Eaze cannabis delivery drivers threaten strike ahead of annual pot day
California cannabis delivery company Eaze may face a work stoppage by April 20, a peak sales time for weed businesses.
Nearly 600 cannabis delivery drivers and depot staff across California who work at Eaze and its subsidiary Stachs are represented by various locals of the United Food and Commercial Workers International Union.
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Last week, they voted to approve a strike, the union said, after contract negotiations with Eaze stalled over disagreements about hourly wages and the mileage reimbursement rate for drivers, who use their own cars to make deliveries. The vote gives leaders the authority to call a strike if contract talks stall at a bargaining session scheduled for Monday.
“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,” Ron Swallow, a delivery driver at Eaze’s depot in Van Nuys, said at a Wednesday news conference held by UFCW Local 770, which represents 180 workers at Eaze depots in Southern California.
Workers at Swallow’s depot in Van Nuys approved a strike authorization by a 95% margin, he said.
“I am super proud of all my co-workers. They have stood united while their cars fell apart, while their rent is two months late,” Swallow said.
Ed Gutierrez, deputy director of UFCW Local 770’s cannabis division, said a super-majority of Eaze workers across the state voted in favor of a strike. The union declined to disclose a specific percentage and total number of ballots cast.
Cory Azzalino, Eaze’s chief executive , said the company is hiring a “large cohort of new drivers” in anticipation of a work stoppage.
“Eaze is preparing itself to maintain operations in the event of a strike,” Azzalino said. “Corporate and depot staff will assist in keeping operations as normal as possible for our customers.”
Eaze, the largest multi-state cannabis delivery operator in the U.S., launched in 2014 and was valued at $700 million, with more than $255 million in total investment capital raised, according to TechCrunch.
But the San Francisco company has struggled with cash flow problems and legal issues, with its former CEO pleading guilty to a $100-million bank fraud scheme.
A lawsuit filed last year by the founders of Green Dragon, a cannabis retail company that merged with Eaze in late 2021, accused Eaze of defrauding investors by intentionally concealing its poor finances in order to finalize the merger.
Stachs and Eaze workers at the Van Nuys depot voted to unionize in March 2023, with workers in La Brea, Gardena, Silverlake and other Southern California locations following suit later that year.
Six depots in Southern California and five in Northern California have unionized with various UFCW locals, which are coordinating to negotiate a statewide contract. Negotiations began in August .
UFCW Local 770 counts about 700 cannabis workers among the 31,000 healthcare, retail, grocery, and packing workers it represents in Southern California. Some Eaze workers in Sacramento recently unionized with the Teamsters.
Delivery drivers have complained that the company’s decision last summer to slash the reimbursement rate for drivers from the 65.5 cents per mile rate recommended by the IRS to about 40 cents per mile — with slight variation depending on location — has cut drivers’ pay by $300 to $700 a month. Drivers earn minimum wage, plus tips.
Another sticking point is Eaze’s use of a third-party company, Motus, to calculate a variable mileage rate based on where drivers are and gas prices, which drivers said keeps them in the dark about how their reimbursement is calculated.
Lori Riehle, a delivery driver at Eaze’s depot in Silverlake, said the mileage rate reduction “has been a nightmare.”
“Reimbursement is not a perk they give us. ... We need that money,” Riehle said. “Today, my savings are gone — I’m reaching for my credit card to get through the end of the pay period.”
Azzalino, the Eaze CEO, said the company’s offer was reasonable, considering troubling economic head winds the weed industry faces and considering it’s higher than the state standard of a 35-cent reimbursement rate set for ride-hailing and delivery drivers classified as independent contractors under gig worker law Proposition 22.
“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,” Azzalino said in an email. “Eaze has not earned a profit in its history, so this is not the case of old industry hoarding profits.”
There is limited turnover among drivers, who on average have worked at the company for 2.4 years, “which is evidence of a reasonable compensation package,” Azzalino said.
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Eric Goepel, founder and CEO of the Veterans Cannabis Coalition, said at the Wednesday news conference that cannabis delivery workers serve as a lifeline for patients who rely on cannabis to treat pain and lamented broader economic instability for players in the cannabis industry.
California’s “bizarre” taxes and regulatory scheme make it nearly impossible to turn a profit, he said, but squeezing workers is a “terrible miscalculation” by Eaze.
“The way forward here is not by going after the workforce and trying to nickel and dime them out of $500, $600 a month that they most desperately need, and which adds a smidgen of a fraction to their actual bottom line, when a company has raised hundreds of millions of dollars,” Goepel said.
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