The Cannabis Boom and Bust Cycle Has a Hidden Victim: Workers

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It was, in a way, a monument to optimism: a 1.3 million square foot cannabis greenhouse built on the fertile farmland just north of Leamington.

The $80 million bank loan to fund PharmHouse’s business was, in 2019, one of the largest ever offered to the cannabis industry. But mirroring the turnover of high street pot shops, the growing operation had quickly crumbled – bowing under the weight of disappointing performance, internal wrangling and huge financial liabilities.

Now a group of farm workers are fighting to recover thousands of dollars in unpaid duties, according to documents recently provided to PharmHouse’s insolvency proceedings. Many are temporary foreign workers from St. Vincent and Guatemala – invisible victims of the sector’s volatility, critics say.

“Cannabis was the promise of a boom for communities,” said Chris Ramsaroop, organizer of Justice for Migrant Workers. “But that has only been a failure for the workers and the communities where these operations land.”

The Star reached out to stakeholders involved in the now-defunct PharmHouse venture, which includes cannabis investment firm RIV Capital, with detailed questions about the allegations filed by former workers, but did not respond. not received a response.

Toronto labor law firm Koskie Minsky is officially representing four former PharmHouse employees in a complex bankruptcy process to establish their claims and clear the way for up to 57 migrant workers to get their money back.

In total, it could net the group up to $500,000 in payouts, Ramsaroop said; his organization is also reaching out to Canadian workers who may also be owed money.

But the nature of the process means many employees may never see a full record of what they are owed – and may not even know they are entitled to anything, he said.

Former PharmHouse employee O’Niel Robinson has filed a claim for $7,500, the maximum amount allowed under the federal wage earner protection program that exists to protect employees in the event of bankruptcy. He says he arrived at PharmHouse’s sprawling greenhouse in Staples, Ont., in November 2019 with the goal of sending money to his mother and sister in St. Vincent.

However, after about a year and a half of working at the facility, he says he was suddenly transferred to another farm.

Unbeknownst to Robinson, PharmHouse was insolvent – ​​and its sudden closure constituted a mass layoff. This meant that workers were entitled to at least eight weeks of severance pay under provincial employment laws, in addition to a host of rights that several employees say they never received, including overtime, vacations and holidays.

None of this, says Robinson, has ever been explained.

“They sent us back with nothing,” he said.

PharmHouse is not alone; in the past three years, at least 15 cannabis growers and producers across the country have become insolvent, according to publicly available bankruptcy records.

As a result, workers are often left with nothing, Ramsaroop said. PharmHouse’s situation only came to light because of Justice for Migrant Workers’ relationship with farm workers. The organization then approached Koskie Minksy for pro bono assistance.

Part of the problem was that PharmHouse did not appear to provide insolvency trustees with documents suggesting money was owed to temporary foreign workers, attorney James Harnum said.

Even if these debts had been documented, the registered address for PharmHouse migrant workers was the now defunct farmhouse, making it impossible for the insolvency trustee to proactively reach out. By the time bankruptcy proceedings were underway, migrant workers previously employed at PharmHouse had already dispersed to other farms or returned to their home countries.

These hurdles are part of the reason temporary foreign workers face particular hurdles in navigating bankruptcy proceedings, even though they may be legitimate creditors, Ramsaroop said.

“The system does not benefit the workers.”

The PharmHouse case presented other problems as well. Although the trustee accepted Koskie Minsky’s position that a mass dismissal occurred during the sudden closure of the farm, other abuses alleged in the application do not fall within the scope of the proceedings. insolvency.

“There were a lot of things that were done to these people that can’t be fixed through the bankruptcy process,” Harnum said.

These include allegations that temporary foreign workers sometimes worked up to 88 hours a week without overtime pay. Pay stubs reviewed by the Star show an hourly rate of $14.25 for migrant workers on the farm – about $2 less an hour than Canadian colleagues doing the same job, according to interviews with three former employees .

Unlike their Canadian counterparts, the workers said they were also subject to illegal payroll deductions for items like uniforms.

“PharmHouse discriminated against our customers and their former colleagues who worked under the TFW program, on the basis of citizenship, race, place of origin, ethnic origin , color and ancestry, as prohibited by the Human Rights Code,” says the documentation submitted to PharmHouse Insolvency Trustee.

At least 15 cannabis growers and producers across Canada have become insolvent in the past three years, according to publicly available bankruptcy records.

Robinson says his days sometimes lasted from 7:30 a.m. to 9 p.m. and remembers his colleague getting a nosebleed in the heat of the greenhouse.

PharmHouse also made deductions from temporary foreign worker wages for housing expenses, which are “allowed only if the housing is suitable for human habitation,” the documentation from Robinson’s attorneys adds.

In interviews with the Star, three former employees described their dorms as overcrowded and sometimes unsanitary. One worker said he shared a room with 21 other people, while another said that at one point his accommodation flooded with the contents of his septic tank.

The situation has only been exacerbated by COVID-19, Robinson said; he and his roommates were not allowed to leave the farm for groceries or other chores for six months.

But the disease still struck PharmHouse; it has filed 11 COVID-19 claims on behalf of workers with the Workplace Safety and Insurance Board, records show.

“Canadians could go home, go to the grocery store,” said a former employee who asked to speak anonymously for fear of reprisal. “I (think) it was the Canadians who brought the virus to the farm.”

Several of his roommates have been infected with COVID, the worker said. Soon after, he himself lost his sense of smell and taste and began to feel ill.

But when he asked to be tested, he says his employer refused.

“They were saying they didn’t have the money, if we were going to get tested, to put us in a hotel room,” the worker said.

For Ramsaroop, the conditions on the farm reflect systemic problems in the sector.

“Our labor laws are mobilized to protect the interests of these industries,” he said.

Cannabis farm workers are currently excluded from the Labor Relations Act in Ontario, one of the few provinces where agricultural workers cannot unionize.

“Working conditions are appalling for most producers,” said United Food and Commercial Workers union national representative Kevin Shimmin, whose organization is seeking to challenge the exclusion.

“Volatile is the best word to describe the whole industry… The feeling is that if you work in cannabis production, even if you’ve been there for a year or two, you don’t know if you have a job tomorrow.”

Temporary foreign workers are particularly vulnerable, Ramsaroop added.

“Look how black and brown workers have been treated doing the same job (at PharmHouse) as white workers and being devalued.”

PharmHouse entered creditor protection in September 2020 and entered bankruptcy proceedings a year later. Former employees have only just begun receiving their federal wage earner protection payments, Ramsaroop said.

And because of the timing of the bankruptcy, federal payments are subject to a 6.82% administration fee, which cuts hundreds of dollars from the amount workers will ultimately pocket.

The federal government eliminated these fees at the end of November. Ramsaroop is now fighting to have it removed for PharmHouse workers, who have already faced “systemic wage theft”, he said.

“It had a big impact on me because I send my money home to my family,” Robinson said. “My experience was ruined.”

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