New Jersey Appellate Division Holds CREAMMA Provides Private Right of Action Against Employers, by Christopher J. Turano, Esq., 6-4-2026

Examining a matter of first impression in the State of New Jersey, a newly published New Jersey Appellate Division decision expands potential employer liability by holding that the anti-discrimination provisions of the Cannabis Regulatory, Enforcement Assistance, and Market Modernization Act (CREAMMA) create an implied private right of action. For employers, the decision is especially important because adverse employment or hiring decisions based on lawful cannabis use, including the presence of cannabinoid metabolites resulting from conduct permitted under CREAMMA, may now lead to direct civil claims, in addition to the practical burdens and expense of defending litigation.

On May 26, 2026, in Sanders v. The Levari Group, LLC, the Appellate Division reinstated the plaintiff’s CREAMMA claim, holding that the statute’s anti-discrimination provisions are privately enforceable. The court also reinstated related negligence, invasion of privacy, and breach of contract claims, while affirming dismissal of the plaintiff’s claim under Pierce v. Ortho Pharmaceutical Corp. because the case involved a failure-to-hire claim rather than a wrongful discharge claim.

Background
The plaintiff alleged that she was offered a customer service representative position, required to take a pre-employment drug test, and then had the offer rescinded after testing positive for cannabis metabolites. She claimed she was not impaired at the time of testing and sued under CREAMMA, Pierce, and related negligence, invasion of privacy, and breach of contract theories. The trial court dismissed the CREAMMA claim, but the Appellate Division held that CREAMMA’s anti-discrimination provisions are privately enforceable.

The Court’s Holding
The Appellate Division analyzed whether CREAMMA’s anti-discrimination provisions create an implied private right of action. Applying the Cort v. Ash framework, the court found that employees and prospective employees are among the class the statute was designed to protect, that the statutory language creates enforceable rights, and that recognizing a private remedy is consistent with CREAMMA’s remedial purpose.

The court further noted that CREAMMA does not provide an administrative enforcement mechanism for these anti-discrimination provisions. While the Cannabis Regulatory Commission may regulate the cannabis industry and impose sanctions on license holders, neither CREAMMA nor the CRC’s regulations provide a process for individuals to pursue discrimination claims against employers. As a result, the court concluded that, absent a private right of action, the anti-discrimination provisions would be “meaningless and unenforceable.”

The decision is also notable because the Appellate Division expressly declined to follow the Third Circuit’s decision in Zanetich v. Wal-Mart Stores East, Inc., which concluded that CREAMMA does not provide a private right of action.

Why It Matters to Employers
This decision significantly increases litigation risk for New Jersey employers by recognizing a private right of action under CREAMMA. Applicants and employees may now bring direct claims alleging adverse action based on lawful cannabis use or the presence of cannabinoid metabolites resulting from conduct permitted under the statute.

The ruling is particularly important for employers that conduct pre-employment drug testing. The court expressly recognized prospective employees as protected under CREAMMA and underscored the risks of making employment decisions based solely on a positive cannabis test result absent another lawful basis for the action.

The decision also reinstates related negligence, invasion of privacy, and breach of contract claims at the pleading stage, signaling that cannabis-related employment disputes may involve multiple causes of action beyond CREAMMA itself.

Potential Effect Outside New Jersey
As a published Appellate Division decision, Sanders is precedential in New Jersey state courts unless and until it is overturned or modified by a higher court. The decision does not itself establish precedent in other states, although it may carry persuasive value in jurisdictions with similar statutory language.

Employer Considerations
Employers with operations in New Jersey may want to consider the following:

• Review drug-testing, hiring, and disciplinary policies to ensure compliance with CREAMMA’s anti-discrimination protections.
• Distinguish between lawful off-duty cannabis use and workplace impairment. CREAMMA protects lawful off-duty use and the presence of cannabinoid metabolites resulting from conduct permitted under the statute, but employers may still prohibit on-duty use, impairment, and other policy violations.
• Avoid relying solely on a positive cannabis test result when making employment decisions. Employers should evaluate the surrounding circumstances and ensure there is a lawful basis for any adverse action, such as evidence of impairment, a workplace safety concern, or another legitimate, nondiscriminatory reason.

Consider applicable federal-law obligations. Federal contracting requirements, federal funding conditions, and other federal-law obligations may affect the analysis, as CREAMMA contains provisions intended to avoid conflicts with federal law and certain contractual requirements.

Author:
Christopher J. Turano
Partner