A $5,000-a-Day Meter and a Federal Judge: New Jersey's Cannabis Union Mandate Falls

On April 22, 2025, William Wallace, the Director of Labor Compliance and Education at New Jersey's Cannabis Regulatory Commission, sent an email to Curaleaf. He had been informed, he wrote, that the company's labor peace agreement with United Food and Commercial Workers Local 360 had expired. That agreement, he reminded them, was a continuing and material term of Curaleaf's license, and the company needed to produce written proof of a mutual extension. (S2)

Curaleaf could not produce one. The agreement, signed on April 6, 2022, in the two weeks before New Jersey's adult-use market opened, had lapsed after the company and the union failed to agree on renewal terms. Two weeks after Wallace's email, on May 6, the commission issued a Notice of Violation. Twenty business days to fix it, the notice said, with the commission reserving the right to impose sanctions. On August 25 the sanction arrived: a Notice of Enforcement Action assessing $5,000 per day for 122 days without a labor peace agreement, or $610,000. A month later, on September 28, the commission renewed the license for Curaleaf's Bordentown dispensary only on the condition that the company sign a new agreement by October 31. (S2)

Curaleaf's answer came on October 9, 2025, in the form of a federal complaint filed in Trenton with a declaration from its Chief Legal Officer, Peter Clateman, attached. Losing the licenses, its lawyers wrote, would be "the commercial equivalent of the death penalty." What the company wanted was not a new union deal. It wanted a judge to say New Jersey could never have demanded one. (S1, S3)

On August 10, 2026, it got that judge. U.S. District Judge Michael A. Shipp entered final judgment declaring that the labor peace agreement requirement in New Jersey's Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, the CREAMM Act, is preempted by the National Labor Relations Act. The civil case was terminated the next day. On August 13, the state filed its notice of appeal to the U.S. Court of Appeals for the Third Circuit in Philadelphia. (S1, S3, S4)

The judgment matters well beyond four Curaleaf facilities in Bellmawr, Bordentown, Edgewater Park and Winslow, which together employ 195 full-time and 41 part-time workers. New Jersey is one of the most union-friendly states in the country, and its cannabis statute was written to keep it that way: licensees must sign a labor peace agreement with a "bona fide labor organization" and enter, or make a good-faith effort to enter, a collective bargaining agreement within 200 days of opening. California, New York, Connecticut, Rhode Island and, until a federal judge intervened in 2025, Oregon carry versions of the same mandate. Shipp's opinion is now the second federal ruling to hold that a state cannot condition a cannabis license on surrendering rights the NLRA gives employers. (S1, S2, S4, S10)

The legal architecture of the ruling was laid down in a 31-page memorandum opinion Shipp signed on May 27, 2026, after oral argument on April 2. That opinion denied both sides' motions: Curaleaf did not get its preliminary injunction, and the commission did not get the case dismissed. But in the course of denying them, Shipp resolved the merits question in Curaleaf's favor, and the August 10 order converted that reasoning into a final, appealable judgment. (S2, S4, S16)

The state's first line of defense was that Curaleaf should not be heard at all. Cannabis is a federally illegal product, the commission argued through the office of New Jersey Attorney General Jennifer Davenport, and a business built on selling it comes to federal court with unclean hands. "This court should not use its equitable authority to enjoin the very state licensing safeguards that Curaleaf must satisfy to operate in a federally unlawful market," the state's brief said. A federal judge in California had accepted precisely that argument in March 2025 and dismissed a challenge to that state's labor peace mandate without reaching the merits. (S1, S7, S11)

Shipp did not accept it. The unclean-hands doctrine, he wrote, requires an immediate and necessary relationship between the misconduct and the claim, and a dispute over whether a state labor rule conflicts with federal labor law has no sufficient nexus to the federal illegality of the product being sold. He drew a line between the cannabis product market, which Congress has banned, and the cannabis labor market, which federal labor law has repeatedly regulated, citing the D.C. Circuit's 2024 decision in Absolute Healthcare v. NLRB and the District of Oregon's 2025 ruling in Casala v. Kotek. He also declined to abstain in favor of the state administrative proceeding over the $610,000 fine, finding it lacked the hallmarks of a quasi-criminal enforcement action. (S1, S2, S4)

