A federal judge has ruled that New Jersey’s requirement that most licensed marijuana businesses maintain labor peace agreements with unions is preempted by federal labor law, handing Curaleaf a significant victory in its challenge against the state.
U.S. District Judge Michael A. Shipp issued the order Monday, finding that the requirement conflicts with the National Labor Relations Act (NLRA). The decision clears the way for New Jersey to appeal the issue to the U.S. Court of Appeals for the Third Circuit.
The ruling follows a May decision in which Shipp denied Curaleaf’s request for a preliminary injunction that would have immediately blocked enforcement of the requirement. Although the judge found Curaleaf had not demonstrated the irreparable harm necessary for emergency relief, he said at the time that the company was likely to succeed on its argument that the mandate is preempted by federal law. Shipp also rejected the New Jersey Cannabis Regulatory Commission’s request to dismiss the lawsuit.
Under New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, licensed cannabis establishments, distributors and delivery services generally must maintain a labor peace agreement with a bona fide labor organization as an ongoing condition of their license. Microbusinesses are exempt.
Curaleaf filed its lawsuit in October 2025 after the commission took enforcement action against the company for allowing its agreement with United Food and Commercial Workers Local 360 to expire.
The agreement was signed in April 2022 and expired in April 2025. Regulators subsequently imposed a $610,000 civil penalty against Curaleaf for failing to maintain an active agreement.
Curaleaf argued that New Jersey’s mandate improperly regulates areas Congress left to federal labor law, including union organizing, collective bargaining and the ability of employers and unions to use economic pressure during labor disputes.
The case could have implications beyond Curaleaf. Verano Holdings filed a separate federal lawsuit against the commission on July 31 challenging the same requirement, relying heavily on Shipp’s earlier findings in the Curaleaf case.
New Jersey is also not alone in facing challenges to cannabis labor peace mandates. A federal judge struck down Oregon’s requirement in 2025 after finding it was preempted by the NLRA and violated the First Amendment. That case was appealed.
