the federal National Labor Relations Act (NLRA). They argued that the mandated employer neutrality restricted their ability to express views on unionization, even non-coercive ones.
On May 20, 2025, U.S. District Judge Michael H. Simon sided with the businesses, issuing a permanent injunction against Measure 119. Judge Simon ruled that the law was unconstitutional, finding it violated the First Amendment by prohibiting all employer speech that was not neutral toward unionization, without distinguishing between protected and unprotected speech. He also determined that the law was preempted by the NLRA, concluding that it upset the balance of power between labor and management that Congress intended to preserve and regulated conduct arguably protected or prohibited by federal labor law. The court specified that the NLRA’s jurisdiction extends to cannabis businesses regardless of the federal legal status of marijuana. This decision marked the first time a U.S. District Court invalidated a state law mandating LPAs for cannabis licensing.
Oregon Officials’ Appeal to the Ninth Circuit
In response to the district court’s ruling, Oregon officials, including Governor Tina Kotek, Attorney General Dan Rayfield, and Oregon Liquor and Cannabis Commission (OLCC) officials Dennis Doherty and Craig Prins, have initiated an appeal. They have filed a motion with the U.S. Court of Appeals for the Ninth Circuit, urging a review and reversal of the decision. The state’s legal brief asserts that Measure 119 is constitutional and does not prohibit employers from expressing their views on unionization, thus not conflicting with the First Amendment or the NLRA. Oregon officials previously signaled their intent to contest the ruling in June 2025, following the district court’s May decision.
Implications for Oregon’s Cannabis Industry
The legal battle over Measure 119 has significant implications for the growing Oregon cannabis sector and labor relations within it. While the district court’s ruling effectively halted enforcement of the law, the state’s appeal keeps the outcome uncertain. If the state is successful in its appeal, Measure 119 could be reinstated, potentially requiring businesses to comply with LPA mandates or face license denial or revocation. Conversely, if the Ninth Circuit upholds the lower court’s decision, it could set a persuasive precedent for similar labor law challenges in other states that have implemented or are considering LPA requirements for cannabis businesses. The OLCC has stated it will no longer require LPAs as part of license applications and renewals pending the appeal outcome.
The ongoing legal proceedings highlight the complex intersection of state-level cannabis regulation, federal labor law, and constitutional protections. The Ninth Circuit’s decision will be closely watched by industry stakeholders, labor unions, and legal experts across the country.
Sources: Reuters
