Eaze Technologies and union negotiators announced on Wednesday they have reached a settlement to avoid a work stoppage across California on April 20, the marijuana industry’s busiest retail day of the year.
Threat of Strike
Nearly 600 workers threatened to strike after ongoing disputes over pay and working conditions.
Eaze Company Background
Workers from 11 depots owned by Eaze, a weed-delivering company based in southern and northern California, unionized in March 2023 following driver safety, health insurance, and work schedule issues.
United Food and Commercial Workers Union
Workers overwhelmingly voted to unionize with United Food and Commercial Workers, and the company has slowly been cutting workers’ benefits since—cutting pay, mileage rates for drivers, staffing levels, and work schedules.
Unfair Labor Practice Charges
While workers have filed unfair labor practice charges with the National Labor Relations Board, there had been no movement in negotiations from Eaze.
Vote for Strike
Workers overwhelmingly voted to strike with a 95% margin.
Workers’ Ultimatum to Eaze
“We are totally willing to negotiate, and if you want to give us a deal, we are into it, but if you won’t, we will strike,” one driver said at a news conference.
Mileage Rate Cuts
Since the company cut mileage rates from 65.5 cents a mile (a figure recommended by the IRS) to 42 cents, drivers were losing between $300 and $700 a month, depending on their hours.
Out-of-Pocket Costs
Workers complained about out-of-pocket costs for repairs on the personal vehicles they use for work.
Financial Struggles
One driver ran over some debris on a highway and had to pay thousands of dollars to cover the fees. As his mileage had been cut, he was forced to take out a loan to cover it. This was with his insurance.
Worker Safety
Workers are also concerned about their safety after Eaze got rid of armed security at a number of depots. It came at a worrying time for staff, who have seen burglaries and robberies at cannabis businesses on the rise since 2022.
Eaze’s Financial Standing
One worker challenged Eaze’s stance on affordability, questioning why the company, touted as the nation’s top cannabis-delivery provider, doesn’t prioritize adequate support for workers’ success and safety. “We are struggling to cover our expenses under this lower-tiered mileage.”
Eaze: The Uber Of Cannabis
When Eaze launched in 2014, it was valued at $700 million, with more than $255 million raised from investment capital at the time. It was hailed as the “Uber of weed” and had backing from rapper Snoop Dogg among others.
Cash Flow, Legal Issues, and Leadership
However, the company has struggled. Cash flow problems and legal issues compounded by the former CEO’s involvement in a $100 million bank fraud scheme have complicated the company’s position.
Legal Allegations
Just last year, Green Dragon, another cannabis distributor that merged with Eaze in 2021, filed a lawsuit accusing them of defrauding investors by lying about its finances in order to push through the merger.
CEO’s Response
Eaze CEO Cory Azzalino has denied all claims from workers about low pay and poor conditions. “In an industry being suffocated from high taxes and over-regulation, Eaze pays our drivers fair wages averaging over $25 per hour including tips, as well as benefits and consistent scheduling,” he said in an email.
Eaze’s Perspective
“Eaze has not earned a profit in its history, so this is not the case of old industry hoarding profits.”
Preparations for Strike
Azzalino also announced plans to keep the businesses running should the strike had gone ahead. He said the company was hiring a “large cohort of new drivers” and was “preparing itself to maintain operations in the event of a strike.”
Maintaining Operations
“Corporate and depot staff will assist in keeping operations as normal as possible for our customers,” Azzalino said in a statement.
Strike Repercussions
A strike before 4/20 threatened significant profit loss for Eaze, potentially disrupting delivery and sales statewide during a day known for record-breaking sales due to promotions and discounts.
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The post California’s Cannabis Delivery Workers Secure Deal, Cancel 4/20 Strike Threat first appeared on From Frugal to Free.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
