Virginia’s proposed cannabis labor peace mandate violates federal law

A version of the following public comment was submitted to the Virginia Senate Rehabilitation and Social Services Committee on February 27, 2026.

We are deeply concerned that House Bill 642 would unconstitutionally usurp the exclusive jurisdiction of the National Labor Relations Board to govern private-sector labor relations. Proposed section § 4.1-1001 would require an applicant for a marijuana establishment license or a holder of such a license to enter into and maintain a labor peace agreement with a bona fide labor organization as a condition of licensure.

The Supremacy Clause to the U.S. Constitution elevates federal law above state and local laws that may be in conflict, and federal law reserves to the National Labor Relations Board the sole authority to regulate private-sector labor relations. The proposed Virginia Cannabis Control Authority has no appropriate role or jurisdiction in determining whether applicants for licensure or licensees have complied with provisions of the National Labor Relations Act (NLRA).

Further, to the extent the Virginia Cannabis Control Authority would require an applicant to enter into a labor peace agreement as a condition of licensure, the agency would run afoul of relevant federal court precedents. The U.S. Supreme Court ruled in 1987 that the City of Los Angeles could not withhold the license of a taxicab company (a privileged license type similar to those for cannabis) based solely on the condition that the company resolve a labor dispute. The city’s regulation of private-sector labor disputes, noted the Court, was preempted by the National Labor Relations Board’s authority, and therefore no privileged license can be conditioned on a labor peace agreement. Similarly, a federal Court of Appeals ruled in 2005 that a provision in Wisconsin that would have required contractors with local governments to enter a labor peace agreement ran afoul of the National Labor Relations Act.

Last year, a federal district court struck down an Oregon law that would have required that state’s regulated marijuana establishments to enter a labor peace agreement as a condition of licensure. In that ruling, Judge Michael Simon plainly stated the law was “preempted by the NLRA in violation of the Supremacy Clause” and that “the NLRA does not limit its jurisdiction to ‘lawful commerce’ or ‘legal substance’ as some other federal laws do.”

Although proponents point to provisions within other states’ marijuana regulation schemes to justify a proposed labor peace requirement, the law is clear and unambiguous: states do not have the authority to force marijuana licensees to sign a labor peace agreement. It’s true that California’s rules require a marijuana licensee with more than 20 employees to enter a labor peace agreement. But many legal scholars expect the California rule to eventually be struck down as violative of the NLRA. In the meantime, many licensed cannabis growers in California have avoided the requirement altogether by contracting with farm labor services or otherwise structuring their operations such that no licensed entity exceeds the threshold of 20 direct employees.

We believe federal law is clear on these issues and excludes states from enacting requirements such as those contained in House Bill 642. Even where states enact marijuana laws that may conflict with federal interpretation of the Controlled Substances Act, those states still have no leeway within such laws to simultaneously usurp or violate federal labor law. We are concerned that these actions could invite increased federal intervention in state-regulated marijuana markets more broadly if states continue to include provisions that are clearly beyond their authority.

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