Oregon Officials Appeal Ruling Striking Down Cannabis Labor Law

Oregon officials are asking a federal appeals court to reinstate a voter-approved Oregon cannabis labor law that was struck down earlier this year. The law, known as Measure 119, requires marijuana businesses to sign labor peace agreements and remain neutral during unionization discussions. A federal judge ruled the measure unconstitutional in June, but state leaders say the decision should be reversed.

Key Takeaways

• Measure 119, passed by Oregon voters in 2024, requires cannabis businesses to enter labor peace agreements.
• A federal judge struck down the law, citing conflicts with the First Amendment and the National Labor Relations Act (NLRA).
• State officials, including Gov. Tina Kotek and Attorney General Dan Rayfield, have filed an appeal with the Ninth Circuit.
• Oregon argues the law regulates commercial activity in a highly restricted cannabis market and does not suppress free speech.
• The outcome could set a precedent for labor protections in the cannabis industry nationwide.

Oregon Cannabis Labor Law at the Center of Appeal

The measure was approved with about 57 percent of the vote last November after UFCW Local 555 gathered more than 160,000 signatures to qualify it for the ballot. It would require marijuana licensees to maintain neutrality on unionization and prove compliance through labor peace agreements or risk losing their license.

In May, a federal judge sided with two businesses – Bubble’s Hash and Ascend Dispensary – finding that the law violated employer free speech rights and was preempted by the NLRA. The ruling paused enforcement of Measure 119 before it could take effect.

Now, Gov. Kotek, Attorney General Rayfield, and Oregon Liquor and Cannabis Commission officials are asking the U.S. Court of Appeals for the Ninth Circuit to reverse that decision.

State’s Argument for Reversal

Oregon’s appeal argues the cannabis labor law does not silence employers but sets fair conditions in a market Congress has allowed states to tightly regulate.

“The challenged law is constitutional because it does not in fact prohibit employers from expressing their views on any topic including unionization,” state attorneys wrote.

Officials also contend that even if the law limits some employer expression, that impact is permissible because it applies only to commercial speech and survives constitutional scrutiny.

Industry and Union Reaction

Supporters of Measure 119 say it ensures cannabis workers can organize without fear of retaliation. They argue that neutrality requirements are necessary in an industry where many businesses are new and workers often face unstable conditions.

Opponents see it differently. The cannabis companies who sued say the law unfairly restricts employer speech and undermines the debate process protected under federal labor law.

National Implications for Cannabis Labor Rule

The Oregon cannabis labor law is among the first voter-approved efforts to link marijuana licensing directly to union rights. While labor peace agreements are common in gaming and hospitality, their application in cannabis is still contested.

If the Ninth Circuit sides with Oregon, it could embolden other states to pass similar laws. If the ruling is upheld, however, it may discourage labor protections tied to cannabis licensing in future ballot measures.

Conclusion

The fight over Oregon’s cannabis labor law is more than a local dispute. It’s a test of how far states can go in regulating marijuana businesses and protecting workers without clashing with federal labor protections. The Ninth Circuit’s decision will likely shape how labor and cannabis policy intersect across the U.S.