Federal Court Declares New Jersey’s Cannabis Labor Peace Agreement Mandate Preempted by Federal Law: What Every Licensed Operator Needs to Know

On August 10, 2026, the United States District Court for the District of New Jersey entered final judgment in Curaleaf Holdings, Inc. v. New Jersey Cannabis Regulatory Commission, No. 25-cv-16397 (D.N.J.), declaring that the labor peace agreement (“LPA”) requirement in the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (“CREAMMA”) and its implementing regulations is preempted by the National Labor Relations Act (“NLRA”) as applied against plaintiff Curaleaf.

The decision is the latest in a growing line of federal court rulings finding that state-mandated LPA requirements for cannabis licensees impermissibly intrude upon the exclusive domain of federal labor law.

For New Jersey’s licensed cannabis operators, this ruling raises immediate and practical questions. Below, we unpack what this decision means, its limitations, and what every license holder party to an LPA should be considering today.

Background: The CREAMMA LPA Requirement

Under CREAMMA, cannabis businesses in New Jersey were required to sign LPAs with a labor union as a material condition of maintaining their state license – and further required to negotiate toward a collective bargaining agreement (“CBA”) with the union within 200 days of opening (or make a good faith effort towards the same). Failure to comply carried severe consequences. Indeed, as it relates to Curaleaf, the New Jersey Cannabis Regulatory Commission (“CRC”) issued Curaleaf $610,000 in civil penalties for operating 122 days without an active LPA and threatened to revoke its licenses, which was stayed during the pendency of this federal court action.

Curaleaf filed suit in October 2025 asserting a single count: that the NLRA preempts the LPA requirement. Following briefing and oral argument, the Court issued a comprehensive opinion on May 27, 2026, finding the LPA requirement “is preempted [by the NLRA] under Machinists, as well as Garmon.” The Court then entered final judgment on August 10, 2026, granting declaratory relief and establishing a final, appealable judgment under 28 U.S.C. § 1291.

Does This Ruling Apply Only to Curaleaf?

The short answer is technically, yes – for now. The declaratory judgment entered by the Court is specifically framed “as applied against Plaintiffs, ” which were Curaleaf and related parties. This means the order directly binds only the parties to the litigation – Curaleaf and the CRC. Other licensed operators in New Jersey are not automatically released from their LPA obligations by virtue of this ruling alone. Notably, the CRC did not say that it would suspend application of the law as against other operators.

However, the Court’s reasoning has far broader implications. The opinion addressed a purely legal question – whether the NLRA preempts the LPA requirement – and found no genuine dispute of material fact. The Court’s legal analysis applies equally to any New Jersey cannabis licensee that is covered by the NLRA.

In practical terms, the Court has provided a clear “roadmap” for other operators. But individual operators may need to assert their own rights – whether through litigation, administrative proceedings, or correspondence with the CRC – in order to obtain similar relief.

The Appeal: New Jersey Takes the Fight to the Third Circuit

Though Curaleaf received a final decision from the United States District Court, District of New Jersey, an appeal almost immediately followed. On August 13, 2026, New Jersey cannabis regulators filed a notice of appeal to the U.S. Court of Appeals for the Third Circuit. The defendants have expressly reserved their right to “continue to maintain that Plaintiffs’ Complaint should have been dismissed and that the LPA requirement is not preempted by the NLRA.”

This appeal is significant for several reasons. The Third Circuit has not yet weighed in on the question of NLRA preemption of cannabis LPA mandates. Its decision would be binding on all federal district courts in New Jersey, Pennsylvania, and Delaware, and persuasive authority nationwide.

While the Curaleaf decision now applies only to Curaleaf itself, if the Third Circuit affirms the decision, the CRC likely would have no choice but to withdraw the LPA requirement altogether. Alternatively, if the Third Circuit reverses the decision, the LPA requirement would stand as is. Note that the losing side could seek review by the U.S. Supreme Court, though the Supreme Court takes up only a small fraction of the cases brought to it.

Does This Ruling Render Existing LPAs Void or Voidable?

This is one of the most important – and unsettled – questions for operators currently party to an LPA. The Curaleaf decision declares that the state mandate requiring operators to sign LPAs is preempted. It does not, however, directly address the enforceability of any particular LPA as a private contract between an operator and a union.

