A federal judge in New Jersey has declared that the National Labor Relations Act preempts a key labour peace agreement requirement under the state’s cannabis licensing law.
Judge Michael A. Shipp of the U.S. District Court for the District of New Jersey issued the ruling on August 10, 2026, in Curaleaf Holdings Inc. v. NJ Cannabis Regulatory Commission, No. 3:25-cv-16397.
The decision converts Judge Shipp’s May 2026 preliminary injunction opinion into a final, appealable order, setting the stage for a potentially landmark Third Circuit ruling.
New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, known as CREAMMA, conditions cannabis licensure on signing a labour peace agreement with a labour union.
Under that requirement, businesses must negotiate a collective bargaining agreement within 200 days of opening, and violation can result in suspension, revocation, or nonrenewal of a licence.
Curaleaf (CURA) signed a labour peace agreement in 2022 but allowed it to expire in April 2025, which resulted in a $610,000 fine before the company filed suit in October 2025.
In his May 27, 2026 opinion, Judge Shipp rejected the state’s arguments for dismissal based on unclean hands, Younger abstention, and Burford abstention, addressing the merits directly.
The court found that the NLRA “arguably extends and applies to cannabis businesses,” distinguishing the cannabis product market from the labour market even though cannabis remains federally illegal.
On the question of Garmon preemption, the court determined that the labour peace requirement “impermissibly conditions a state license on an employer refraining from conduct protected by federal labor law.”
Under the Machinists preemption doctrine, the court found the requirement “clearly requires Curaleaf to give up the right to utilize economic weapons,” including lockouts and contracting out work.
Following the May opinion, the parties filed a joint stipulation agreeing no further factual development was necessary, and Judge Shipp adopted the parties’ proposed order on August 10, 2026.
New Jersey is not alone in facing this legal challenge, as courts in Oregon and New York have also encountered NLRA preemption arguments against similar cannabis labour peace requirements.
In Casala, LLC v. Kotek, 789 F. Supp. 3d 1025 (D. Or. 2025), an Oregon court reached the same conclusion, finding that a cannabis labour peace requirement was preempted by the NLRA.
In Hybrid NYC, LLC v. New York State Cannabis Control Bd., No. 25 CIV. 3067, 2025 WL 3719619 (S.D.N.Y. Dec. 23, 2025), a court allowed a similar preemption challenge to proceed past the motion to dismiss stage.
A California district court dismissed a preemption challenge in Ctrl Alt Destroy v. Elliott on unclean hands grounds, though that case is currently on appeal with both sides agreeing the lower court misapplied that doctrine.
The court’s reasoning also carries implications beyond cannabis, holding that a state’s authority to regulate an industry does not automatically extend to regulating labour relations within it.
Employers operating in heavily regulated industries should monitor the Third Circuit’s eventual ruling, as it may significantly shape how far states can go in dictating the terms of union organising relationships.