New Jersey’s Appellate Court Rules on Who Can Sue for Cannabis Law Violations

Quick Hits

• In Sanders v. The Levari Group, LLC, the Appellate Division found that CREAMMA provides an implied private right of action against employers that refuse to hire individuals based on positive cannabis tests.
• CREAMMA provides that “[n]o employer shall refuse to hire or employ any person or shall discharge from employment or take any adverse action against any employee … because that person does or does not … use cannabis items.”
• In the case, the employer had offered a job to an individual who later tested positive for cannabis metabolites. After the individual declined to pay for a second drug test at her own expense, the employer rescinded its offer.

Background

In December 2022, Darlene Sanders interviewed twice for a customer service representative position with Levari Group, LLC. Levari offered Sanders the position, which she accepted, and required her to take a pre-employment drug test. That test detected the presence of cannaboid metabolites, indicating Sanders had used cannabis within the past thirty days. Sanders admitted to using cannabis for recreational purposes during that time but denied using cannabis on the day of the drug test, nor when she applied to, and interviewed for, her position.

In January 2023, Sanders contacted Levari’s human resources (HR) department to inquire as to her start date. The HR representative replied and offered Sanders the opportunity to submit a second drug test within a week of their correspondence, at Sanders’s own expense. She declined because she could not afford to pay for the repeat drug test, causing Levari to rescind its employment offer. Sanders sued Levari for violating CREAMMA’s prohibition against denying employment solely because of a positive test for cannabis. In April 2024, the trial court dismissed her CREAMMA claim, finding that no private cause of action existed under CREAMMA, reasoning that Sanders’s remedy was through the Cannabis Regulatory Commission, not the courts. Sanders appealed.

The Appellate Division’s Decision

On May 26, 2026, a three-judge panel of the Appellate Division reversed the trial court’s decision, finding that CREAMMA implicitly grants a private right of action. The court held that Sanders satisfied the three-prong test from the Supreme Court of the United States decision in Cort v. Ash,422 U.S. 66 (1975): (1) whether the plaintiff is a member of a class for whose especial benefit the statute was enacted; (2) whether evidence exists that the legislature intended to create a private right of action; and (3) whether implying a private right of action would be consistent with the underlying purposes of the legislative scheme.

Relying on R.J. Gaydos Insurance Agency, Inc. v. National Consumer Insurance Co., the Appellate Division reasoned that “[b]ecause CREAMMA does not provide for administrative enforcement, permitting a judicial remedy will not run afoul of or bypass any intricate regulatory structure.” The court also stated that the anti-discrimination provisions in CREAMMA would be “meaningless and unenforceable absent an individual’s right to sue for a violation.” The court acknowledged that the Third Circuit had reached a contrary conclusion in a 2024 case, but declined to follow that decision.

Next Steps

New Jersey employers should consider reviewing their pre-employment drug testing policies and hiring procedures in light of this decision to ensure compliance with CREAMMA’s anti-discrimination provisions, as this decision opens the door to litigation from both applicants and employees.

Employers in other states where recreational cannabis is legal should also note this decision—courts in those jurisdictions may look to Sanders as persuasive authority when evaluating potential ensuing implied right-of-action questions under their own individual cannabis statutes.

Ogletree Deakins’ Morristown office and Drug Testing Practice Group will continue to monitor developments and will provide updates on the Drug Testing and New Jersey blogs as additional information becomes available.

Michael J. Westwood-Booth is of counsel in the Morristown office of Ogletree Deakins.

Jake H. Weintraub, a law student currently participating in the summer associate program in the Philadelphia office of Ogletree Deakins, contributed to this article.

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