New Jersey Legislation Introduces New Labor Standards for Cannabis Operations

New Jersey recently enacted legislation expanding labor protections for employees working in the state’s licensed cannabis industry. The new law is aimed at addressing long-standing gaps in worker coverage created by the intersection of federal labor law and cannabis-related employment, particularly for employees whose work has historically fallen outside traditional federal protections.

A central feature of the legislation is the extension of collective bargaining rights and unfair labor practice protections to cannabis employees who are not covered by the federal National Labor Relations Act. By doing so, the law establishes a state-level framework governing labor relations in the cannabis sector, bringing these employees more closely in line with workers in other private industries.

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New Federal Law Limits Sale of Hemp-Derived THC Products

On November 12, 2025, President Trump signed into law a federal measure that substantially limits the production and sale of hemp-derived intoxicating products across the country. The legislation, tucked into the broader bill that ended the lengthy government shutdown, has generated immediate concern throughout the national hemp industry, with many businesses warning that the new standards may effectively force them out of the market.

Under the newly enacted federal framework, the definition of “hemp” is significantly tightened. All forms of THC, including isomers and precursor compounds capable of producing a psychoactive effect, will now count toward the federal limit. This redefinition includes THCA and other hemp-derived THC compounds that the hemp-derived cannabis market primarily manufactured and sold under the prior version of the law.

The new law also imposes a 0.4 mg total THC limit per container of hemp product.  The prior limit was 0.3% on a dry-weight basis, which still applies in addition to the 0.4mg cap.  This has the effect of significantly limiting the amount of hemp-derived THC that is permissible in a given package.  Products that exceed the new threshold will now fall under federal cannabis prohibitions.

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Controversial New Law Restricting Hemp Sales in NJ Spurs Lawsuit by Hemp Businesses

On September 12, 2024, New Jersey Governor Phil Murphy signed Senate Bill 3235 into law, igniting controversy across the state’s hemp industry. The new legislation restricts businesses from selling hemp products unless they possess a cannabis retail license, a move that prompted hemp businesses to file a lawsuit challenging the law’s restrictions on their ability to operate freely and arguing that it unfairly limits access to the market.

The aim of the new law is to curb the sale of hemp products containing delta-8 THC to minors. Delta-8 THC is a milder cousin of delta-9 THC, the active ingredient in cannabis. While hemp products became federally legal in 2018 under The Agriculture Improvement Act, state-level restrictions are becoming more common as concerns grow over the accessibility of THC-containing products to children.

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House of Representatives Passes Bill to Decriminalize Cannabis

On December 4, 2020, the House of Representatives voted 228-164 to pass a bill, the Marijuana Opportunity, Reinvestment, and Expungement Act, that decriminalizes cannabis at the federal level.  Specifically, the bill removed cannabis from the Controlled Substances Act, and would require federal cannabis convictions to be expunged.  The bill is not expected to gain traction in the Republican controlled Senate, as just five Republican representatives voted in favor of the bill.  Nevertheless, this vote is the most significant federal action to legalize cannabis in the country’s history.  

United States House of Representatives

Bill that Would Provide Cannabis Industry with Access to Banking and Insurance Services Advances in the House

Iconic image of a bank.As a recreational cannabis bill in the New Jersey legislature stalls, federal legislation directed at expanding the cannabis industry’s access to banking and insurance services advances in Congress.   On March 28, 2019, the U.S. House of Representatives Committee on Financial Services approved H.R. 1595, the Secure and Fair Enforcement (SAFE) Banking Act.  The bill was introduced to allow the cannabis industry to have access to financial services and to enhance public safety by reducing the industry’s reliance on cash.  It provides a safe harbor for financial services companies, including banks, credit unions, and insurers, to serve cannabis-related businesses operating under state law without the threat of regulatory backlash or criminal prosecution.

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Federal Reserve Chair Asks for Clarity on Cannabis Banking Issues

Image of Fed. Chairman Jerome Powell

Fed. Chairman Jerome Powell

This blog has previously addressed the difficulties the cannabis industry encounters with the current federal banking system.  One potential solution proposed by Governor Murphy was the establishment of a state bank for cannabis businesses only, which has yet to materialize.

A recent development on this issue took place nationally when Chairman of the Federal Reserve Jerome Powell requested clarity on this subject from the Senate Banking Committee.  Chairman Powell was responding to a question from Senator Robert Menendez (D-N.J.), who raised that New Jersey is moving toward legalization of recreational cannabis.  The concern for Senator Menendez – as is the concern for many in the industry – is that cannabis businesses will be shut out of the banking industry and will be forced to operate only in cash, which is a safety risk.