There is a meaningful distinction between a contract that is void (i.e., unenforceable from inception) and one that is voidable (i.e., subject to being set aside by a party who can demonstrate a legal deficiency, such as coercion or lack of genuine consent). An operator considering its options should think through several factors:

• Consent under duress: Curaleaf argued in its complaint that it “did not want any of these terms” and “would not have accepted any of them” absent the legal requirement – indeed, that it “would have signed no LPA at all.” To the extent an operator’s LPA was signed solely due to the state mandate, the argument for voidability based on economic duress or the absence of genuine, free-market consent is strong.
• Contractual severability and survival clauses: Operators should review the specific terms of their LPAs. Many such agreements contain provisions addressing what happens if the underlying legal requirement is invalidated. Others may contain independent contractual obligations that survive independent of the state mandate.
• Interaction with a CBA: For operators that have progressed beyond the LPA stage and entered into a full CBA, the analysis becomes more complex. A CBA is a standalone contract governing the terms and conditions of employment, and it carries obligations under both state and federal labor law. Even if the LPA that catalyzed negotiations is deemed unenforceable, the CBA itself may remain in effect through its stated term.

The bottom line: operators should not unilaterally repudiate their LPAs or CBAs without careful legal analysis. The pathway to relief will likely be fact-specific and, in some cases, may require judicial intervention.

Would an Operator Need to Bring Its Own Suit?

For operators that wish to obtain declaratory relief similar to what Curaleaf obtained, the most direct pathway would be to file their own action seeking a declaration that the LPA requirement is preempted as applied to them. The Curaleaf ruling provides a strong foundation for any subsequent plaintiff that meets the NLRA’s jurisdictional thresholds. However, there are other avenues worth considering:

• Correspondence with the CRC: An operator might notify the CRC that it intends to rely on the Curaleaf ruling and that it will not enter into, renew, or maintain an LPA going forward. Whether the CRC would accept this or continue to enforce the requirement during the pendency of its appeal is an open question. As set forth previously, the CRC had fined Curaleaf several hundred thousand dollars for per-day violations for the period that Curaleaf did not have an LPA.
• Administrative proceedings: Operators facing enforcement actions from the CRC for LPA non-compliance may raise preemption as a defense in any administrative proceeding.
• Class or collective action: While no such action has been filed, operators could theoretically pursue broader declaratory relief on behalf of a class of similarly situated licensees.

The National Landscape: Other Courts Weighing In

The Curaleaf decision is not occurring in a vacuum. It is part of a growing wave of litigation across the country challenging state-mandated LPAs in the cannabis industry:

• Oregon – Casala, LLC v. Kotek (D. Or., May 2025): A federal district court granted a permanent injunction striking down Oregon’s Measure 119, which required all state-licensed cannabis businesses to enter into LPAs as a condition of obtaining or renewing their licenses. The court found the law preempted under both Garmon and Machinists, and also held that the neutrality mandate violated the First Amendment. Notably, this case is currently on appeal to the Ninth Circuit, making it one of the most important pending cannabis labor law decisions in the country. Unlike in New Jersey, for the pendency of the appeal, the Oregon Liquor and Cannabis Commission announced it would no longer enforce the LPA requirement.
• California (March 2025): A federal court dismissed a challenge to California’s LPA law on “unclean hands” grounds, reasoning that because the plaintiff was engaged in conduct that violates federal law (i.e., operating a cannabis business), it could not seek equitable relief in federal court. The California court notably did not reach the merits of the preemption argument – highlighting the inconsistent approaches courts have taken to the federal-illegality question. This decision is on appeal to the Ninth Circuit, which will likely consider this in conjunction with the challenge to the Oregon law.
• New York (April 2025): A cannabis retailer filed suit challenging the LPA requirement in New York’s Marihuana Regulation and Taxation Act (“MRTA”), arguing that it is preempted by the NLRA. That case remains pending.
• Other states with LPA requirements: These laws are vulnerable to the same challenges as the other states.
• The NLRB: In 2020, during the first Trump Administration, the NLRB General Counsel was urged to take up the issue, but he declined to do so.  It is yet to be seen whether the new NLRB General Counsel will take a position on this issue.

What Should All License Holders Be Thinking About Today?

Every licensed cannabis operator in New Jersey that is party to an LPA should, at a minimum, be considering the following:

1. Review your LPA. Understand its terms, its duration, its termination provisions, and whether it contains language tying its existence to the state mandate. Determine whether the agreement is currently active or expired.
2. Assess your CBA status. If you have progressed to a CBA, evaluate its terms independently of the LPA. A CBA will likely survive this ruling through its stated term.
3. Evaluate your risk tolerance. While the district court’s ruling is clear, the pending Third Circuit appeal introduces uncertainty. Operators who unilaterally cease compliance before the appellate ruling may face enforcement action from the CRC.
4. Consider whether to file your own action. For operators that wish to obtain binding declaratory relief for their own operations, the Curaleaf roadmap makes such a filing straightforward – and likely successful at the district court level.
5. Monitor the Third Circuit closely. The timeline and outcome of the appeal will determine whether this ruling becomes permanent law in this jurisdiction.
6. Engage experienced labor and cannabis counsel. The intersection of federal labor law, state cannabis regulation, and private contract law requires specialized guidance tailored to each operator’s specific factual circumstances.