On the surface, California’s cannabis industry appears to be maturing into a stable and regulated market. Yet recent revelations surrounding Glass House Brands, the state’s largest legal cannabis cultivator, suggest that some of the industry’s biggest players may still be navigating loopholes and exploiting weak oversight. Records obtained by MJBizDaily indicate that Glass House renewed dozens of cultivation permits despite allowing a legally required labor agreement to expire, a development that raises critical questions about state regulators’ ability to enforce compliance in an industry already under intense scrutiny.

The Backbone of California’s Legal Market: Glass House Brands

Glass House Brands has long been positioned as a cornerstone of California’s multibillion-dollar legal cannabis market. With sprawling greenhouses in Santa Barbara and Ventura counties, the publicly traded company represents the scale and ambition regulators envisioned when they legalized commercial cultivation. But Glass House is now at the center of a controversy that underscores the tension between rapid industry growth and the protections lawmakers attempted to build into the licensing system.

Under California law, cannabis companies with more than 10 employees must maintain a valid labor peace agreement (LPA) with a union to renew their annual permits. The requirement was designed to ensure cannabis workers could organize without obstruction, while giving companies the assurance of protection from strikes or boycotts. In theory, LPAs balance labor rights with business stability. In practice, the Glass House episode highlights how fragile that system may be.

Expired Pact, Renewed Permits

Documents obtained through public records requests show that Glass House signed an LPA in October 2023 with the Seafarers Entertainment and Allied Trades Union (SEATU), an organization better known for representing maritime workers than cannabis employees. Critics of the cannabis labor peace system have long argued that companies seek out unions unlikely to organize their workers, essentially reducing LPAs to paper formalities.

The agreement, like most LPAs, was valid for one year. By October 2024, it had expired. Yet between December 2024 and March 2025, Glass House successfully renewed 25 cultivation permits across its facilities. When submitting its paperwork, the company attested that its agreement with SEATU was still valid. The state Department of Cannabis Control (DCC) accepted those renewals without demanding evidence of an updated agreement.

SEATU itself later told the cannabis newsletter WeedWeek that its involvement with the industry had ended in 2024. “We have nothing to do with those companies,” a spokesperson reportedly said.

Automated Oversight or Lack of Oversight?

The Glass House case exposes a key weakness in California’s cannabis licensing framework: oversight is largely self-reported. Renewal applications can be completed online, where licensees check a box affirming their compliance with labor rules. According to Los Angeles attorney Alexis Lazzeri, who reviewed the situation at MJBizDaily’s request, the process is “nearly automatic.”

Once the box is checked, it becomes the regulator’s responsibility to review documents and follow up. In this instance, that follow-up never came. Observers argue that the DCC’s reliance on attestations creates opportunities for companies to evade labor requirements with little risk of detection, especially if unions themselves confirm they are no longer engaged.

Broader Industry Trends and Legal Battles

Glass House’s maneuver is not an isolated case. Across the cannabis sector, companies have been accused of signing LPAs with “sham unions”—organizations that exist largely to satisfy licensing requirements but have no real plans to organize workers. In New York and Oregon, similar laws have faced legal challenges, with opponents arguing that mandatory LPAs violate constitutional protections for free association.

In Oregon, a federal judge sided with challengers, though that decision is currently on appeal. Meanwhile, regulators in the state have signaled they may abandon the requirement entirely. If that happens, California’s system could become a test case for whether labor protections in cannabis can withstand industry pushback and regulatory inertia.

Enforcement Questions in a Shifting Political Climate

The timing of this controversy is especially significant. In July, Glass House was thrust into national headlines when federal immigration authorities raided its facilities, arresting more than 300 workers alleged to be undocumented and raising concerns about child labor. Against this backdrop, questions about expired labor agreements and lax oversight only add to the perception that Glass House may have skirted rules designed to protect workers.

The company has since signed a new LPA with the Teamsters, one of the largest and most aggressive unions in the cannabis sector. Whether that move signals genuine compliance or an effort to shore up its public image remains to be seen.

At the federal level, lawsuits challenging LPA requirements continue, and the broader labor environment is expected to shift under the new Trump administration. Observers predict a rollback of labor protections and a more business-friendly climate, potentially making state-level enforcement of rules like California’s LPA mandate even more crucial.

A System at a Crossroads

The Glass House case reveals a troubling gap between the letter of California’s cannabis law and how that law is enforced. Regulators designed labor peace agreements as a cornerstone of the licensing process, but without rigorous oversight, the requirement risks becoming symbolic rather than substantive.

For workers, that means the protections lawmakers promised may not materialize. For competitors, it raises fairness concerns: companies that cut corners could gain an advantage over those that follow the rules. And for regulators, it presents an uncomfortable question—are they equipped to manage compliance in one of the most complex, fast-moving industries in the country?

As the cannabis market matures, the credibility of its regulatory framework depends not just on writing strong laws, but on ensuring those laws are enforced consistently. Whether California will rise to that challenge remains uncertain.