Oregon Just Repealed the Cannabis Labor Law Its Own Voters Passed

Oregon Governor Tina Kotek signed HB4162 on March 31st, officially repealing Ballot Measure 119 — the 2024 voter-approved law that required cannabis businesses to sign labor peace agreements with unions before operating. The repeal closes what one cannabis attorney called “the strangest self-inflicted legal detour” in the state’s cannabis history: a union-backed law that voters approved, a federal judge struck down, and the union then quietly asked the legislature to bury before the appellate court could make things worse.

Measure 119 is now gone. The pending Ninth Circuit appeal will almost certainly be dismissed as moot.

What This Bill Actually Does

HB4162 is a one-liner: it repeals Oregon Revised Statutes sections created by Ballot Measure 119 (2024). Those sections required Oregon Liquor and Cannabis Commission (OLCC) licensees — dispensaries, processors, growers — to enter “labor peace agreements” with bona fide labor organizations as a condition of holding a state cannabis license.

A labor peace agreement, in plain terms: the employer agrees to stay neutral while a union organizes workers, and workers agree not to strike or picket during that period. BM 119 made this a licensing requirement — if you didn’t sign, you couldn’t operate in Oregon.

With HB4162 signed, that requirement no longer exists. Cannabis businesses do not have to enter any labor peace agreement to get or keep their OLCC license. Oregon workers’ rights to organize remain intact under federal law — they just lose the state-imposed employer neutrality obligation.

Who It Affects

Roughly 900 OLCC-licensed cannabis businesses in Oregon — dispensaries, producers, processors, and wholesalers — are now free of the labor peace requirement immediately. Most had never complied anyway, because a federal injunction had blocked enforcement since the law was challenged in court.

For cannabis workers — roughly 14,000 employed in Oregon’s regulated market — the practical day-to-day impact is more muted. Federal labor law still gives them the right to organize. What they lose is the specific leverage Measure 119 provided: a state law forcing employers to remain neutral during organizing campaigns.

UFCW Local 555, which represents grocery and retail workers and was the driving force behind BM 119, organized union campaigns at several Portland-area dispensaries during the window when the law was in effect but not yet enjoined. Those unionized shops remain unionized. HB4162 doesn’t touch existing collective bargaining agreements.

The Direction

This is a clear step backward for cannabis labor organizing infrastructure — and a release valve for the Oregon cannabis industry, which had been living under legal uncertainty since May 2025 when U.S. District Judge Adrienne Nelson ruled BM 119 was preempted by the National Labor Relations Act.

Nelson’s logic: the NLRA already governs union organizing. States can’t layer additional organizing conditions on top of federal law without running into federal preemption. Oregon voters didn’t know they were passing an unconstitutional law — they thought they were supporting workers. They weren’t wrong on the values; the legal mechanism was the problem.

Oregon is not the first state to try this. California passed a similar law for cannabis businesses in 2021. That law survived initial legal challenge in a California federal court — creating the “conflicting federal rulings” situation UFCW 555 cited when BM 119 was enjoined. But California’s law was enacted by the legislature, not by ballot initiative, which changes the political calculus for repeal.

Nationally, the cannabis labor movement has had mixed results. Several states have tried to require labor peace agreements. Several have faced preemption challenges. Oregon’s repeal doesn’t settle the constitutional debate — it just exits it.

What Happens Next

– The Ninth Circuit appeal UFCW had pending will almost certainly be dismissed as moot now that the underlying law is gone. Dismissal clears the conflicting federal district court rulings without resolving the constitutional question nationally. – OLCC rulemaking: The Commission will need to update its licensing rules to remove any reference to labor peace agreements. This is administrative, not legislative, and should happen within months. – UFCW’s next move: Unknown. The union could attempt another ballot initiative — but would need a different legal architecture to survive federal preemption review. More likely they focus organizing efforts on individual workplace campaigns, which don’t require state law backing. – HB4142 (the cannabis hospice/palliative care bill) is still awaiting Kotek’s signature or lapse date of April 17. That one has nothing to do with HB4162 and is expected to become law automatically if Kotek takes no action.

Who’s Behind This

UFCW Local 555 (Oregon/SW Washington) The union that built this law and then asked the legislature to tear it down. UFCW 555 represents approximately 37,000 workers across grocery, retail, and cannabis. They pushed the 2024 ballot initiative after failing twice to pass a similar requirement through the legislature — in part because the Office of Legislative Counsel flagged preemption concerns. When a federal judge agreed with those concerns in 2025, UFCW faced a choice: fight on at the Ninth Circuit (risky, could produce bad national precedent), or ask the legislature to repeal before the appeals court ruled. They chose retreat. That’s not cynical; it’s pragmatic. But it leaves Oregon cannabis workers without a structural organizing advantage that UFCW spent considerable political capital to build.

Governor Tina Kotek (D-Oregon) Kotek was named as a defendant in the original lawsuit challenging BM 119 — that’s standard, since she heads the executive branch that would enforce the law. Her office said she “respects the court’s ruling.” Signing a repeal of a voter-approved law is politically uncomfortable for a Democrat, and she gave the bill no fanfare. Kotek has generally been supportive of cannabis reform and labor, but she also doesn’t have an appetite for defending laws that federal courts have already ruled unconstitutional. Her signature here is a practical legal cleanup, not an ideological statement against workers.

Oregon cannabis industry operators The lobbying coalition behind HB4162 includes the Oregon Cannabis Association and individual multi-location operators who had been operating under injunction uncertainty since 2025. They were the plaintiffs in the original lawsuit, and they win cleanly here. Their stated position: the law was unconstitutional and created licensing uncertainty. Their actual interest: avoiding mandatory union neutrality obligations that could accelerate organizing across the supply chain. Both can be true simultaneously.

Cannabis workers The true diffuse stakeholders here are the roughly 14,000 people working in Oregon’s regulated market — many in hourly dispensary roles earning between $15–$22/hour in a market notorious for tight margins and high turnover. They weren’t organized under Measure 119 in most cases, because the law spent most of its short life under injunction. What they lose is theoretical leverage. What they still have: the NLRA, the right to organize, and the example of several Portland shops that unionized voluntarily.

The Bottom Line

Oregon voters passed a cannabis labor law in 2024 that a federal court ruled unconstitutional in 2025. Rather than risk a worse ruling at the appellate level, the union that built it asked the legislature to delete it — and the Democratic governor agreed. The result: the law is gone, the legal fight is probably over, and Oregon cannabis workers are back to organizing under the same rules as every other industry. That’s not nothing — federal labor law still applies — but it’s a quieter path than the union hoped it had built.

For cannabis employers in Oregon, it’s a clean win. For workers, it’s the law returning to baseline.

Jo Tanaka is CannabisInquirer’s West/Pacific Correspondent, based in Portland.