Summary — SB 726: Cannabis Licensees — Bona Fide Labor Organizations and Labor Peace Agreements
Status
- Bill number: SB 726
- Title: Cannabis Licensees — Bona Fide Labor Organizations and Labor Peace Agreements
- Introduced: (per materials provided) Feb 21, 2025
- Hearing scheduled: 3/06 at 1:00 p.m.
- Effective date in bill text: October 1, 2025
Purpose
- Require cannabis licensees to enter and maintain a “labor peace agreement” with bona fide labor organizations as a condition of licensure (specifically prior to the first license renewal), and to give qualifying labor organizations a formal avenue to challenge license renewals.
Key provisions
- New definitions added to the Alcoholic Beverages and Cannabis statute:
- “Bona fide labor organization”: a labor organization that complies with 29 U.S.C. § 431 and is actively spending resources to organize employees of a cannabis licensee.
- “Labor peace agreement”: an agreement between a bona fide labor organization and a cannabis licensee that prohibits the labor organization from engaging in picketing, work stoppages, or boycotts against the licensee.
- Licensing requirement:
- Prior to a cannabis licensee’s first renewal (including converted licenses), the licensee must execute a labor peace agreement; after renewal, the licensee must maintain and abide by that agreement as a condition of continuing licensure.
- Administration/regulation:
- The Maryland Cannabis Administration (MCA) must adopt implementing regulations and consider specified factors when determining whether a labor organization is “bona fide.”
- Factors MCA must consider include: whether the organization is a bargaining representative or party to a bargaining agreement; whether it is actively organizing employees and assigning paid staff; recent filing of grievances (within 6 months); history of picketing/strikes/boycott calls within the prior 2 years; in-state presence; and affiliation with regional/national labor councils.
- Protest authority:
- A bona fide labor organization is authorized to file a protest against a cannabis license renewal (an alternative to the existing requirement that renewal protests be filed by at least 10 nearby individuals).
Who is affected
- Cannabis licensees (medical and adult‑use) seeking renewal of their state license — they must enter and continue to honor labor peace agreements.
- Labor organizations seeking to organize cannabis industry employees — establishes criteria for recognition as a bona fide organization and grants standing to protest renewals.
- Maryland Cannabis Administration — required to create regulations and adjudicate renewal protests under the new standards.
- Potential indirect effects on employees, license applicants, consumers, and local governments through changed industry practices.
Fiscal and procedural impacts
- Fiscal note (Maryland Department of Legislative Services): MCA special fund expenditures increase (first shown in FY 2028) — estimated additional costs of $36,700 in FY 2028 and growing thereafter. The note reports corresponding special fund revenue increases (to cover MCA costs) and reductions in the amount of sales and use tax revenue available for distribution to the general fund and local governments. Example estimates:
- FY 2028: GF revenue −$18,300; SF expenditure +$23,900; net effect −$22,000.
- FY 2029: GF revenue −$48,600; SF expenditure +$57,400; net effect −$53,000.
- Local government revenues are projected to decrease beginning FY 2028 due to redistribution effects noted in the fiscal analysis.
- Small business effects are characterized as “meaningful” in the fiscal note (likely because labor agreements and potential organizing activities may affect operational costs).
- MCA must promulgate implementing regulations and incorporate the labor‑peace requirement into renewal review procedures; the requirement attaches at first renewal after initial licensure.
Considerations / context
- The bill aligns licensure renewal with labor‑relations oversight by conditioning continued licensure on a commitment to a labor‑peace framework and by granting certain unions standing to protest renewals.
- The bill specifies objective factors MCA must weigh when recognizing bona fide labor organizations but does not itself mandate unionization or collective bargaining outcomes.
