MONCTON, N.B. -- A New Brunswick medical marijuana producer says it will aggressively defend itself against a class-action lawsuit launched after unapproved pesticides were found in its products.
Moncton-based Organigram Inc. said it was served notice Monday about the suit, filed on behalf of users of medical marijuana that was found to contain low levels of myclobutanil and bifenazate, pesticides not approved for use by licensed growers.
The statement of claim alleges Organigram breached its contract with customers to provide a certified organic product free from unauthorized pesticides.
The proposed class-action, filed by the Halifax-based Wagners law firm in Nova Scotia Supreme Court, has not yet been certified and contains allegations not tested in court.
In a news release Tuesday, Organigram CEO Denis Arsenault said all marijuana harvested since a voluntary recall has tested negative for pesticides.
He said all non-insured users were offered a credit equal to the price of the recalled product.
"The majority of our clients are very satisfied with this action and are already using their credits," he said.
Arsenault noted Organigram has hired Borden Ladner Gervais LLP for its defence, and said the company had allocated $2.26 million this quarter to cover losses associated with the recalls.
"From a financial perspective, we believe there is very little exposure for Organigram going forward," said Arsenault.
The company said it instituted new growing and harvesting protocols after an investigation.
"We have also decided to post all testing results on our website beginning next week," said Arsenault.
Wagners alleges roughly 2,000 people purchased cannabis products containing the pesticides from the company last year.
Organigram issued a voluntary recall of five lots of product in December and 69 lots in January before the company's organic certification was suspended.
The Health Canada recall said dried marijuana and cannabis oil tested positive for low levels of myclobutanil and bifenazate.
Health Canada said there are 13 approved pest control products for use on marijuana. It said last month it was conducting random testing of cannabis products produced by licensed producers in response to recent recalls.
Last year, Mettrum Health Corp. recalled medical cannabis products that were exposed to a foliar plant spray.
Organigram announced earlier this month that Greg Engel would be taking over the role of CEO next Monday. Arsenault will move up to a newly created executive chairman position.
