New Jersey cannabis regulators appeal loss to Curaleaf in labor fight

In a case with serious national implications for cannabis labor relations, state regulators in New Jersey are appealing their recent court loss to a marijuana multistate operator in a spat over a labor-friendly licensing requirement.

Following a federal judge’s Aug. 10 ruling in favor of marijuana MSO Curaleaf Holdings, which claimed that a state requirement to obtain a labor peace agreement with a union violates federal labor law, the New Jersey Cannabis Regulatory Commission filed on Thursday a notice of appeal to the U.S. Circuit Court of Appeals, Third Circuit, court records show.

It’s at least the second time a federal judge has struck down a state’s labor-peace agreement requirement. Depending on how the Third Circuit rules, the situation could spell trouble for cannabis organizing efforts nationwide.

However, for now, the lower-court ruling only applies to Curaleaf and only in New Jersey, law firm Foley Hoag noted in an analysis published Tuesday.

Are cannabis labor-peace agreements unconstitutional?

Cannabis companies across the country are fighting back against the labor-peace agreements that appear in several states’ regulations – and are racking up victories in court.

Following a lawsuit, a federal judge in Oregon declared a similar measure unconstitutional in 2025.

In that case, the state filed an appeal that was withdrawn in April of this year after state lawmakers, at the request of organized labor, struck the requirement from state law.

Other lawsuits challenging labor peace agreements are pending in New York and in California.

In California, a cannabis business called Ctrl Alt Destroy, handed a defeat at district court, appealed to the Ninth Circuit, records show. But cannabis firms have devised other ways to elude labor-friendly laws, critics allege. These include signing LPAs with so-called “sham unions” that have no record of organizing workers.

Do New Jersey cannabis companies need labor-peace agreements?

In Curaleaf’s case, the company filed suit in fall 2025 after New Jersey cannabis regulators threatened to withhold the MSO’s license and impose a $610,000 fine after Curaleaf’s labor-peace agreement lapsed the prior April.

“That is the commercial equivalent of the death penalty,” the company’s attorneys wrote in their initial complaint.

The fine was stayed pending the outcome of the lawsuit.

New Jersey’s LPA law also went further than most by imposing an additional requirement for the cannabis business to negotiate a contract with labor unions within 200 days of opening, or make a “good faith effort” toward doing so.

Curaleaf argued that the federal National Labor Relations Act preempted state-level efforts to interfere with labor relations, and in an Aug. 10 opinion, U.S. District Court Judge Michael Shipp agreed.

At least with respect to Curaleaf’s New Jersey operation, having a labor peace agreement didn’t work out in the union’s favor.

Employees there organized with the United Food and Commercial Workers Local 360 rejected a contract negotiated on their behalf, Shipp’s ruling noted.