New Jersey’s recreational cannabis law doesn’t violate federal law, appellate court says

New Jersey’s recreational cannabis law is able to “coexist” with federal marijuana enforcement laws, a state appellate court said in a decision Wednesday. 

Judge Jack Sabatino, writing for a three-judge panel, affirmed a lower court’s ruling against a group of Highland Park residents who claimed the borough violated federal law by allowing the sale of recreational marijuana, which remains federally illegal.

At the center of the legal fight is an ordinance the council adopted in August 2021 that allowed cannabis retailers, consumption lounges, and delivery services to operate in the borough. A group of anti-cannabis residents claimed not just the ordinance, but the New Jersey Cannabis Regulatory, Enforcement Assistance and Marketplace Modernization Act (CREAMMA), violated the federal Controlled Substances Act, New Jersey Municipal Land Use Law, and other state and federal laws. 

But Sabatino said the state’s recreational law doesn’t violate either section of the Supremacy Clause, which says state laws cannot violate federal laws.

He cited Hager v. M&K Construction, a 2021 New Jersey Supreme Court decision that found the Controlled Substances Act “explicitly leaves room for state law to operate.” In that case, the company was ordered to reimburse costs for a worker’s prescribed medical marijuana after he got injured at work. The company said if it reimbursed those costs, it could face federal criminal liability, an argument the court rejected. 

The Highland Park plaintiffs argued that case doesn’t apply because it focused on medical marijuana, but the Attorney General’s Office and borough officials disagreed. 

Federal justice officials had advised local government officials to deprioritize prosecution of “marijuana activities” that are legal under state law, and Congress passed appropriations bills that barred the Department of Justice from using allocated funds to prosecute marijuana crimes in states where it’s legal, like New Jersey, Sabatino wrote. 

If federal officials decided they wanted to pursue cases more aggressively for violating federal marijuana laws, the state’s law wouldn’t get in the way, he said. The two can coexist simultaneously, he added. 

“CREAMMA does not require any person to possess, purchase, or use marijuana. The statute does not require any business to sell marijuana, or any municipality to adopt, as here, an ordinance to allow marijuana dispensaries within its borders,” he said. “The residents and marijuana businesses of this state act at the risk that their activities might be prosecuted by federal authorities.” 

Sabatino also noted the federal government’s shifting tone on marijuana, saying the executive branch “muddied the waters.” On Tuesday, federal Drug Enforcement Administration officials confirmed they plan to reclassify marijuana from Schedule I to Schedule III. (This wasn’t mentioned in the decision.) 

It’s been over two years since recreational cannabis sales launched in New Jersey after voters approved legalizing marijuana through a 2020 ballot question. More than 100 dispensaries have opened since then, including at least one in Highland Park.

New Jersey’s decision follows other state courts’ rulings, Sabatino said. Oklahoma’s high court held that the state’s 2020 constitutional amendment to allow recreational marijuana was not preempted by federal law. The Supreme Court of New Hampshire also ruled that statutes concerning reimbursement of the cost of medical marijuana did not conflict with the Controlled Substances Act. And most recently, a New York state court underscored Congress’ decision not to interfere with state marijuana laws. 

“We are mindful that some other state court opinions have adopted contrary approaches, but we find them less persuasive than the above cases,” Sabatino wrote. 

While the court affirmed the claims of preemption, the appellate court also reversed the dismissal of the complaint suing over the ordinance that a lower court had found untimely.

The trial court has 20 days to convene a case conference regarding the dismissed filing. Attorneys for the borough and the residents did not respond to requests for comment.