Nova Scotia Supreme Court certifies class action against organic cannabis producer


A Moncton-based medical cannabis producer has been slammed with a class-action lawsuit that has already gotten the approval to proceed to trial.

According to New Cannabis Ventures, the lawsuit was filed against OrganiGram Inc., based in Moncton, New Brunswick, and its parent company, Organigram Holdings Inc., by Halifax-based law firm Wagners, which is representing the plaintiffs.

In a 111-page decision, Nova Scotia Supreme Court Judge Justice Ann E. Smith certified the class action against the Canadian cannabis production company. The lawsuit originates from a potentially serious personal injury due to two different recalls of medical cannabis made by OrganiGram: one in late 2016 and the other in early 2017.

Both recalls were for cannabis produced between February 1 and December 16, 2016, as products manufactured during that period allegedly tested positive for the unauthorized pesticides myclobutanil and bifenazate.

Myclobutanil is a triazole chemical used mainly as a fungicide and is banned in Canada, Washington, Oregon and Colorado for the production of medical and recreational marijuana. Bifenazate is an acaricide chemical that is used to control spider mites in greenhouses, which has led to its usage by medical marijuana growers, despite bifenazate not being registered for use on cannabis. Additionally, bifenazate is not safe for medical marijuana users who already have health complications.

Due to the nature of the damage allegedly caused by OrganiGram, renowned serious injury law firm is representing the plaintiffs, and lawyer Ray Wagner notes that there are two parts to the claim.

“The first part relates to the refund, people bought something that was not what it was made out to be and so we want to return the funds that they had paid as anybody who purchased something, a good or a service, that is not up to snuff and, in this case, where it breached the regulations under the Health Canada regime on cannabis,” Wagner said in a report.

He acknowledged that the second part relates to health complications experienced by the plaintiffs due to the effect of the products they consumed.

“A large number of our class members have also reported that they were ill during this period of time, suffered a lot of signs and symptoms of illness that they correlate to the timing that they consumed this particular product,” he said.

Dawn Rae Downton was appointed by Justice Smith as the representative client. She is a Halifax patient who was prescribed the said medical marijuana for back pain in 2016.

However, a few months after, she reported that the adverse effects of the product—such as nausea and vomiting drastically affected her quality of life.

“I had my head in the toilet for most of 2016, pretty well day and night,” said Downton in an interview. “When you’re vomiting multiple times every day, you get pretty messed up.”

The presence of myclobutanil and bifenazate in OrganiGram’s cannabis products has caused heavy discomfort to buyers as Wagner noted that Downton is just one of the thousands of purchasers who all have the same claim. In total, 176 people have already registered with Wagner for the class-action suit.

According to Wagner, the next step is a "common issues trial," where all the merits of the allegations will be judged.

However, in response to the allegations, OrganiGram said in a statement that it “intends to vigorously defend itself against this class action,” noting that until the legal process is complete conclusions should not be drawn.

“Certification is not a decision on the merits of the lawsuit, but simply deals with the proper procedure for a lawsuit, which allows it to continue to the next stage,” said OrganiGram.

Nonetheless, certification is the first step in a class action, and class-action lawsuits can only proceed with a trial if they have been certified.

OrganiGram already provided reimbursement and credits worth approximately $2 million during the recall as compensation, according to their financial statement.

“OrganiGram has already voluntarily reimbursed many of its customers for this recall via a comprehensive credit and refund program,” the company said.

The company noted that irrespective of the outcome of the class action, they are confident that the lawsuit will pose no threats to their business or its operation, as they have insurance against such instances.

“Organigram has insurance to cover the cost of legal fees associated with the defence of the class action. Insurance coverage may also cover some or all of any monetary damages associated with any resolution of this matter,” said the statement.

“While the ultimate outcome of any Court process is difficult to ascertain, Organigram management does not anticipate that the class action (including the resolution thereof) will impact its business or operations in any material manner.”