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Early Cannabis Trends in 2019

With the new year in full swing, New Jersey Cannabis Counsel highlights some of the most impactful news relevant to the potential legalization of cannabis in New Jersey.

New Attorney General Uninterested in Legal Cannabis Businesses?

Photo of William Barr

United States Attorney General Nominee William Barr

New Attorney General nominee William Barr testified at his confirmation hearing that he does not intend to pursue cannabis businesses operating legally pursuant to state regulations.  This is an about-face from former Attorney General Sessions, who rescinded the Cole Memorandum, which was the Obama era policy document that effectively told the Department of Justice to only pursue legal cannabis businesses that were linked to cartels, children or trafficking cannabis to states where it is not legal.  Mr. Barr has also called for additional cannabis cultivation for research purposes, and understands that the new bill legalizing the growth of hemp has implication for cannabis.  Mr. Barr has not formally committed to preparing a revised Cole Memorandum, but if confirmed, Mr. Barr as Attorney General would be a potential boon for the cannabis industry.

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Federal Court Finds that Employers in New Jersey are not Required to Waive Drug Test for Medical Marijuana

Image of Medical Marijuana InsigniaThe issue of whether an employer is required to accommodate an employee’s alleged disability by allowing the use of medical marijuana for chronic pain and waive the requirement that he pass a drug test as a condition of employment, was recently addressed by a New Jersey federal court.  In Cotto, Jr. v. Ardagh Glass Packing, Inc., the plaintiff, a forklift operator, hit his head and was asked to take a drug test to continue his employment.  The plaintiff employee told his employer that he could not pass a drug test because he used medical cannabis for pain management to recover from back and neck injuries.  His employer responded that passing a drug test was a condition of his employment, and he was indefinitely suspended.  The employee filed a lawsuit alleging that the New Jersey Law Against Discrimination (“NJLAD”) required that his employer waive the requirement that he pass a drug test as a condition of employment in order to accommodate his disability.

The employer filed a motion to dismiss the plaintiff’s complaint on the basis that the Compassionate Use Medical Marijuana Act (“Medical Marijuana Act”) did not require the employer to accommodate the employee and allow him to continue working while he was unable to pass a drug test based on the use of a substance that is illegal under federal law.  The United States District Court for the District of New Jersey, Camden Vicinage, granted the employer’s motion to dismiss, finding that neither the Medical Marijuana Act nor NJLAD compelled the employer to waive the employee’s drug test requirement.

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Sen. Gardner Satisfied with Trump Administration’s Position on Legal Cannabis

Following Attorney General Sessions’ rescinding of the Cole Memorandum, the most vocal opposition has come from within the Republican Party.  Senator Cory Gardner has consistently held up Department of Justice nominees based on his perception that Gen. Sessions reneged on a promise to continue the Obama Administration’s decision not to enforce cannabis laws in states that have legalized.

Recently, Sen. Gardner and President Trump had a private discussion about the cannabis industry and Gen. Sessions.  In response, Sen. Gardner dropped his attacks on Department of Justice nominees, noting:

“I have received a commitment from the president that the Department of justice’s rescission of the Cole memo will not impact Colorado’s legal marijuana industry.  Furthermore, President Trump has assured me that he will support a federalism-based legislative solution to fix this states’ rights issue once and for all.”

Portraits of Senator Gardner and President Trump

Sen. Gardner and President Trump

While this statement does not offer particulars, two important questions emerge.  The first is whether any leniency vis a vis legal cannabis will only be afforded to Colorado – the state with the Republican legislator whose actions were negatively impacting a Republican political agenda – or to all states with legal cannabis (irrespective of the party affiliations of their elected officials).  The second focuses on how serious the President (and the Congress) is about a pledge to resolve the discrepancies between state and federal marijuana laws.

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Attorney General Sessions Clarifies DOJ Position on Legal Cannabis Businesses

This blog has discussed Attorney General Sessions and his recent actions to rescind the Cole Memorandum, an Obama Administration directive that federal law enforcement should not pursue cannabis businesses operating legally within a state’s regulatory framework.

Recently, General Sessions explained that, notwithstanding the retraction of the Cole Memorandum, the Department of Justice would still functionally follow the same policies based on a lack of resources:

Jeff Sessions“We’re not going to be able, even if we desired, to take over state enforcement of routine cases that might occur,” Sessions acknowledged. “Federal agents are highly paid, highly trained, and they work on cases involving cartels, international organizations, major distribution networks, large amounts of cash. And they deal with criminal organizations, RICO-type cases. And we’re not out there prosecuting those cases every day.”

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