New Jersey Cannabis Law Just Got Teeth: Employees Can Now Sue

Employment laws governing workplace drug policies continue to evolve following the legalization of cannabis in New Jersey. On May 26, 2026, the New Jersey Superior Court, Appellate Division issued a precedential decision in Sanders v. Levari Group, LLC, holding that the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”) permits job applicants and employees to bring private lawsuits against employers for alleged cannabis-related employment discrimination.

Overview of CREAMMA’S Employment Protections

CREAMMA provides anti-discrimination protections for employees who use cannabis recreationally and imposes strenuous requirements on New Jersey employers who conduct drug testing for the presence of cannabis in an individual’s system. While employers may prohibit the use or possession of cannabis during work hours, the statute expressly bars employers from taking adverse employment action solely based on an employee’s off-duty cannabis use or a positive drug test for cannabis, absent evidence of on-the-job impairment.

Until recently, however, courts had questioned whether CREAMMA created a private right of action, leaving uncertainty as to how these protections could be enforced. Specifically, it was unclear whether employees who believed they had been subjected to adverse employment action in violation of the statute could sue their employers directly in court to seek remedies such as reinstatement, back pay, compensatory damages, and other relief. For example, in 2023, a federal judge for the United States District Court for the District of New Jersey ruled that CREAMMA does not allow employees to sue their employers for alleged CREAMMA violations. This decision was subsequently upheld by the Third Circuit.

Case Background and the Decision

Plaintiff Darlene Sanders applied for a customer service position with defendant Levari Group, LLC. After interviewing, she received and accepted a job offer conditioned on passing a pre-employment drug test. Sanders tested positive for cannabis metabolites, which she attributed to lawful, off-duty recreational use and maintained that she was not impaired during the hiring process. The employer offered Sanders the opportunity to take a second drug test at her own expense. When she declined, the employer rescinded the job offer.

Sanders filed suit asserting violations of CREAMMA, along with related common law claims for negligence, invasion of privacy, breach of contract, and wrongful discharge in violation of public policy.

The employer moved to dismiss the CREAMMA claim, arguing that CREAMMA does not expressly authorize individuals to bring lawsuits. The trial court agreed with the employer and dismissed the CREAMMA claim, finding no private right of action in accordance with the precedent described above.

The Appellate Division reversed the trial court’s decision and held that a private right of action exists under the statute. The court reasoned that prohibiting private lawsuits would undermine the statute’s purpose of protecting job applicants and employees from discrimination tied to lawful cannabis use.

Key Takeaways for Employers

The ruling reshapes the legal landscape governing cannabis-related employment practices in New Jersey, strengthening protections for cannabis users and increasing the potential liability employers face when making hiring or employment decisions based on cannabis use or testing results.

In light of this decision, employers should consider taking the following actions:

• Review of Drug Testing Policies: Employers should ensure that policies do not rely solely on positive cannabis test results without additional evidence of workplace impairment.
• Documentation of Impairment: Employers should train supervisors to identify and document observable signs of impairment before taking disciplinary action.
• Policy Updates: Employee handbooks and workplace policies should be reviewed and updated to reflect current legal obligations under CREAMMA.
• Increased Litigation Risk: Employers should anticipate the possibility of standalone claims under CREAMMA, in addition to other statutory or common law claims.