Second major cannabis MSO sues New Jersey over labor law

A second major marijuana multistate operator is going to federal court to challenge a licensing requirement friendly to organized labor in New Jersey cannabis law.

And with a federal judge already declaring New Jersey’s labor-peace agreement requirement unconstitutional in a separate case, Chicago-based Verano Holdings Corp. believes its suit, filed July 31, will prevail, records show.

With more than 300 employees in the Garden State, Verano is one of the biggest cannabis companies in New Jersey, according to NJ.com. Like other vertically integrated MSOs in the state, it has a cultivation center feeding four retail locations.

And like other cannabis MSOs, Verano is chafing at worker-friendly licensing requirements imposed by state law.

Why is cannabis MSO Verano suing New Jersey?

Like other states including New York and California, New Jersey requires cannabis companies of a certain size to sign “labor peace agreements” with a recognized union.

The pacts require management and labor to allow workers to consider forming a union without interference on either side, such as management anti-union agitation or a labor-side work stoppage.

But according to Verano, it only signed a labor peace agreement “under duress,” referring to the state law requirement as “illegitimate illegal coercion,” according to filings.

Verano’s July 31 suit preceded a final judgment earlier this month for Curaleaf Holdings, which first challenged New Jersey’s LPA requirement in a lawsuit filed last October.

That suit followed New Jersey cannabis regulators’ attempt to fine Curaleaf $610,000 and withhold the company’s license after Curaleaf let its labor agreement expire in April 2025.

What other cannabis companies sued New Jersey?

According to Verano, the Curaleaf “ruling has direct and immediate significance” in its case, as per filings.

“In light of (that case), the validity of New Jersey’s LPA requirement is no longer an unsettled question,” Verano’s lawsuit said, adding that the LPA requirement “is preempted by federal labor law and may not lawfully be enforced.”

Verano also hired the same management-side law firm, Littler Mendelson, that represented Curaleaf, records show.

So far, the Curaleaf ruling only applies to that company. Verano’s lawsuit seeks a declaration from a judge clarifying that the ruling also applies to Verano.

New Jersey, which has appealed the Curaleaf case to a federal appellate court, has yet to answer the Verano complaint, filings show.

A state deputy attorney general asked the judge on Wednesday for an extension to file a reply by Sept. 15.

Are cannabis companies labor-friendly?

The case is one of several filed by cannabis companies across the country against the labor-peace agreements that appear in several states’ regulations.

Following a lawsuit, a federal judge in Oregon declared a similar measure unconstitutional in 2025.

In that case, the state filed an appeal that was withdrawn in April after state lawmakers, at the request of organized labor, struck the requirement from state law.

Other lawsuits challenging labor-peace agreements are pending in New York and in California.

In New York, a company called Hybrid NYC, which operates cannabis stores under the brand name Gotham, filed suit against the state last year. That case is still pending in district court, records show.

In California, a cannabis business called Ctrl Alt Destroy, defeated at district court, appealed to the Ninth Circuit, records show.

But cannabis firms have devised other ways to elude labor-friendly laws, critics allege.

These include signing LPAs with so-called “sham unions” that have no record of organizing workers.