Organigram hit with class-action lawsuit over tainted products

Organigram is now the subject of a class-action lawsuit involving pesticide-contaminated cannabis.

Halifax firm Wagners Law filed a statement of claim with the Nova Scotia Supreme Court on March 3 alleging that the lead plaintiff consumed the licensed cannabis producer’s medical products for almost a year before learning the cannabis could be contaminated with potentially toxic pesticides. The firm also said in its suit that upwards of 2,000 Canadians may have purchased products containing either banned pesticides myclobutanil or bifenazate.

In a news release today, Organigram CEO Denis Arsenault responded to the legal action, saying it will “vigorously defend our company and its actions related to the product recall.”He added that the company offered all non-insured clients an account credit equal to the purchase price of the recalled product.

“From a financial perspective, we believe there is very little exposure for Organigram going forward,” said Arsenault. “We have already allocated $2.26 million this quarter to cover losses associated with the recalls. We are also talking with our insurer about the company’s coverage related to the proposed class-action suit should the court allow it to proceed.”

Starting next week, Organigram said it will post all test results of its harvested cannabis on its website.

The Moncton-based LP voluntarily recalled tainted products in December and January, and Health Canada subsequently brought in random MMJ-testing procedures across the country.

However, despite an internal investigation, the LP said it could not determine how its MMJ became contaminated with pesticides. The company said that its review was inconclusive, with no evidence “leading to the source of the contamination discovered.”

News of the lawsuit caused a sharp decline in Organigram Holding Inc.’s share price. Shares dropped by 32 cents today, or 12.96 per cent, to $2.15. Over the last five days, shares dropped 14 per cent and are down 25.86 per cent to date from 2016.