Proposed Settlement Reached In Lawsuit Against Organigram
HALIFAX – A proposed settlement has been reached in a class-action lawsuit against Organigram Holdings Inc. over pesticide-tainted cannabis. The Supreme Court of Nova Scotia approved a Notice of Settlement that will be sent to class members beginning Friday.
The class-action stems from two major product recalls Organigram issued in 2016 and 2017, after trace amounts of the pesticides bifenazate, malathion, and myclobutanil were found in its products.
While Health Canada had noted all three chemicals were deemed safe for agricultural use in appropriate amounts, it had not authorized the use of any of them on cannabis.
Once the pesticides were discovered, Organigram voluntarily recalled 74 batches of product, though the class action was filed on behalf of consumers who bought the tainted cannabis before the recall.
Company subsidiary Organigram Inc. operates facilities in three provinces across the country, including its primary indoor growing facility in Moncton. The company is also regulated by Health Canada under The Cannabis Act and Cannabis Regulations.
The proposed settlement applies to anyone who purchased medical cannabis from Organigram that was the subject of a voluntary or involuntary recall, on or before February 14, 2019
The certified action alleged Class members in the lawsuit did not receive the product they had bargained for and should therefore be provided with a return of the purchase price.
Terms of Settlement
As part of the settlement, Organigram has agreed to pay an aggregate of $2.31-million as the settlement amount. A hearing, set for August 31 in Halifax, will consider whether to approve the amount and terms going forward.
For the proposed settlement to become effective, it requires approval by The Supreme Court of Nova Scotia, which will determine if the settlement is fair, reasonable, and in the best interest of the Class.
If approved, the settlement amount will be used to provide Class Members a refund of the amounts paid for the voluntarily recalled product, less any refunds already received, in addition to payment of legal fees.
Organigram has already agreed to pay the third-party claims administration costs.
After approval, those still considered part of the class action will automatically receive an email notification letter from a court-appointed settlement administrator, describing the amount of the individual payment, as well as the payment itself.
Series of earlier appeals
Halifax-based Wagners, a personal injury law firm, began the lawsuit following the initial statement of claim filed on March 3, 2017. The initial lawsuit began as a narrower consumer claim seeking refunds for the tainted products.
It was later expanded to include personal injury claims, after complaints from class members that they suffered from a series of symptoms while consuming the recalled product.
A series of appeals followed, which saw Wagners and Organigram argue in court over whether the personal injury claims were valid.
During the process, Organigram argued November 5, 2020 that it was impossible to know whether the pesticides specifically, and not just cannabis use in general, caused the symptoms described in court.
Wagners also countered, stating the court’s threshold for evidence made it almost impossible for people seeking damages related to relatively new products to successfully win an argument.
A case summary from the court noted expert opinion was “divided on whether there is a workable methodology to determine issues class wide.”
While Organigram has previously declined to answer questions about the case, it has maintained throughout proceedings that the class action would have no “material effect” on the company’s operations and did issue a release notice on the settlement Friday on its website.
Shares of Organigram Holdings Inc (OGI) were up five percent on the TSX in early Friday afternoon trading following the proposed settlement announcement.
Tyler Mclean is a Huddle reporter based in Fredericton. Send him your feedback and story ideas: [email protected].