New Jersey Appellate Division Recognizes Private Right of Action Under CREAMMA

In a significant development for New Jersey employers, the state appeals court has held that the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act (CREAMMA) permits individuals, including applicants, to bring private lawsuits against employers for alleged cannabis‑related employment discrimination. The May 26, 2026 decision in Sanders v. Levari Group, LLC marks a departure from prior federal authority and substantially increases litigation risk in this evolving area.

Background

CREAMMA, enacted in 2021, prohibits employers from refusing to hire, discharging, or otherwise taking adverse action based solely on an individual’s lawful off-work use of cannabis or a positive drug test showing the presence of cannabinoid metabolites. 

Until now, there has been uncertainty over whether individuals could seek to enforce these provisions in court. Prior to this state court decision, the only analysis and guidance came from a New Jersey federal district court decision, which was upheld by the Third Circuit after appeal, which concluded that no private right of action existed under CREAMMA. The 2026 decision now creates a direct split between state and federal courts interpreting New Jersey law, creating strategic issues on forum‑selection and removal for potential litigants.

In Sanders, the New Jersey Appellate Division reversed course, disagreeing with the Third Circuit to hold that, although CREAMMA does not explicitly create a private enforcement mechanism, a private right of action can be implied under New Jersey law. 

The court found the statute’s language (“no employer shall…”) reflects legislative intent to create rights for CREAMMA’s intended beneficiaries—job applicants and employees—and there is no alternative enforcement scheme to achieve the anti-discrimination provisions of CREAMMA. The court held that allowing private lawsuits is necessary to effectuate CREAMMA’s remedial goals and prevent the protections from being “meaningless.”

As a result, the court reversed the decision dismissing the first count of the plaintiff’s complaint, which sought damages due to the unlawful rescission of a job offer based on a positive cannabis test.

Multi-theory litigation and rejection of Pierce claims

The court, however, embraced a portion of the federal court decision, agreeing that common law wrongful discharge claims under Pierce v. Ortho Pharmaceutical Corp.¹ do not extend to job applicants. 

Although the court rejected the plaintiff’s Pierce claims, it left open the possibility for multi‑theory litigation by also allowing the plaintiff’s negligence, privacy, and breach of contract claims to proceed. 

Employer takeaways

The Sanders decision materially expands the risk of litigation under CREAMMA against employers alleged to have violated its provisions. 

Employers can expect an increase in private lawsuits from applicants and employees, including claims for back pay, emotional distress, and punitive damages. 

Employers operating in New Jersey should consider:

• Reassessing drug testing and hiring protocols.
• Ensuring cannabis‑related decisions are tied to legitimate, documented business reasons (e.g., impairment or federal compliance²).
• Preparing for increased litigation in this space.