BM 119 Industry Lawsuit:

What It Means for Oregon’s Industry

Legal Challenge to BM 119 Underway

The legal challenges to Ballot Measure 119 (BM 119) has officially begun. On February 12, 2025, Casala, LLC (Bubble’s Hash) and Rec Rehab Consulting LLC (Ascend Dispensary) filed a lawsuit in federal court against the State of Oregon, arguing that BM 119 is unconstitutional under the First and Fourteenth Amendments, the Supremacy Clause, and the National Labor Relations Act (NLRA).

If the lawsuit succeeds, the court could strike down BM 119 entirely or block its enforcement, effectively eliminating the requirement for cannabis businesses to sign Labor Peace Agreements (LPAs) as a condition of licensing.

Download the full lawsuit here: BM 119 Federal Complaint

What’s the Lawsuit About?

The plaintiffs, two licensed businesses in Oregon, argue that BM 119 unlawfully forces businesses to sign Labor Peace Agreements (LPAs) with unions, even if they have no employees or if their employees do not wish to unionize. The lawsuit claims that:

BM 119 violates free speech protections by forcing businesses into neutrality agreements, which restrict their ability to communicate with employees about unionization.
It is preempted by federal labor law, which already regulates union-employer relations under the NLRA.
It is unconstitutionally vague, failing to provide clear guidelines on compliance.

According to Fisher Phillips’ press release, the lawsuit further asserts that BM 119 forces businesses not only to remain neutral but also to affirmatively support unionization efforts—which conflicts with the NLRA, granting employees the right not to engage in union activities.

The lawsuit also claims that the measure disrupts the free speech rights of employers, as the NLRA allows them to communicate freely about the pros and cons of unionization, provided they do not use coercion or threats.

Additionally, they argue BM 119’s licensing penalties pose a severe risk to businesses. If enforced, the measure could result in license denials or revocations, harming both businesses and employees who rely on these jobs for their income and benefits, including healthcare.

The legal challenge to BM 119 raises complex questions about state authority over labor regulations. While courts have upheld certain labor peace agreement requirements, many legal experts argue that BM 119 likely oversteps federal labor protections, particularly those outlined in the NLRA. The lawsuit will test the extent to which Oregon can impose LPA requirements on cannabis businesses without conflicting with federal labor laws, and there is a strong belief among many legal experts that the courts may rule in favor of the plaintiffs.

Emergency Injunction Expected Soon

As part of the lawsuit, the plaintiffs have also filed a request for an emergency injunction, which, if granted, would immediately block enforcement of BM 119 while the case is being litigated. This means businesses may not need to comply with the LPA requirement while the legal challenge is ongoing. A decision on this request could come in the next few weeks.

If the court denies the emergency injunction, BM 119 will continue to be enforced throughout litigation, requiring businesses to comply with its provisions until a final ruling is issued.

Now that the legal process is officially underway, we anticipate further significant legal developments in the coming days and weeks. Businesses should stay informed as this case progresses and be prepared for potential changes to how BM 119 is enforced.

What This Means for You Right Now

👉 Check out our “Essential BM 119 Compliance FAQS” section below to understand all the details about filing your renewal and staying compliant while this lawsuit unfolds.

At the time of this writing, BM 119 remains in effect.
Submit your renewal on time – You do not need to submit an LPA to submit your renewal. The CAMP licensing system requires a file to be uploaded in the LPA field, but it does not have to be an actual LPA. More details on how to do this are below.
The OLCC recommends submitting your renewal if you do not have an LPA. Instead of an LPA, you should submit a letter explaining why you do not have one.
Many licensees are choosing to wait before signing an LPA. This “wait-and-see” approach allows businesses to avoid signing potentially burdensome agreements prematurely.
BM 119’s LPA requirement applies to: Retailers, processors, medical-only retailers and processors, research certificate holders, and labs.
BM 119 does NOT apply to: Producers and wholesalers—they are exempt from the LPA requirement.

🔹 Important: Submitting your renewal without an LPA does not mean your renewal is complete, but it does protect your ability to continue operating while the OLCC processes your application.

DISCLAIMER: I am not a lawyer, and this is not legal advice. While I am confident in the accuracy of this information, you should always consult legal counsel before making significant business decisions. This information is subject to change with new developments or OLCC actions.

It’s Not Just BM 119—You Must Comply with the NLRA

⚠️ Reminder: The lawsuit against BM 119 does not change businesses’ obligations under the National Labor Relations Act (NLRA). Federal labor laws remain fully enforceable, regardless of this legal challenge. Even if BM 119 is paused or overturned, businesses must still comply with the NLRA, ensuring adherence to employee rights, collective bargaining rules, and all applicable labor regulations.

The National Labor Relations Act (NLRA) applies to all cannabis businesses with employees, regardless of whether they have a Labor Peace Agreement (LPA). Employers must understand their obligations to avoid legal risks and penalties. Key compliance points include:

Employees’ Rights: Employees have the right to organize, discuss working conditions, and form unions without employer interference.
Employer Obligations: Employers must comply with federal labor laws, even if they do not have an LPA.
Prohibited Conduct: Retaliation, threats, or discouraging union activity can result in legal action by the National Labor Relations Board (NLRB).
Employers must remain vigilant in complying with the NLRA, as failure to do so can result in legal consequences from the National Labor Relations Board (NLRB).

🔹 CIAO’s Member’s Guide to BM 119 and the NLRA: CIAO offers free policy advice to members and has created a 13-page guide to assist businesses with understanding BM 119 and NLRA compliance.

📩 Members should contact Jesse Bontecou for access. Non-members can join CIAO for this essential resource—Membership starts at just $35 a month.

What’s Next?

We will be closely monitoring this lawsuit and will provide updates on:

Key legal developments that could affect compliance requirements.
How businesses should navigate licensing renewals while the lawsuit is active.
Any potential changes to BM 119 enforcement.

If successful this lawsuit would have major implications for the industry. Stay informed and check our blog regularly for the latest updates.

🔹 Download the full lawsuit: BM 119 Federal Complaint

🔹 Download Fisher Phillips’ press release: BM 119 Federal Lawsuit Press Release

Ballot Measure 119 Lawsuit