Verano Sues New Jersey Over Mandatory Cannabis Labor Peace Agreements

Multi-state operator Verano is asking a federal judge to strike down New Jersey’s requirement that cannabis companies sign labor peace agreements with unions as a condition of holding a license, arguing the mandate is preempted by federal labor law and that its own union agreements should be torn up.

In a complaint filed July 31, 2026 in the U.S. District Court for the District of New Jersey, Verano Holdings Corp. and its New Jersey subsidiary sued the state’s Cannabis Regulatory Commission, its three commissioners and acting executive director, and Local 360 of the United Food and Commercial Workers, the union Verano signed with. The case lands just as the company’s licenses come up for renewal: its Neptune Township dispensary license expired August 1, 2026, its Mount Holly license lapses November 11, 2026, and several more run out December 31, 2026.

The lawsuit leans on a ruling three months earlier in a nearly identical challenge brought by rival Curaleaf. On May 27, 2026, U.S. District Judge Michael A. Shipp denied the commission’s motion to dismiss Curaleaf’s case and found the company was likely to succeed on its claim that the National Labor Relations Act preempts New Jersey’s labor peace requirement. The judge declined to block enforcement while that case proceeds, but the reasoning handed Verano the legal foundation for its own suit.

What Verano is asking the court to do

Verano operates four Zen Leaf dispensaries in New Jersey, in Elizabeth, Lawrence Township, Neptune Township, and Mount Holly, plus a 120,000-square-foot cultivation and manufacturing facility in Branchburg. The complaint puts its New Jersey workforce at roughly 300 people, the majority full-time.

The company is seeking two declarations. First, that New Jersey’s labor peace mandate is preempted by the National Labor Relations Act and cannot be used to deny, condition, suspend, revoke, or refuse renewal of any Verano license. Second, that its labor peace agreements with Local 360 are voidable at Verano’s option, leaving the company free to exit the union relationship.

Verano signed its first agreement with Local 360 on August 24, 2018, and signed additional pacts on February 7, 2024 for Mount Holly and November 19, 2024 for a Camden dispensary. Those agreements require Verano to stay neutral on union organizing, bar it from making negative statements about the union, give the union access to its premises during work time, require it to hand over employee contact information, and commit it to recognizing the union based on signed authorization cards rather than a secret-ballot election.

“Verano did not want any of these terms,” the complaint states. “Had it been free to do so, it would not have accepted any of them. In fact, it would have signed no LPA at all.”

The company offers three contract-law theories for walking away: mutual mistake, because both sides believed the state requirement was valid; duress, because Verano signed only under threat of losing its license; and frustration of purpose, because the agreements existed to satisfy a licensing condition the Curaleaf court has now found likely invalid.

How New Jersey built the mandate

New Jersey’s labor peace requirement predates adult-use sales. In 2018, the state Department of Health scored medical cannabis license applications and awarded 30 points to applicants that had signed an agreement with a bona fide labor organization. In a competitive licensing round, the complaint says, no applicant could realistically win without one.

The state’s 2021 legalization law, the Cannabis Regulatory, Enforcement Assistance, and Marketplace Modernization Act, later wrote the requirement into statute. Under that law, an applicant for most cannabis licenses must submit an attestation from a qualifying union that an agreement is in place, and maintaining it becomes an ongoing and material condition of the license. A lapsed or violated agreement can cost a company its license. Microbusinesses and conditional, distributor, and delivery licenses are excluded.

The law also defines which unions count. A bona fide labor organization must, among other criteria, have a written constitution for the prior three years, file annual financial reports with the U.S. Department of Labor, and belong to a national labor organization with at least 500 general members in a majority of states. The complaint argues those criteria effectively shut out new or worker-formed unions and have left established unions, above all Local 360, dominating cannabis organizing in the state.

The Curaleaf ruling underneath it all

Judge Shipp’s May 27, 2026 opinion in the Curaleaf case, attached to Verano’s complaint as an exhibit, found the labor peace mandate likely preempted on two independent grounds. Under the doctrine known as Garmon preemption, states may not regulate activity that federal labor law protects, prohibits, or arguably covers. The court concluded the requirement conditions a state license on an employer giving up conduct protected by federal law, including the option to insist on a board-supervised secret-ballot election.

Under a second doctrine, Machinists preemption, states may not regulate conduct Congress meant to leave to the free play of economic forces between labor and management. The court found the mandate forces employers into negotiations over a permissive subject and restricts their resort to economic weapons such as lockouts.

The commission had argued that federal illegality of cannabis should insulate the state scheme from preemption. The court rejected that, holding that the balance of power Congress designed for labor relations has no effect on, and is not displaced by, Congress’s ban on cannabis. The same opinion denied Curaleaf’s request for a preliminary injunction, so the requirement remained in force as the case continued.

The commission has enforced the mandate with real penalties. In August 2025 it hit Curaleaf with a $610,000 civil fine, calculated at $5,000 per day for 122 days the company operated without a valid agreement after its pact with Local 360 expired in April 2025. The commission also conditioned renewal of Curaleaf’s Bordentown license on securing a new agreement by October 31, 2025. Labor tensions between operators and the UFCW have surfaced elsewhere in the state, including a Green Thumb Industries facility where workers voted to decertify the union in July 2026.

What happens next

The Cannabis Regulatory Commission held its next scheduled public meeting on Thursday, August 6, 2026. Neither the commission nor Local 360, which is named as a defendant, had responded publicly to the suit as of its filing.

Verano’s license calendar gives the case its urgency: the Mount Holly renewal arrives November 11, 2026, and the company’s remaining New Jersey licenses expire December 31, 2026. If the court adopts the Curaleaf reasoning, New Jersey’s labor peace condition would be unenforceable against Verano; if it does not, the company faces the same choice Curaleaf did, sign with a union or risk the licenses that keep its roughly 300-person New Jersey operation running.