New Jersey employers have been navigating workplace cannabis rules since recreational marijuana became legal in the state in 2021. A recent court decision has now raised the stakes considerably: Employees and job applicants may sue employers directly for violating the employment protections contained in New Jersey’s cannabis law.
This means that an outdated drug-testing policy or an automatic decision based on a positive cannabis test may quickly become a lawsuit.
What changed in New Jersey?
On May 26, 2026, the New Jersey Appellate Division issued a precedential decision in Sanders v. Levari Group, LLC. The court held that New Jersey’s Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, commonly known as CREAMMA, permits employees and applicants to bring private lawsuits against employers for alleged cannabis-related employment discrimination.
The case involved a woman who applied for a customer service position and received a conditional job offer. After she tested positive for cannabis metabolites during a pre-employment drug screening, the employer gave her the option of paying for a second test. She declined, and the company withdrew its offer.
The applicant claimed that the positive result came from lawful, off-duty recreational cannabis use, and that she was not impaired during the interview or hiring process.
A lower court dismissed her CREAMMA claim, finding that the law did not expressly give individuals the right to sue. The Appellate Division reversed that decision, concluding that allowing private lawsuits was consistent with the law’s purpose of protecting workers and applicants from discrimination based on lawful cannabis use.
A positive test is not the same as impairment
New Jersey employers still have the right to maintain a drug- and alcohol-free workplace. They may prohibit employees from using, possessing or being impaired by cannabis during working hours.
What employers generally cannot do is take adverse action solely because someone lawfully uses cannabis outside of work or receives a positive test result, without additional evidence of workplace impairment.
That distinction matters, because cannabis metabolites can remain detectable long after the intoxicating effects have ended. A positive test may establish prior use, but it does not necessarily show that an employee was impaired while performing their job.
Employers that automatically reject applicants or discipline employees based only on a positive cannabis result may therefore face increased legal exposure.
New Jersey is not alone
A recent Pennsylvania case provides another warning about relying too heavily on drug-test results or federal law.
In that case, an employer fired a registered medical-marijuana patient after he tested positive following a workplace injury. A federal court refused to dismiss the employee’s claims, rejecting the employer’s argument that federal controlled-substance and firearms laws automatically overrode Pennsylvania’s medical-marijuana protections. The court found that questions remained about whether the employee’s actual job duties gave him access to firearms.
Although Pennsylvania’s law differs from New Jersey’s, the message is similar: Broad assumptions and automatic employment termination rules are risky. Employers must consider the applicable state law, the employee’s specific position, the reason for the testing and the available evidence of actual impairment.
Federal cannabis rules also are evolving. In April 2026, the federal government placed certain FDA-approved and state-regulated medical-marijuana products in Schedule III, which includes drugs with a moderate to low potential for physical and psychological dependence. Meanwhile, the broader administrative process concerning marijuana rescheduling continues. These developments make it increasingly difficult for employers to rely on a general statement that marijuana remains illegal under federal law as a complete defense to an employment decision.
What should employers do now?
New Jersey employers should review their drug-testing and cannabis policies immediately. Policies should distinguish between lawful off-duty use, a positive test, and observable workplace impairment.
Managers and supervisors also should be trained to identify and document objective signs of impairment, such as changes in coordination, speech, behavior or job performance. Conclusions should be based on specific observations, not stereotypes, rumors, or the existence of a medical-marijuana card.
Before withdrawing an offer, suspending an employee or terminating employment because of cannabis use or test results, employers should carefully review the facts and obtain legal guidance.
New Jersey’s cannabis law now creates significantly greater legal exposure for employers. Companies that continue to rely on outdated zero-tolerance policies may find that the real risk is not the positive test itself, but the employment decision that follows.
If you are uncertain whether your drug-testing policies comply with New Jersey’s evolving cannabis laws, contact Rubin Employment Law to schedule a Strategy Session to discuss your workplace practices and potential risks. Email legaladmin@alixrubinlaw.com, or call us at 973-787-8442
This blog is for informational purposes only. It is not offered as legal advice, nor is it intended to create an attorney-client relationship with any reader. Consult with a competent local employment counsel to determine how the matters addressed here may affect you.
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