On May 26, 2026, the New Jersey Appellate Division issued a decision in Sanders v. The Levari Group, LLC holding that the New Jersey Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) implicitly provides a private right of action for individuals subject to adverse employment action based on their cannabis use. This decision may come as a surprise given the absence of comprehensive regulatory guidance (see HERE) and conflicting federal decisions interpreting CREAMMA’s employment protections (see HERE). To learn more about how we got here, let’s weed through the statute and its budding history.
Rolling It Out: CREAMMA Background & Developments
Legislation
Signed into law on February 22, 2021, CREAMMA prohibits employers from taking adverse employment action against applicants or employees based solely on their lawful off-duty cannabis use or a positive drug test for cannabis. While the statute authorizes the Cannabis Regulatory Commission (CRC) to take enforcement action against licensed cannabis businesses, neither the statute nor the implementing regulations expressly provided a mechanism for applicants or employees to enforce CREAMMA’s anti-discrimination protections against employers through a private lawsuit. For additional details, see HERE.
Prior Federal Authority
CREAMMA’s anti-discrimination protections were first tested in federal court in Zanetich v. Wal-Mart Stores East, Inc., where an applicant sued prospective employer Walmart for rescinding a conditional job offer after he tested positive for cannabis. The New Jersey District Court dismissed the case finding that CREAMMA did not provide applicants or employees with a private right of action against employers. The Third Circuit affirmed the decision. For additional details, see HERE.
Spliff-ing From Federal Authority: Sanders v. The Levari Group, LLC
Background
After interviewing for a customer service position, plaintiff received and accepted an employment offer from the defendant company. As part of the standard hiring process, plaintiff was required to take a drug test. The results indicated that plaintiff used cannabis within the past 30 days. While she admitted to recreational cannabis use, plaintiff alleged that she neither used cannabis on the day of the drug test nor was she under the influence when she applied for employment. After plaintiff contacted HR to inquire about her start date, the company offered her the opportunity to retake the drug test within a week at her own expense. However, plaintiff was unable to retest due to financial constraints. The company then rescinded its offer and refused to hire her.
Plaintiff sued asserting the following claims and reasoning:
- CREAMMA Violation: Defendant refused to hire her based on her recreational cannabis use; and
- Common Law Wrongful Discharge: Defendant contravened “public policy embodied by CREAMMA” by refusing to hire her based on her recreational cannabis use.
Plaintiff later sought to add the following claims:
- Breach of Contract: Defendant rescinded the job offer based on an unlawful condition;
- Negligence: Defendant failed to follow the standard of care under CREAMMA’s anti-discrimination provision; and
- Invasion of Privacy: Plaintiff submitted to the drug test under false pretenses that defendant would comply with the law.
Procedural History
While the trial court acknowledged it was “unfortunate” that the CRC did “not make it easy for an individual to seek relief for a violation of [CREAMMA][,]” it found no evidence that the Legislature intended to imply a private right of action to enforce the statute. Concluding that enforcement authority rested with the CRC, the trial court dismissed the complaint.
Appellate Division’s Decision and Analysis
In a matter of first impression in state court, the Appellate Division held that CREAMMA provides individuals with a private right of action against employers for adverse actions based on their cannabis use. The Appellate Division reversed, in substantial part, allowing all claims to proceed with the exception of the wrongful discharge claim.
The Appellate Division reasoned that federal and New Jersey courts “have held that a statute that does not expressly create a private cause of action may, nonetheless, implicitly create one.” Applying New Jersey’s framework for implied causes of action, the Appellate Division found that:
- Plaintiff is part of the class the statute intends to benefit, particularly as it relates to CREAMMA’s anti-discrimination provisions;
- The statute contained “rights-creating” language and does not contain an administrative remedy for those discriminated against in violation of the statute; and
- A private right of action is consistent with the legislative purpose because without it, the anti-discrimination protections would be effectively unenforceable.
In sum—while acknowledging that the federal court reached a different conclusion—the Appellate Division bluntly concluded that:
- The overall purpose of CREAMMA “would be served by a private right of action against an employer or potential employer that discriminates against an employee or a candidate who tests positive for cannabinoid metabolite”;
- “[P]ermitting a judicial remedy will not run afoul of or bypass any intricate regulatory structure”; and
- CREAMMA’s anti-discrimination provisions “would be meaningless and unenforceable absent an individual’s right to sue for a violation.”
The Appellate Division affirmed dismissal of the wrongful discharge claim because plaintiff alleged a failure to hire rather than a wrongful discharge.
Employer Toke-Aways: What to Do Now?
While the decision creates a split between New Jersey state and federal courts regarding the availability of a private right of action under CREAMMA, Sanders remains controlling authority in New Jersey state courts unless and until it is superseded by legislation or overturned by the New Jersey Supreme Court. Accordingly, employers should expect increased litigation exposure and heightened scrutiny of hiring, testing, and disciplinary decisions involving lawful cannabis use. To mitigate risk, you’ll juana consider the following:
- Review hiring, drug-testing, and adverse action procedures to ensure applicants and employees are not subjected to adverse employment action based solely on lawful off-duty cannabis use or the presence of cannabinoid metabolites, absent a statutory exception.
- Train HR personnel, recruiters, and hiring managers on CREAMMA’s anti-discrimination protections and the increased litigation risk following Sanders.
- Implement a review process for cannabis-related test results before rescinding job offers, refusing to hire applicants, or taking disciplinary action against employees.
- Document legitimate, non-cannabis-related reasons for employment decisions involving applicants or employees who test positive for cannabis to help defend against potential claims.
If you have any questions related to the Appellate Division’s decision or need assistance reviewing your hiring, drug-testing, or adverse action procedures, please reach out to the NFC Attorney with whom you typically work or call us at 973.665.9100.