Key Takeaways

• Private lawsuits now allowed: New Jersey employees and job applicants can sue employers directly under CREAMMA for refusing to hire or taking adverse action based on a positive cannabis test — no need to go through the Cannabis Regulatory Commission.
• Drug testing still permitted, but action is limited: Employers can continue pre-employment drug testing, but a positive result for cannabinoid metabolites alone cannot be the sole basis for rescinding a job offer or declining to hire.
• Review hiring policies now: NJ employers should immediately audit their drug testing protocols, offer-letter language, and hiring procedures to ensure compliance with CREAMMA and reduce litigation exposure.

The New Jersey Appellate Division in Sanders v. The Levari Group, LLC has held for the first time that New Jersey's Cannabis Regulatory, Enforcement Assistance, and Market Modernization Act (CREAMMA) provides individuals with a private right of action to sue employers who refuse to hire or otherwise take adverse employment action against them based on their lawful use of cannabis. This is significant for New Jersey employers, as it opens the door to civil litigation by job applicants and employees who allege they were discriminated against for off-duty cannabis use.

As a result of this May 26, 2026 decision, employers should review their drug testing policies and procedures to ensure that a positive test for cannabinoid metabolites alone is not used as the basis for rescinding a job offer or declining to hire an applicant.

We’ll detail the full implications for employers below, but first some background on the case and the court’s reasoning.

Case Background

The plaintiff interviewed for a customer service representative position with First Choice Freezer and received a job offer. As part of its standard hiring process, the employer required a pre-employment drug test, which indicated that the plaintiff had used cannabis within the preceding 30 days. The plaintiff claimed she used cannabis recreationally, was not under the influence at the time of the test and did not use cannabis on the day of testing. The employer offered the plaintiff the opportunity to retake the test at her own expense; she declined because she could not afford it, and the employer rescinded the job offer.

The plaintiff filed suit alleging, among other claims, that the employer violated CREAMMA by refusing to hire her based on her recreational use of cannabis. The trial court dismissed the claims, concluding that the plaintiff's remedy lay with the state’s Cannabis Regulatory Commission (CRC), not the courts.

Key Legal Issues and the Court's Holding

The central question on appeal was whether CREAMMA implicitly provides a private right of action for individuals who allege an employer violated its anti-discrimination provisions — a matter of first impression in New Jersey.

Applying the three-factor test from the U.S. Supreme Court’s decision in Cort v. Ash, 422 U.S. 66 (1975), the Appellate Division concluded that all three factors favored recognizing a private right of action:

• Intended beneficiary. The court found that CREAMMA's anti-discrimination provisions, specifically N.J.S.A. 24:6I-51(b)(1) and -52(a)(1), are directed at protecting employees and prospective employees from adverse action based on lawful cannabis use. According to the court, the plaintiff, as a job applicant whose offer was rescinded after a positive test for cannabinoid metabolites, falls squarely within the class the statute was designed to protect.
• Legislative intent. The court noted that CREAMMA contains "rights-creating language" and that neither the statute nor its legislative history evidences an intent to preclude a private right of action. Critically, the Legislature did not vest the CR — or any other state entity — with authority to enforce CREAMMA's employment anti-discrimination provisions, and the CRC's jurisdiction is limited to licensed cannabis businesses, not employers generally.
• Consistency with legislative purpose. The court found that a private right of action advances CREAMMA's broad remedial goals, including preventing discrimination against lawful cannabis users in employment. Without such a remedy, the anti-discrimination provisions would be "meaningless and unenforceable."

The court also addressed N.J.S.A. 24:6I-55(a), a "limitations" provision stating that CREAMMA shall not be construed to "amend or affect in any way any State or federal law pertaining to employment matters." The court interpreted this provision, in the context of the statute as a whole, as addressing the Legislature's intent to minimize conflict with federal law — not to foreclose private claims.

Additionally, the court reversed the dismissal of the plaintiff's negligence, invasion of privacy, and breach of contract claims for further proceedings, while affirming dismissal of her common law wrongful discharge claim under Pierce v. Ortho Pharmaceutical Corp., because Pierce is limited to wrongful discharge situations — not failure-to-hire cases.

The court acknowledged that the U.S. Court of Appeals for the 3rd Circuit reached the opposite conclusion in Zanetich v. Wal-Mart Stores East, Inc., 123 F.4th 128 (3d Cir. 2024), in which it found no private right of action. Although both courts analyzed the same Cort factors, they reached different conclusions. The New Jersey Appellate Court Division expressly declined to follow Zanetich, noting that the 3rd Circuit examined only one CREAMMA provision — N.J.S.A. 24:61-52(a)(1) — without considering N.J.S.A. 24:61-51, and that New Jersey state courts are not bound by federal courts on matters of state law.

What This Means for NJ Employers

This decision has immediate practical significance for employers operating in New Jersey:

• Litigation exposure. Employers who refuse to hire an applicant — or take adverse employment action against an employee — because of a positive test for cannabinoid metabolites now face the risk of civil lawsuits, including claims for compensatory damages, lost wages, punitive damages, emotional distress and attorneys' fees. This risk exists even though CREAMMA does not expressly mention a private right of action.
• Pre-employment drug testing practices. Employers should review their drug testing policies and procedures to ensure that a positive test for cannabinoid metabolites alone is not used as the basis for rescinding a job offer or declining to hire an applicant. CREAMMA permits drug testing, but limits an employer's ability to act on results showing lawful cannabis use.
• Bundled claims. The court's decision to allow the plaintiff's negligence, invasion of privacy and breach of contract claims to proceed on remand means that employers could face multi-count complaints arising from a single hiring decision. Exposure is not limited to the statutory claim alone.
• Federal contractor carve-out. CREAMMA does contain an exception for employers who would be placed in violation of a federal contract or at risk of losing federal funding. Employers subject to federal requirements should document their basis for relying on this exception.
• Review and update policies now. In light of this decision, New Jersey employers should promptly consult experienced employment counsel to review hiring policies, drug testing protocols and offer-letter language to ensure compliance with CREAMMA's anti-discrimination provisions and to mitigate the risk of litigation.

This opinion represents a significant clarification of employer obligations under CREAMMA. Employers who have not yet updated their practices to account for New Jersey's cannabis laws should treat this decision as a call to action.

For additional information on this and related issues, contact co-authors Eileen Oakes Muskett at emuskett@foxrothschild.com or Kelly Quinn at kquinn@foxrothschild.com.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the authors and not necessarily this law firm or its clients.