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For about nine months in 2024, Samantha Cooley worked as a budtender at the Story Cannabis dispensary on McDowell Road near Interstate 17. In that time, she claims, the dispensary wrongfully withheld tips that customers left when making purchases.
Cooley is making those claims in a federal lawsuit filed on Oct. 29, along with two other former budtenders who worked at Story Cannabis dispensaries in Ohio and Maryland. The trio alleges that Story Cannabis violated the Fair Labor Standards Act by giving a portion of their tips to dispensary supervisors. The three plaintiffs filed the lawsuit on behalf of themselves and “all others similarly situated,” meaning they hope the case becomes a class-action suit.
Story Cannabis has 11 Arizona locations, according to its website. One of its stores in the Valley — located in north Chandler — is unionized, according to United Food & Commercial Workers Local 99 spokesperson Drake Ridge. The lawsuit claims that at least 200 of the company’s employees are potential plaintiffs.
Story Cannabis did not respond to Phoenix New Times’ request for comment on the lawsuit and its tip pooling practices. A manager at the McDowell store, who identified himself as Gilbert but refused to provide his last name, declined to answer questions about whether supervisors take home tips.
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Lawyers for Cooley and the other plaintiffs also did not respond to a request for comment.
The lawsuit claims company policy requires that tips be pooled among a group of employees that includes budtenders, their direct supervisors, inventory managers and sometimes high-level employees like store managers and general managers. “Tips are divided in proportion to the total number of hours each employee worked that day,” the lawsuit says. But because the supervisor-level employees work more hours, they “receive a larger portion of the tips than do Budtenders, even though the Budtenders perform the customer-facing work.”
The lawsuit also claims that the dispensaries “regularly use tips from the tip pool to cover shortages in the cash registers,” cutting down on the tips budtenders ultimately receive. The lawsuit says budtenders “customarily and regularly earn more than $30 per month in tips.”
The three former workers argue that supervisors should not have been paid from the tip pool and say they are entitled to back-pay compensation and benefits for losing out on that tip money, as well as “an additional amount equal to the unpaid tips as liquidated damages.” The former workers and their lawyers are calling for other budtenders, current and former, to join them in a class action lawsuit.
Ridge — whose union has helped organize budtenders in several Valley dispensaries, including the one unionized Story Cannabis location — told New Times that it was standard practice for budtenders to take home any tips they received before the legalization of recreational marijuana in 2020. After that, large conglomerates took over the industry and tip pooling became more common.
“Some companies only tip out budtenders, while others include traditionally non-tipped employees like back-of-house inventory employees,” Ridge said. “Often, there is little transparency on how much money is in the tip pool and what percent of that pool employees are receiving when tipped out.”
He added that he heard of one other instance of management taking a cut of tips, but he was not sure how prevalent that practice is across the industry.