On the merits, Shipp found the mandate preempted under both of the Supreme Court's NLRA preemption doctrines. Under Garmon, states may not regulate conduct the NLRA arguably protects or prohibits; the labor peace requirement, he wrote, short-circuits the NLRA's processes by denying an employer the option of an NLRB-supervised secret-ballot election and by compelling bargaining over a subject, signing a labor peace agreement, that federal law leaves optional. Under Machinists, states may not intrude on the zone Congress left to the free play of economic forces; the requirement strips employers of economic weapons such as lockouts that are, in the court's phrase, part and parcel of the bargaining process. The state's argument that nothing about a federally illegal market is "unregulated" did not move him: the balance Machinists protects, he wrote, is a balance in labor relations, not in the underlying product market. (S2, S4)

The standard terms Curaleaf described in its complaint, and which the court accepted as true for purposes of the motion, explain what was being fought over. Local 360's agreements, Curaleaf alleged, require the employer to stay neutral during organizing, refrain from negative statements about the union, give organizers access to the premises during work time, let the union designate the bargaining unit, hand over employee contact information, announce its neutrality at an open meeting, and recognize the union on a card check rather than a secret ballot. After signing, Local 360 organized Curaleaf's facilities on cards; no election was held. In October 2022 the union and the company reached a tentative contract, and Curaleaf's own employees voted it down at ratification. (S2)

Curaleaf did not get everything it asked for. Shipp denied the preliminary injunction because the company had waited too long: it knew its agreement expired in April 2025, was warned in May and fined in August, yet did not sue until October 9 or seek emergency relief until two weeks after that. An "unexplained and 'tremendous delay' of multiple months," he wrote, showed a lack of urgency, and any harm was partly self-inflicted. The commission had, in any case, agreed on October 29, 2025, to voluntarily stay the expiration of the Bordentown license while the motion was pending, and its acting executive director, Christopher Riggs, repeatedly recommended extending Curaleaf's adult-use permissions, through August 1 by a 4-0 vote in May, while the case ground on. (S1, S2, S7)

The union that had spent three years bargaining with Curaleaf was never a party to the case. That did not keep Hugh Giordano, Local 360's director of organizing, out of it. "I believe that Curaleaf and those like them are trying to capitalize off the federal government and the (Trump) administration, which is the most anti-union administration I have seen in my career," he told MJBizDaily in October 2025, days after the complaint was filed. At the commission's May 14, 2026 public meeting, Giordano used the comment period to warn that companies were threatening to buck their agreements, and to argue that some were already violating the "peace" half of the bargain by pulling workers into anti-union meetings. "We have negotiated with some really great employers," he added. (S6, S7)

“Although Congress declared cannabis federally illegal, federal law has been applied many times to workers and the labor market within the cannabis industry.”

— Michael A. Shipp, U.S. District Judge, District of New Jersey

The union's position deserves to be stated on its own terms, because it is not simply that unions want members. New Jersey's labor peace scheme predates the CREAMM Act: the state Department of Health began awarding 30 application points for a signed agreement in 2018, before the mandate was written into statute, and the UFCW was part of the coalition that pushed legalization. Labor peace agreements, in the union's own literature, are a two-way exchange, the employer stays neutral, and the union gives up strikes and boycotts that could shut a licensed business. Cannabis employers can and do close facilities: Curaleaf announced the wind-down of its Bellmawr cultivation site in March 2023, less than three weeks after 120-plus workers at its Bellmawr dispensary organized, a sequence the company attributed to demand and its newer Winslow grow, and bankrupt Cannabist is closing two Vineland grows this October, laying off 86. Strip the mandate away, the union argues, and the state loses the only lever that made a licensee sit down before the first card was signed. The UFCW also warned the commission in May that if Curaleaf could walk away from this contract, every other signed agreement in the state was at risk. (S1, S5, S7, S8)

That warning proved prescient within weeks. On Friday, July 31, 2026, Verano Holdings, which runs four Zen Leaf dispensaries in Elizabeth, Lawrence Township, Neptune Township and Mount Holly plus a Branchburg cultivation and processing facility, with about 300 staff, filed its own federal complaint against the commission and, unlike Curaleaf, named Local 360 as a defendant. Verano's Neptune license was up for renewal August 1 and Mount Holly's comes due in November. Its complaint borrows Curaleaf's language nearly verbatim ("Verano did not want any of these terms") and asks for something Curaleaf did not: a declaration that its existing agreements with Local 360 are voidable, because both sides signed under a legal compulsion that Shipp's May opinion had already found unlawful. Spokespeople for the union and the commission did not respond to the New Jersey Monitor's requests for comment. (S5)

