PORTLAND, Ore. (KOIN) – The Oregon Liquor and Cannabis Commission is no longer requiring cannabis businesses to enter labor peace agreements in order to obtain or renew a cannabis license, the agency announced Thursday.

The decision comes after a federal judge ruled Oregon Ballot Measure 119 unconstitutional earlier in May.

“Earlier this month, a federal judge issued a ruling barring the enforcement of Ballot Measure 119. Given this ruling and in consultation with the Oregon Department of Justice, the OLCC will no longer require labor peace agreements as part of cannabis license applications and license renewals,’ the OLCC said in a press release Thursday.

Measure 119, also known as the United for Cannabis Workers Act, was passed by Oregon voters in November 2024 and took effect in December of that year. The measure required cannabis retailers and processors to remain neutral in their communications to employees from labor organizations about bargaining rights.

After Measure 119 passed, the OLCC adopted the labor peace agreement requirement in order to comply with the ballot measure, which required cannabis processors, retailers, and labs to provide labor peace agreements with a bona fide labor organization in order to obtain or renew cannabis licenses.

The measure was challenged in a lawsuit filed in February by two Portland cannabis businesses, arguing the measure violates the First Amendment and will harm cannabis companies.

United States District Judge Michael H. Simon in Portland agreed with the cannabis companies, ruling Measure 119 is “preempted by the (National Labor Relations Act)” and violates the First Amendment.

“Measure 119 is not limited to restricting only threatening, coercive, false, or misleading speech, but instead prohibits all speech by employers that is not ‘neutral’ toward unionization. Therefore, Measure 119 violates Plaintiffs’ First Amendment rights to free speech,” Judge Simon wrote, in part.

In response to Judge Simon’s ruling, the plaintiff’s attorneys with Fisher Phillips LLP told KOIN 6, “We are pleased with Judge Simon’s ruling. Judge Simon reached the right conclusion on this important case of first impression regarding National Labor Relations Act preemption and Constitutional First Amendment speech protections as related to laws requiring businesses to enter into labor peace agreements.”

The plaintiffs’ attorneys continued, “This case is poised to have far-reaching impacts, as many states are considering imposing similar requirements not only on cannabis licensees, but also in other sectors, and this decision helps maintain the proper balance between labor and management and allows cannabis employees to decide for themselves whether to organize without undue influence.”

Governor Kotek’s office added that the governor — who was named among defendants in the lawsuit — “respects the court’s ruling.”

Meanwhile, a spokesperson for UFCW 555, a labor organization that has been a strong proponent of Measure 119, told KOIN 6 News “We now have conflicting federal rulings, with a judge in Oregon putting Measure 119 on hold while a California judge has upheld a similar law. One of these rulings is destined to be overturned on appeal. Our strong suspicion is that Judge Simon’s opinion, which flaunts Supreme Court precedent, will be the one reversed.”