On October 9, 2025, Curaleaf Holdings, Inc. (alongside its subsidiary Curaleaf NJ II, Inc.) filed a lawsuit in the U.S. District Court for the District of New Jersey (Case No. 3:25-cv-16397) against the New Jersey Cannabis Regulatory Commission (NJ-CRC) and its commissioners. (Justia Dockets & Filings) The complaint argues that the state’s requirement for cannabis license-holders to maintain labor peace agreements (LPAs) with bona fide labor organizations is pre-empted by federal law, specifically the National Labor Relations Act (NLRA). (Law360)
What’s an LPA—and why is it required?
Under New Jersey’s adult-use cannabis statute (the Cannabis Regulatory, Enforcement Assistance and Marketplace Modernization Act (“CREAMMA”)), licensed cannabis businesses—including cultivators, retailers, and alternative treatment centers (ATCs) expanding into adult-use—must maintain an ongoing labor peace agreement with a recognized labor organization as a material condition of their license or permit. (NJ.gov) The enforcement mechanism: failure to hold a valid LPA can trigger fines, license suspension, or revocation. For example, in August 2025 the NJ-CRC imposed a civil penalty of $610,000 on Curaleaf for failing to maintain such an agreement.
LPAs generally bind the employer and union to non-interference duties: the union agrees not to strike or engage in work stoppages, while the employer agrees not to oppose union organizing. For cannabis regulators, the rationale is that LPAs help stabilize industrial relations and support the legal market.
Curaleaf’s Legal Challenge
In its complaint, Curaleaf contends that the LPA requirement:
- Restricts employer and employee rights in ways the NLRA does not permit, including compelling association or union-favoring arrangements as a condition of doing business.
- Creates a state regulatory scheme that conflicts with federal labor law, thus triggering pre-emption of the NLRA. Curaleaf alleges the state requirement imposes obligations on employers that federal law explicitly reserves for the National Labor Relations Board (NLRB) or collective-bargaining processes.
- Makes unionization or union-supportive activity a de facto condition of licensure, thereby coercing employers into arrangements they might not otherwise enter.
- Seeks declaratory and injunctive relief to block enforcement of the LPA mandate against Curaleaf and similarly situated cannabis businesses.
In short: Curaleaf is arguing that while New Jersey may regulate cannabis commerce, that regulation cannot override fundamental federal labor-law principles embedded in the NLRA.
Facts and Context Specific to Curaleaf
The enforcement notice from the NJ-CRC shows that Curaleaf’s LPA with the United Food & Commercial Workers (UFCW) Local 360 expired on April 6, 2025, and the company did not inform the regulator of a renewal or replacement. As a result, the regulator issued a notice of violation on May 6, 2025, followed by a $610,000 penalty for failing to maintain a valid LPA from April 7 through August 7, 2025.
The complaint indicates Curaleaf views the LPA condition as the “commercial equivalent of the death penalty” because it is tied to licensure in a highly regulated, capital-intensive industry. (This language appears in coverage by industry news outlets.) READ MORE: Heady NJ
Implications for the Cannabis Industry & Labor Law
This case raises several critical issues:
- Labor-law pre-emption in a regulated sector
Many states impose labor-related conditions for cannabis licensees—equity requirements, diversity hiring, training mandates, even union-access agreements. Curaleaf’s challenge invites courts to evaluate whether those state mandates cross the line from permissible business regulation into impermissible shaping of union relations under the NLRA. - Conditioning licensure on labor peace agreements
The NJ statute treats the LPA as a “material condition” of the license. That means licensees must maintain it continuously. Curaleaf contests this as an overreach into employer-union relationships, effectively making LPA status a prerequisite to operation. - Impact on multi-state operators (MSOs) and regulation
MSOs like Curaleaf operate in multiple jurisdictions and may face patchwork regimes of labor conditions. A ruling in Curaleaf’s favor could ripple across other state-regulated cannabis markets with similar mandates, altering the regulatory landscape. - Industry policy tensions: stability vs rights
Regulators argue LPAs promote industrial peace and facilitate equitable participation in the emerging legal market. Employers counter that compulsory arrangements undermine autonomy and potentially violate federal labor law. The outcome will influence how states balance these competing interests.
What’s Next?
The case is assigned to Judge Michael A. Shipp in the District of New Jersey. Curaleaf has also sought a temporary injunction to pause enforcement of the LPA requirement while the litigation proceeds.
The NJ-CRC has refrained from commented on pending litigation, per industry reports. As the case unfolds, key motions (such as the motion to dismiss, summary judgment, or injunction briefing) will be critical. Observers will also monitor whether the NLRB or Department of Labor submits a statement of interest.
Why It Matters
For New Jersey regulators, this case tests how far the state can go in setting labor conditions within a nascent commercial industry. For employers and unions, it represents a broader fight over the future interplay between state-licensed industries and federal labor law norms. For industry observers, it signals a pivotal moment: if Curaleaf prevails, the “material condition” model of licensure tied to labor agreements may weaken; if the state prevails, LPAs could become a standardized component of regulated cannabis markets nationwide.
In sum: Curaleaf’s legal gambit isn’t just about one operator—it’s about which body of law controls the employer-union relationship in a legal cannabis market: state or federal? The stakes are high, and the outcome could reshape labor strategy, regulation, and business operations across the cannabis sector.