Krista Nash, the commissioner who has been the mandate's most vocal defender, framed the stakes three years ago in a sentence that has followed the agency since. On April 13, 2023, the commission voted not to renew Curaleaf's adult-use licenses over concerns that included its labor practices and the Bellmawr closure. Four days later, with a crowd of Curaleaf workers, hundreds, by the company's count, rallying outside its Trenton offices and Curaleaf's counsel, former state Attorney General Christopher Porrino of Lowenstein Sandler, threatening an immediate appeal, the commission reversed itself 4-1 in an emergency meeting and renewed the licenses with conditions, including "evidence of good faith efforts" to bargain. "Let me make this very clear: It is time that we favor people over profits," Nash said. Chair Dianna Houenou, who had abstained the first time, read out the conditions the second. Then-CEO Matt Darin called it an "incredible victory" for the company's 500 New Jersey workers; Chairman Boris Jordan had pledged "any legal means necessary" to secure renewal. (S1, S8, S9)

Management-side lawyers read the August judgment as an invitation. Eskenazi, writing for Fox Rothschild, said the ruling gives dispensaries in states with comparable mandates a roadmap for their own preemption challenges and flagged the rights employers may now insist on: NLRB-run secret-ballot elections, economic weapons, and the freedom to decline bargaining over permissive subjects. He also called it a case to monitor given the state's appeal. The Ninth Circuit is already sitting on the Oregon appeal, Casala v. Kotek, docketed June 12, 2025, after Judge Michael H. Simon struck down that state's voter-approved Measure 119 on both NLRA and First Amendment grounds. A New York retailer filed a parallel challenge to the Marihuana Regulation and Taxation Act's mandate on April 14, 2025, and Rhode Island's rule has been challenged as well. If the Third and Ninth Circuits agree, the mandate model that unions spent a decade building into state cannabis statutes is in serious trouble; if they split, the question is headed toward the Supreme Court. (S4, S10, S11, S14)

The ground has been shifting under Local 360 in other ways. On July 14, 2026, the NLRB certified a 94-13 vote by roughly 270 Green Thumb Industries workers at four New Jersey locations to decertify the union, a vote cast in November 2024 and left uncounted for 20 months while the union's blocking charges were resolved. Michael Potter, the lead warehouse technician who filed the petition with National Right to Work Foundation lawyers, said in the foundation's release that the union had been installed by card check and workers had been denied a secret ballot. The same month, sales representatives at The Botanist voted to join Local 360, extending the union further along the supply chain. The union is losing units and winning them at the same time, and the labor peace mandate was the mechanism that let it open every one of those conversations with access. (S12, S17)

1. Third Circuit briefing schedule, the state filed its notice of appeal on August 13, 2026; watch for a motion to stay the judgment pending appeal.
2. Verano v. CRC, a second District of New Jersey judge will decide whether existing Local 360 agreements are voidable; Mount Holly license renewal is due in November.
3. State Office of Administrative Law, the $610,000 penalty proceeding against Curaleaf continues on a separate track.
4. Ninth Circuit, Casala v. Kotek (No. 25-3707), a ruling on the Oregon mandate would set up either a two-circuit consensus or a split.
5. Trenton, whether the Legislature or the commission attempts to redraft the mandate to survive preemption review.

Curaleaf has not issued a public statement on the judgment in any of the coverage reviewed for this article, and neither the company nor the commission responded to MJBizDaily's requests for comment when the suit was filed. The silence fits a company that got what it wanted from the court and now has to defend it in Philadelphia. (S1, S6)

Sixteen months after William Wallace's email set a $5,000-a-day meter running, the fine it produced sits in a state administrative office, the license it threatened has been extended again and again, and the statute it enforced has been declared unenforceable by the one court that has looked at it. Wallace's title, Director of Labor Compliance and Education, describes a job New Jersey built for a market it assumed would always be union-adjacent. Whether that job survives now depends on three judges in Philadelphia, and on how many more Veranos file before they rule. (S2, S3, S5)

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